Seyfarth Synopsis: In a decision that is sure to increase the costs and complexity of litigation, the Texas Supreme Court recently held that a former employee’s common law assault claim was not preempted by the state’s anti-discrimination statute. The Court reasoned that if the gravamen of an employee’s claim is that the employer committed assault through a “vice principal”–as opposed to sexual harassment–the employee may pursue the common law claim directly and would not be preempted.

Recently, in B.C. v. Steak N Shake Operations, Inc., the Texas Supreme Court held that an employee could sue her employer for assault where the gravamen of the claim was sexual assault by the employer’s “vice principal”, and not sexual harassment. In doing so, the Court narrowed its previous holding in Waffle House, Inc. v. Williams, 313 S.W.3d 796 (Tex. 2010) that common law torts predicated on the same or similar facts as a sexual harassment claim are preempted by the Texas Commission on Human Rights Act (“TCHRA”).

In a somewhat bizarre twist of logic, the decision suggests that employees subject to a single, severe instance sexual assault by a “vice principal” may bring a common law claim against the employer; but employees subject to a pattern sexual harassment involving sexually suggestive comments and conduct (including less violent or offensive touching constituting assault) may only bring a claim under the TCHRA (subject to administrative exhaustion requirements and damages caps). Until the courts resolve this open question, employers will likely be forced to defend both types of claims at the same time, while also having to litigate factually-intensive questions regarding who qualifies as a “vice principal” under Texas law.

Plaintiff B.C. worked as a server in the Steak N Shake restaurant in Frisco, Texas. During a shift in October 2010, she claimed that her supervisor assaulted her in the bathroom, pushing her against the wall and sink, groping her, and exposing his genitals. She was able to escape the attack only after the supervisor lost his balance and fell to the ground. Steak N Shake conducted an internal investigation after B.C. reported the incident, but was unable to confirm B.C.’s story. Steak N Shake extended an unqualified offer to B.C. to return to work at any Steak N Shake location of her choosing. B.C. declined the offer and instead resigned. She later sued Steak N Shake for a variety of common law claims, including assault, on the basis that her supervisor was a “vice principal” and therefore Steak N Shake was directly liable for his tortious actions. Steak N Shake moved for summary judgment arguing, in part, that the TCHRA preempted B.C.’s common law claims. The trial court granted summary judgment without explanation and B.C. appealed. The Dallas Court of Appeals, relying on Waffle House decision, affirmed the trial court’s ruling on the grounds that the TCHRA preempted B.C.’s assault claim.

In reversing, the Texas Supreme Court distinguished the facts in Waffle House, noting that the plaintiff in that case (Williams) had asserted a common-law negligent retention and supervision claim based on the employer’s alleged failure to prevent a pattern of sexual harassment by co-workers over six months that included inappropriate comments, suggestive winks, and arguably sexual assault (the employee allegedly held the plaintiff’s arms with his body pressed against hers and rubbed against the plaintiff’s breasts with his arms). Because sexual harassment under the TCHRA based on co-workers harassment is predicated on the employer’s alleged negligence and because it was the employer’s continued negligent supervisor and retention of the harasser that constituted the factual basis of Williams’ claims, the Texas Supreme Court held in Waffle House that the gravamen of the Williams’ complaint was a TCHRA-covered claim and not the negligence claims.

The Court then distinguished its holding in Waffle House from the claim raised by B.C. First, the factual basis for Williams’ common law claim in Waffle House was Waffle House’s continued supervision and retention of the harasser. B.C., on the other hand, only alleged a single instance of violent assault. Second, the Court reasoned that Williams improperly repackaged the assault portions of her sexual harassment claim in terms of negligence. Yet the gravamen of her complaint was sexual harassment by co-workers. Conversely, unlike Williams, B.C. did not allege a pattern or practice of sexual harassment by co-workers. Instead, she alleged that on a single occasion, Steak N Shake, acting through her supervisor, sexually assaulted her. Third, Williams alleged that a co-worker physically harassed her, whereas B.C. alleged that her employer was directly responsible for the alleged assault of a “vice principal” (i.e., her supervisor). Therefore, the Court reasoned, the gravamen of B.C.’s complaint was assault, not sexual harassment under the TCHRA. The Court also noted that there is no indication that the Texas legislature intended for the TCHRA to preempt assault claims against individual assailants (whether a corporate entity or an individual).

The Court’s holding here is likely to cause confusion and lead to strange outcomes. With little guidance, courts will be forced to decide whether the gravamen of a complaint is assault or sexual harassment. Because the Court did not draw a bright line, employees subject to a pattern of non-physical harassment and only one incident of assault may be limited by the TCHRA, whereas employees subject only to sexual assault (but no ongoing harassment) may be free to assert common law claims. Regardless of the final outcome, in the short term employers will likely be forced to defend both claims at the same time, particularly in cases involving sexual harassment by supervisors, managers, or executives. Litigating assault claims and questions about who qualifies as a “vice principal” will also likely increase the costs of litigation in this context.