By: Hughes S.B. No. 2118
A BILL TO BE ENTITLED
AN ACT
relating to ensuring compliance with federal civil-rights laws by
corporations doing business in Texas, and prohibiting
discrimination in the selection of a corporation's board members.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 21, Business Organizations Code, is
amended by adding Subchapter U to read as follows:
SUBCHAPTER U. PROHIBITED DISCRIMINATORY PRACTICES
Sec. 21.981. APPLICABILITY. This subchapter applies to:
(1) a corporation that:
(A) formed under the laws of this state; or
(B) conducts business in this state; and
Sec. 27.982. COMPLIANCE WITH FEDERAL CIVIL-RIGHTS
STATUTES. (a) No corporation described by Section 21.981, and no
director, officer, shareholder, employee, or agent of that
corporation, may ask, encourage, or induce any of that
corporation's suppliers, vendors, contractors, or firms that
provide goods or services to that corporation to violate any
federal civil-rights statute, including the Civil Rights Act of
1866, as amended and codified at 42 U.S.C. § 1981, and Title VII of
the Civil Rights Act of 1964, as amended and codified at 42 U.S.C. §
2000e et seq.
Sec. 27.983. DISCRIMINATION IN THE SELECTION OF A
CORPORATION'S BOARD MEMBERS. (a) No corporation described by
Section 21.981, and no director, officer, shareholder, employee, or
agent of that corporation, may establish or enforce any quota or
set-aside in the selection of board members that depends in any way
upon an individual's race, sex, religion, sexual orientation or
sexual practices, or gender identity or gender-nonconforming
behavior.
(b) No corporation described by Section 21.981, and no
director, officer, shareholder, employee, or agent of that
corporation, may discriminate against or give preferential
treatment to any individual on account of race or sex when selecting
the board members of that corporation.
Sec. 27.984. PUBLIC ENFORCEMENT PROHIBITED. (a) An
executive officer, administrative officer, or public employee of a
state or local governmental entity in this state may not enforce
this subchapter in the capacity of a public officer or employee
through any means of public enforcement.
(b) This section does not limit or affect the availability
of a private enforcement action under Section 21.985.
Sec. 21.985. PRIVATE ENFORCEMENT. (a) Any person, other
than an officer or employee of a state or local governmental entity
in this state, may bring a civil action against a corporation or
individual that violates Sections 21.982 or 21.983.
(b) On finding that a defendant has violated Section 21.982,
the court shall award:
(1) declaratory relief;
(2) injunctive relief;
(3) statutory damages in an amount not less than 25
percent of the total amount paid by the corporation to the supplier,
vendor, contractor, or firm that was asked, encouraged, or induced
to violate the federal civil-rights statutes;
(4) punitive damages of not less than one million
dollars ($1,000,000.00);
(5) costs and attorneys' fees.
(c) On finding that a defendant has violated Section 21.983,
the court shall award:
(1) injunctive relief;
(2) statutory damages of not less than one million
dollars ($1,000,000.00); and
(3) Costs and attorneys' fees.
(d) Notwithstanding Subsections (b) and (c), a court may not
award relief under this section in response to a violation of
Section 21.982 or Section 21.983 if the defendant demonstrates that
the defendant previously paid statutory damages in a previous
action for that particular violation.
(e) Notwithstanding Chapter 16, Civil Practice and Remedies
Code, a person may bring an action under this section not later than
the sixth anniversary of the date the cause of action accrues.
(f) The following are not defenses to liability in an action
brought under this section:
(1) ignorance or mistake of law;
(2) the business judgment rule;
(3) a defendant's belief that the requirements of this
chapter are unconstitutional or were unconstitutional;
(4) a defendant's reliance on any court decision that
has been overruled on appeal or by a subsequent court, even if that
court decision had not been overruled when the defendant engaged in
conduct that violates this chapter;
(5) a defendant's reliance on any state or federal
court decision that is not binding on the court in which the action
has been brought;
(6) nonmutual issue preclusion or nonmutual claim
preclusion;
(7) the need to comply with another state's law; or
(8) the need to comply with the requirements of being
listed on a stock exchange.
(g) Notwithstanding any other provision of law, no court may
award costs or attorney's fees under Rule 91a of the Texas Rules of
Civil Procedure, or under any other rule adopted by the supreme
court under Section 22.004(g), Government Code, to any defendant
sued under this section.
Sec. 21.986. SOVEREIGN AND OFFICIAL IMMUNITY PRESERVED.
This subchapter does not waive:
(1) the state's sovereign immunity from liability; or
(2) an officer or employee of this state's official
immunity from liability.
Sec. 21.987. SEVERABILITY. (a) Mindful of Leavitt v. Jane
L., 518 U.S. 137 (1996), in which in the context of determining the
severability of a state statute the United States Supreme Court
held that an explicit statement of legislative intent is
controlling, it is the intent of the Legislature that every
provision, section, subsection, sentence, clause, phrase, or word
in this subchapter, and every application of the provisions in this
subchapter, are severable from each other. If any application of
any provision in this subchapter to any person, group of persons, or
circumstances is found by a court to be invalid or
unconstitutional, then the remaining applications of that
provision to all other persons and circumstances shall be severed
and may not be affected. All constitutionally valid applications
of this subchapter shall be severed from any applications that a
court finds to be invalid, leaving the valid applications in force,
because it is the Legislature's intent and priority that the valid
applications be allowed to stand alone. Even if a reviewing court
finds a provision of this subchapter to violate the Constitution in
a large or substantial fraction of relevant cases, the applications
that do not present an undue burden shall be severed from the
remaining provisions and shall remain in force, and shall be
treated as if the Legislature had enacted a provision limited to the
persons, group of persons, or circumstances for which the
provision's application does not violate the Constitution. The
Legislature further declares that it would have passed this
subchapter, and each provision, section, subsection, sentence,
clause, phrase, or word, and all constitutional applications of
this subchapter, irrespective of the fact that any provision,
section, subsection, sentence, clause, phrase, or word, or
applications of this subchapter, were to be declared
unconstitutional or invalid.
(b) If any provision of this subchapter is found by any
court to be unconstitutionally vague, then the applications of that
provision that do not present constitutional vagueness problems
shall be severed and remain in force, consistent with the
declarations of the Legislatures intent in Subsection (a).
(c) No court may decline to enforce the severability
requirements in Subsections (a) or (b) on the ground that severance
would rewrite the statute or involve the court in legislative or
lawmaking activity. A court that declines to enforce or enjoins a
state official from enforcing a subset of a statute's applications
is never rewriting a statute, as the statute continues to say
exactly what it said before. A judicial injunction or declaration
of unconstitutionality is nothing more than a non-enforcement edict
that can always be vacated by later courts if they have a different
understanding of what the state or federal Constitution requires;
it is not a formal amendment of the language in a statute. A
judicial injunction or declaration of unconstitutionality no more
rewrites a statute than a decision by the executive not to enforce a
duly enacted statute in a limited and defined set of circumstances.
(d) The legislature intends that the provisions of this
subchapter apply to the maximum extent permitted by law.
SECTION 2. This Act takes effect September 1, 2021.