New York's Highest Court Limits Ability of Non-Residents to Sue Under New York State and New York City Human Rights Laws

Posted on July 14, 2010 by Colin Leonard

In a 4-3 decision, the New York Court of Appeals ruled on July 1, 2010, that a non-resident cannot sue his employer under the New York State  and City Human Rights Laws, unless he can demonstrate that the alleged discriminatory conduct had an impact within the State or City of New York. The case, Hoffman v. Parade Publications, Inc. resolves a split of authority over the applicability of the State and City Human Rights Laws to non-residents. Prior to Hoffman, some courts had ruled that a non-resident plaintiff could assert a Human Rights Law claim when the termination decision was made in New York, even if the plaintiff otherwise had no connection to New York. The Hoffman case has been closely watched by New York employers who have employees working in other parts of the country. Plaintiffs’ attorneys often seek to take advantage of the State or City Human Rights Laws where possible, because those laws are often broader and more protective of employees than are federal law and the laws of many other states.

The case was brought by Howard Hoffman, a former employee of Parade Publications, the publisher of a nationally syndicated Sunday newspaper insert, with headquarters in New York City. Hoffman, however, worked in the company’s Atlanta, Georgia office and resided in that state. He attended quarterly meetings at the company’s New York City headquarters, but otherwise had no contact with New York and did not service any accounts in New York.

In October 2007, the company’s president contacted Hoffman by phone from New York City and told him the Atlanta office was being closed and that he was being terminated. Hoffman subsequently sued Parade Publications alleging age discrimination in violation of the New York State and New York City Human Rights Laws.

The trial court dismissed the complaint, holding that neither the State nor City Human Rights Laws applied to Hoffman, because the impact of the termination decision was not felt within the City or State of New York. The Appellate Division reversed and concluded that a non-resident plaintiff need only establish that the discriminatory decision was made in New York. The Court of Appeals then reversed the Appellate Division.

The Court of Appeals reviewed the City and State Human Rights Laws and noted that the statutory language expressed an intent to protect “inhabitants” of the City, “the people” of the State and those “individual[s] within” the State. According to the Court, it would be inconsistent with the statutory intent to extend the protection of those laws to non-residents who have at most “tangential contacts” with the City or the State. By focusing on whether the impact of the decision is felt within the State or the City, the Human Rights Laws will provide protection to non-residents who work in New York. At the same time, the impact analysis excludes non-residents from “forum shopping” their claims to take advantage of New York’s and New York City’s broader Human Rights Laws. Had Hoffman sued Parade for age discrimination under Georgia state law, his maximum recovery would have been a fine of $250.

After Hoffman, it is clear that the mere fact a termination decision was made in New York will be insufficient, standing alone, to assert a cause of action under the State or City Human Rights Laws with regard to a non-resident employee who does not work in New York and/or New York City. What remains unclear is how courts will assess the “impact” requirement going forward. In many ways Hoffman was an easy case because Hoffman clearly did not work in New York. But other situations may prove more difficult, such as the employee who reports to multiple offices, including one in New York. Or an employee who travels frequently on business within New York, but is otherwise based at a location outside of the State.

 
Tags: , ,

New York City Employers Are Strictly Liable for Harassment or Discrimination by Supervisors

Posted on June 8, 2010 by Mark N. Reinharz

A recent decision by the New York Court of Appeals will significantly impact New York City employers. On May 6, 2010, New York’s highest court held that employers covered by the New York City Human Rights Law ("NYCHRL") can be held strictly liable for discriminatory acts or harassment by an employee who “exercised managerial or supervisory responsibility.”

In Zakrzewska v. The New School, the Plaintiff alleged that her “immediate supervisor” subjected her to sexually harassing e-mails and conduct for over a year. She sued her employer in United States District Court, alleging violations of the NYCHRL. The New School moved for summary judgment arguing that it could not be held liable for the supervisor's actions because it had a strict policy against sexual harassment and the Plaintiff waited more than one year to come forward before making her complaint. The District Court held that the claim would indeed by barred under the affirmative defenses articulated in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, applicable to federal law Title VII claims, if those affirmative defenses applied under the NYCHRL.  In those cases the United States Supreme Court held that an employer is not liable under Title VII for sexual harassment committed by a supervisory employee if it proves that: (1) no tangible employment action was taken as part of the alleged harassment; (2) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior; and (3) the employee unreasonably failed to take advantage of preventive or corrective opportunities provided by the employer.

