Texas Supreme Court Reverses Intentional Infliction Of Emotional Distress Claim

In August, the Texas Supreme Court reversed a nearly $10 million judgment, deciding that where the gravamen of a complaint is a statutory cause of action such as sexual harassment, it generally is impermissible to recover for the tort of intentional infliction of emotional distress. All eight justices of the court who decided the case agreed with the result, although there were two concurring opinions. This decision is a clear and significant victory for Texas employers.

Plaintiffs who bring statutory claims such as sexual harassment, discrimination, or retaliation frequently assert a tort claim for intentional infliction of emotional distress as well, seeking to avoid the monetary caps on compensatory and punitive damages for the statutory claims. Both Title VII of the Civil Rights Act and the Texas Commission on Human Rights Act (TCHRA) limit the amount of compensatory and punitive damages a plaintiff can recover. The amount of the cap varies depending on the size of the employer. In contrast, damages for intentional infliction of emotional distress are not subject to these limits. By recovering on the tort claim instead of the statutory claim, plaintiffs can circumvent the damage caps found in Title VII and the TCHRA.

That is precisely what the plaintiff in the case before the court tried to do. She pursued claims for both sexual harassment and intentional infliction of emotional distress, and the jury awarded her monetary damages on both claims. Because the harassment damages were subject to a monetary cap, after the verdict she essentially abandoned compensatory and punitive damages under the TCHRA and accepted the damages awarded under her tort claim, which totaled over $9 million.

On appeal the court found that a claim for intentional infliction of emotional distress should not be permitted “to thwart legislative limitations” on statutory claims. Therefore, “If the gravamen of a plaintiff’s complaint is the type of wrong that the statutory remedy was meant to cover, a plaintiff cannot maintain an intentional infliction claim regardless of whether he or she succeeds on, or even makes, a statutory claim.” The court did hold it was possible that a plaintiff could show facts independent of the statutory claim that would support an intentional infliction of emotional distress claim, but found that the plaintiff in this case did not meet that burden.

This case is significant for Texas employers because it erects a major roadblock for employees attempting to bring an uncapped claim of intentional infliction of emotional distress where a statutory cause of action may exist. The court in no way limited its holding to sexual harassment, and the underlying rationale should extend to any prohibited conduct under Title VII, the TCHRA, or other statutes. Hoffmann-La Roche Inc. v. Zeltwanger (2004).

Employer Notes: While the employer here dodged a major bullet, it still faces liability for sexual harassment and has, no doubt, spent substantial sums in attorneys’ fees. The best defense is a good offense – in this case, stopping harassment in its tracks.

Here are some suggestions:

• Adopt a written policy strongly disapproving of workplace harassment. State clearly that harassment based on all protected classes is prohibited, and will be grounds for discipline and even termination.
  
• Define harassment and provide examples of the type of conduct the policy prohibits. Try to use examples your employees will understand. Be sure to include examples that cover harassment based on race, religion, national origin and other protected classes besides sex. Sexual harassment is unlawful and harmful, but no more so than other types of harassment.
  
• Describe the complaint process. Where should employees go if they experience conduct that makes them uncomfortable? Be sure your complaint process allows employees the option of reporting to more than one person. Requiring employees to first report harassment complaints to their immediate supervisor will not be effective if the supervisor is the person engaged in the offensive behavior.
  
• Explain that the company will investigate all harassment complaints before taking action, and that if the harassment policy has been violated, the company will take action to fix the problem and prevent it from happening again.
  
• Do not promise total confidentiality. It is impossible to investigate a harassment complaint if you promise the employee that the complaint will be strictly confidential. Instead, assure employees that complaints will be handled as confidentially as possible and that you will take steps to protect the complainant from retaliation.
  
• Regularly communicate the harassment policy and complaint process to all employees. Include it in the employee handbook, conduct regular training sessions, post reminders on employee bulletin boards. You have to prove that your employees have been made aware of the policy.
  
• Train all supervisors and managers about the policy and how they are expected to react if an employee brings a harassment complaint to them. They should also be told to immediately report any known, observed or rumored harassment to Human Resources or other designated management. Remember, once your supervisors know what’s happening, the employer is automatically deemed to know.

Submitted by J. Alfred Southerland, Shareholder, Ogletree Deakins. You can contact Mr. Southerland at alf.southerland@odnss.com.

Reprinted from Council’s Preventing Employment Law Problems in the Texas Workplace newsletter. Click here for a free trial or to subscribe.

The surest way to avoid liability for harassment is to have an antiharassment policy in place and to conduct a thorough investigation whenever a complaint is made. How to Conduct an Internal Investigation and Council’s Internal Investigations Certificate Program can provide you with everything you need to know about conducting workplace investigations. For HR professionals with experience in conducting internal investigations, Council now offers an Advanced Certificate in Conducting Workplace Investigations program, which will prepare you with critical strategies to address the most complicated issues you confront in your workplace investigations. Click on the links above for more information, including detailed agendas, dates, and locations.