Several changes to the Texas labor codes have affected sexual harassment claims. On a recent State Bar of Texas Podcast episode, I talk with host Rocky Dhir about how these changes make it easier for people to pursue a claim and how the definition of an employer has changed. I offer insights on how victims of sexual harassment in the workplace can file a claim. Listen to the podcast below.
Gender discrimination in the workplace is not an uncommon situation. I share my expertise on the subject with Holly Caplan on her podcast, Talking Confidence with Holly Caplan.
Listen as I answer some common questions such as “how does someone know when it’s time to contact a lawyer” or “are there time limits if I want to take action.” I also give tips on what you need to know and do in gender discrimination situations. Listen to the podcast below.
Many employers include a “non-solicitation” clause in agreements that they require employees to sign. These non-solicitation clauses usually prohibit an employee from, directly or indirectly, soliciting the business of the company’s customers to soliciting employees to leave the company.
That seems straightforward, but it rarely is. What happens when an employee leaves a company, and a customer tracks the employee down and wants to do business? Is that o.k.? Is that a solicitation by the employee?
What kind of contact can a departing employee have with a former customer?
The simple answer: it depends. The exact language used in the non-solicitation agreement will be critical here. Sometimes, a non-solicitation is very clear that a former employee cannot solicit or do business with a customer that the employee worked with.
Other times, the non-solicitation clause does not address it. When the language is not clear, a Dallas federal judge recently helped define the parameters of what it means to “solicit.” The case is Sunbelt Rentals, Inc. v. Holley, 2022 WL 049468 (N.D. Tex. April 7, 2022).
This clause said that the employee would not “solicit the provision of products or services similar to those provided by the Corporation to any person or entity who purchased or leased products or services from the Corporation at any time during the 12 calendar months” before the employee’s last day.
So, would this clause prohibit an employee from doing business with a former customer if the former customer reached out to the employee?
As the judge said, a full spectrum of acts needs to be reviewed in the context of a non-solicit clause. The judge describes this as “falling on a spectrum from active communication directed by the employee and designed to culminate in new business, at the one end, to requests instigated entirely at the will of the former client at the other end. In between lie various factual scenarios involving indirect solicitation or some act undertaken in the hopes of inducing a former client to “initiate contact.”
The court recognized that reasonably constructing a non-solicitation clause must include more conduct than simply falling at the most reasonable end of the spectrum.
In this particular case, the former employee testified he did contact his former customers after he resigned from his job and accepted a job with a competitor. He used his personal cellphone to contact the former customers. However, he testified that he told the customer the contact information for the person at his former employer who would be handling the account. He specifically denied telling the customers his new employer’s name or explaining what he would be doing.
Under these facts, while it was a close call, the court refused to consider a “solicitation” violation of the non-solicitation clause. It denied the former employer’s request for an injunction.
So, it seems that to violate the non-solicit, an employee will need to do something more than have contact with the former customer—particularly if that contact is limited to telling the customer who will be handling its account. Had this employee gone further and told the former customer where he now worked or taken any concrete steps to ask for the business, the court may have found a solicitation.
Any contact with former customers can be tricky. If you have a non-solicitation clause and leave one job to work for a competitor, get some guidance about staying on the right side of the line.
With broad bipartisan support, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. President Biden is expected to sign this bill soon.
The changes this law makes are significant. Under this law, an employer can no longer force an employee to arbitration a claim that involves sexual harassment or sexual assault allegations. Instead, the employee may pursue those claims in state, federal, or tribal court.
The Act also prohibits the waiver of a right to pursue sexual harassment or sexual assault claims as part of a joint action, collective action, or class action.
Under the Act, a “sexual harassment dispute” is a dispute related to conduct alleged to constitute sexual harassment under Federal, Tribal, or State law. “Sexual assault dispute” is a dispute involving a nonconsensual sexual act or sexual contact, as those terms are defined in other statutes.
The most significant part of this statute is that its application is retroactive. So, for employees who have already signed an arbitration agreement, if the employee has a sexual harassment or sexual assault dispute, that old arbitration agreement will not apply. The employee is free to sue in state or federal court.
However, it is not retroactive for cases already litigated through arbitration. Those cannot be reopened and relitigated.
The importance of this Act to individuals who suffer sexual harassment and sexual assault cannot be overstated. This law is a game-changer.
With this Act, employers must give serious thought as to how to handle sexual harassment and sexual assault claims. One reason that employers have preferred to arbitrate such claims is that arbitration proceedings are generally confidential. The public rarely learns of the allegations made in a confidential arbitration proceeding.
Another reason employers prefer arbitration is that they need not fear a “runaway jury” award. That protection is now gone.
It will be very interesting to see how employers respond to this new law once President Biden signs it.
Now that employers cannot rely on the confidentiality of arbitration to protect from bad publicity arising from a sexual harassment or sexual assault claim, they will need to be more proactive in protecting employees.
Employers can no longer ignore red flags or conduct biased investigations.
Far too often, when an employee complains about sexual harassment, the investigation conducted (if any) is half-hearted at best. Far too often, investigators ignore red flags, do not seek additional evidence, and do not interview witnesses who may have information.
Now that employers cannot rely on arbitration to protect from large jury verdicts in sexual harassment or sexual assault claims let’s hope that employers take proactive steps to improve the protection of employees.
One question we face a lot in litigating retaliation claims is whether an employee has suffered “an adverse employment action.” While deciding what kinds of things can be adverse employment actions seems like it should be easy, courts still struggle with it.
In a recent Eleventh Circuit case, Smith v. City of Pelham, the Eleventh Circuit explained how a supervisor’s action could be retaliatory—even when the employee did not initially know about it.
Here, Jennifer Smith filed a sex discrimination complaint against her supervisor. The City told the supervisor of the sex discrimination complaint and reminded him that the supervisor was not to retaliate against Smith.
Alas, that warning fell on deaf ears. Within a week, the supervisor tasked another employee with conducting a forensic search of Smith’s computer. The search turned up an iPhone backup on her work computer. In the photos in this backup, there were nude photographs. The investigation also showed that Smith had used her work computer during working hours for things related to a second job.
The City fired Smith because the nude photos in the iPhone backup on her work computer were considered “conduct unbecoming.”
Although Smith had no idea that the supervisor ordered this forensic search of her computer after filing her complaint, Smith knew that she had been fired within a month of filing her sex discrimination complaint. She sued for retaliation.
The Supreme Court tells us that retaliation exists when an employee suffers a materially adverse employment action. Retaliation is material if it might have dissuaded a reasonable worker from making or supporting a charge of discrimination.
The district court dismissed Smith’s retaliation claim. It reasoned that the forensic search could not be a materially adverse action because Smith did not know the supervisor had someone conduct the forensic investigation. The district court noted, “a reasonable worker could not be dissuaded from making a charge of discrimination due to an investigation of which she had no knowledge.”
Fortunately, the Eleventh Circuit recognized this for the illogical nonsense it is. It pointed out that to hold that an action cannot be adverse if the employee is unaware of that action is without legal support.
Smith was fired because of that forensic investigation—instigated by her supervisor immediately following her sex discrimination complaint. That search then caused her to be fired—and no one could dispute that the termination is an adverse employment action.
This outcome should have been common sense. Sadly, it was not. However, the Eleventh Circuit set the record straight here. It found that even though the search might have resulted in the discovery of some employee misconduct, that did not excuse that the investigation was itself retaliatory.
Retaliation continues to occur in all forms, shapes, and flavors. Most courts recognize it when they see it. Here, the Court of Appeals had to catch the district court’s error and set the record straight.