The District Court also concluded, however, that the language of the NYCHRL suggested that these affirmative defenses were not available for NYCHRL claims and so denied the New School’s motion for summary judgment.  The case was then certified for appeal to the United States Court of Appeals for the Second Circuit, which in turn certified the question of whether the defenses were available to the New York Court of Appeals.
 

The New York Court of Appeals unanimously concluded that the affirmative defenses were not available under the City Law. It noted that the statute provides that: "[a]n employer shall be liable for an unlawful discriminatory practice based upon the conduct of an employee or agent which is in violation of subdivision one or two of this section only where: (1) the employee or agent exercised managerial or supervisory responsibility. ..."  Based on this language, the Court held that “the plain language of the NYCHRL precludes the Faragher-Ellerth defense.” In other words, any discriminatory act by an employee or agent who exercised managerial or supervisory responsibility will result in employer liability.

In reaching its decision, the Court also reviewed more broadly the language of the NYCHRL and found that its “legislative scheme simply does not match up with the Faragher-Ellerth defense.” The Court noted that the statute not only states that there is employer liability for acts of individuals exercising their supervisory responsibility, it also provides that an employer's anti-discrimination policies and procedures may be considered only “in mitigation of the amount of civil penalties or punitive damages” recoverable in a civil action (see NYC Admin Code § 8-107 [e]). The Court also reviewed the legislative history of the statute and concluded that it was the intent of the City Council for employers to be held strictly liable for acts of discrimination by supervisors.

Strict liability for employers is arguably poor public policy because it creates the wrong incentive for employees and is unfair to employers who take their legal responsibilities seriously. For employees, it creates a disincentive to report harassment which can then unnecessarily increase damages and delay the employer’s ability to comply with its non-discrimination obligations. Further, employers who are unaware of such conduct, but have provided training and strictly enforced their non-discrimination policies, will still be liable for random and unauthorized acts committed by someone who “exercised managerial or supervisory responsibility.” The Court recognized these concerns but ultimately concluded that such policy judgments were properly made by the legislature, in this case the City Council.

The decision will surely lead to more, and lengthier, litigation. Cases that could have been dismissed at the summary judgment stage on a motion will now proceed to trial and in some cases, employers may now have summary judgment granted against them based on conduct of even low level supervisors. In addition, employers who have operations both within and outside of New York City will be subject to two different standards of liability in harassment cases.
 
Tags: , ,

New York State and City Human Rights Laws Can Protect Non-Resident Employees

Posted on April 26, 2010 by Michael Collins

Another federal court has recently decided that the New York State Human Rights Law (“NYSHRL”) and New York City Human Rights Law (“NYCHRL”) can protect employees who do not live or work in New York. In Rohn Padmore, Inc. v. LC Play Inc., the plaintiff, Ron Padmore, alleged discriminatory discharge based on sexual orientation. During the initial month of his employment, Padmore worked at defendant’s offices in New York City. Thereafter, he worked mainly from his home in Los Angeles, but returned to the employer’s New York City offices on three occasions. His employment was terminated by an e-mail generated from the employer’s New York City offices, which contained apparent evidence that the termination was based on sexual orientation.

The employer sought summary judgment dismissing the complaint on the ground, among others, that as a non-resident of New York, the protections of the NYSHRL and NYCHRL did not apply to Padmore. After a thorough review of the conflicting decisions that had previously considered the issue, the Court sided with the courts which have held that the two laws apply when a discriminatory act is committed in New York, even if the impact of the act is felt outside of New York. Because the employer’s offices were in New York City, the allegedly discriminatory termination decision was made in New York City and the e-mail evidencing discriminatory animus was sent from New York City, the Court found Padmore was protected by both the state and city laws.

The Padmore court’s interpretation of the geographic reach of the NYSHRL and NYCHRL is becoming the majority view, and is the view of New York’s Appellate Division, First Department. If Padmore is followed by other courts, potential plaintiffs across the country, even those who never set foot in New York, may be able to avail themselves of the generous protections of the NYSHRL and NYCHRL, so long as an arguably discriminatory decision was made in New York.
 

Tags: , ,