Texas employees and their attorneys have found a way around the federal caps on damages in sexual-harassment cases.
Instead of going to federal court, plaintiffs sue in Texas state courts under the Texas Labor Code and add claims of negligent hiring, retention and supervision.
Particularly vulnerable are employers who have sexual-harassment policies, but whose supervisors ignore those policies.
Here’s why: The presence of a policy clearly sets out expectations of a harassment-free workplace. A jury may see ignoring those policies as negligence.
The cost to employers? Let’s just say the sky’s the limit, as the following case illustrates only too clearly.
Recent case: Cathie Williams had worked at the Waffle House Restaurant for only a week when a co-worker began making sexual comments to her. Williams told the store manager, who laughed but agreed to change her shift. Still, the harassment continued because the co-worker hung out at the restaurant at all hours.
Williams tried to call the Waffle House employee complaint hotline, but couldn’t get through.
She also wrote a letter of complaint, complained to three more managers and finally quit when no one investigated.
A jury found Waffle House guilty of negligent supervision and failure to follow its own sexual-harassment policy.
The jury awarded Williams $900,000, including $425,000 in punitive damages.
The Court of Appeals of Texas upheld the entire award on review. (Waffle House v. Williams, No. 2-05-373-CV, Court of Appeals of Texas, Forth Worth, 2007)
Final tip: Make sure everyone up and down the chain of command understands that your sexual-harassment policy is serious business. Ignoring it may lead to punitive damages, which most employment-practices liability insurance policies do not cover.