Monday, March 18, 2024

Challenge to race-based corporate fellowship program fails for lack of standing

Another potentially impactful lawsuit doomed over the lack of standing. If an organization brings a lawsuit to challenge what it believes is an unlawful policy, it must show it has standing to sue. The organization will say it has standing because its members have an interest in the case, but there are strict rules for that process. In this case, a conservative organization that claims Pfizer's fellowship program has racially-discriminatory cannot proceed with the case because we don't know who the aggrieved members are.

The case is Do No Harm v. Pfizer, Inc., issued on March 6. Pfizer, the pharmaceutical company, has a fellowship program that seeks to advance students and "early career colleagues of Black/American, Latino/Hispanic and Native American descent." The organization claims this program discriminates against white and Asian candidates. But the case does not get off the ground because the organization cannot prove standing. It fails to identify any of its injured members by name. 

Organizations can assert organizational standing to sue as the representative of its members. But at least one member of that organization must have standing to sue in their own right, i.e., that they suffered an actual injury and the lawsuit can redress that injury. In Summers v. Earth Island Institute, 555 U.S. 488 (2009), the Supreme Court has said that, in associational standing cases, the organization must identify members who suffered harm from the challenged policy. 

But the Supreme Court has not exactly stated that the organization must identify these members by name. The Second Circuit (Jacobs, Wesley and Robinson) has to therefore decide if you have to name names. The Court of Appeals determines that you do have to identify the aggrieved members, reasoning that such a requirement aligns with Summers. Under this interpretation, naming the members proves the case is not a hypothetical exercise; we want lawsuits to have real parties with real disputes. The First Circuit has already ruled as such, in a decision written by retired Supreme Court Justice David Souter, making the Second Circuit the second circuit to rule this way.

Friday, March 15, 2024

New York Court of Appeals expands the scope of the City and State antidiscrimination laws

The New York Court of Appeals has issued a definitive ruling on the scope of the New York State and City Human Rights Laws. Answering a certified question from the Second Circuit, the State Court of Appeals holds that a New York City-based company may be held liable under the remedial City and State Human Rights Laws if it denies an out-of-state job applicant a position for discriminatory reasons.

The case is Syeed v. Bloomberg, L.P., issued on March 14. Plaintiff worked in defendant's Washington, D.C. bureau and applied to work for its bureau in New York City. Bloomberg instead hired a less-qualified male applicant. She sued Bloomberg under the State and City laws, but the case was dismissed because she was not a New York resident when defendant denied her the promotions. A prior New York Court of Appeals ruling, Hoffman v. Parade Publications, 15 N.Y.3d 285 (2010), held that the City law only applies when the discriminatory personnel decision "impacts" New York City. The trial court in this case relied on Hoffman in dismissing Syeed's case. As the Court of Appeals in Syeed summarizes the Hoffman holding:

"the impact requirement does not exclude all nonresidents from [the] protection" of the Human Rights Laws. Instead, the impact test "expands" the protections of the Human Rights Laws "to nonresidents who work in the" state or city and to those who "state a claim that the alleged discriminatory conduct had any impact in either of those locations." Hoffman therefore sets forth two ways in which a nonresident may satisfy the impact requirement: (1) working in New York or (2) establishing that the challenged conduct had some impact on the plaintiff within the respective New York geographic boundaries.

How do we apply Hoffman in Syeed's case, where she claims she was denied promotions for New York City-based jobs, but she was not living in New York City when the promotion denials took place? The Second Circuit was presented with this issue in Syeed's case because her case is pending in Southern District of New York, and she appealed to the Second Circuit. The Circuit, in turn, forwarded this issue to the New York Court of Appeals, a common practice when the Circuit has an open issue of state law and wants the State Court of Appeals to issue a definitive ruling on the issue.

The State Court of Appeals unanimously holds that the City and State Human Rights Laws govern Sayeed's case. 

a nonresident who has been discriminatorily denied a job in New York City or State loses the chance to work, and perhaps live, within those geographic areas. The prospective employee personally feels the impact of a discriminatory refusal to promote or hire in New York City or State, because that is where the person wished to work (and perhaps relocate) and where they were denied the chance to do so. When applying the required liberal construction of "inhabitants" and "individual within this state" (Executive Law § 290 [3]; Administrative Code § 8-101), a prospective inhabitant or employee, who was denied a job opportunity because of discriminatory conduct, fits comfortably within the Human Rights Laws' protection.

Policy reasons also support this holding. The State and City have robust antidiscrimination laws. 

the Human Rights Laws contemplate that discrimination harms the state and city as governmental institutions, in addition to the targeted individual. The state and the city are deprived of economic and civic contributions from individuals discriminatorily denied the opportunity to work in New York, along with the more diverse workforces and communities that the individuals would advance. Our resolution of the certified question has the beneficial effect of protecting New York institutions and the general welfare of the state and city—as the legislature and city council intended.

The case now returns to the Second Circuit, which will apply the State Court of Appeals' holding. Since this holding favors plaintiff, I assume this case will be revived and proceed to discovery in the Southern District of New York

Thursday, March 14, 2024

There's a new SLAPP law in town

New York has long had a law on the books that makes it illegal to sue someone over their public advocacy. These were called anti-SLAPP suits. SLAPP stands for Strategic Lawsuits Against Public Participation. But the old anti-SLAPP law only applied in the context of advocacy for public permits, usually  land-use disputes. But the SLAPP law changed a few years ago to prohibits retaliatory lawsuits involving other forms of public advocacy. The case law is still developing in this area.

The case is Whittaker v. Markle, issued by Ulster County Supreme Court on March 13. Christopher Watkins and I represent defendant Donnie Markle, a private businessman who testified before the County Legislature that an employee at the Ulster County Resource Recovery Agency (which runs the landfill and takes on other recycling duties), Willie Whittaker, was hoarding the compost that members of the community are able to purchase on their own. Following Markle's testimony, Willie's brother, Charles, who serves as the Director of Operations at OCRRA, sued Markle for negligent infliction of emotional distress, claiming that Markle had lied about the compost and caused Whittaker to suffer emotional distress because County policymakers began to more carefully scrutinize his job performance. (Markle has a separate federal lawsuit against UCRAA under the First Amendment, because the agency barred him from the facility following his public testimony).

Justice Graff finds that Whittaker's lawsuit against Markle is a SLAPP suit because Markle testified about  a matter of public importance in telling the County Legislature about the misuse of public resources. State law prohibits retaliatory lawsuits like this if the lawsuit lacks a substantial basis. This means that a legitimate lawsuit against the public speaker is not a SLAPP suit. Whittaker's lawsuit for negligent infliction of emotional stress lacks a substantial basis, Justice Graff holds, because Markle did not breach any duty toward Charles 9he testified about Willie, not Charles), and Markle's testimony did not unreasonably endanger Charles' physical safety. Without any real basis to sue Markle, Whittaker's lawsuit is a SLAPP suit under New York. That entitles Markle to damages and attorneys' fees, to be determined later.

A unique procedural issue arises in this case. When Markle filed his motion to dismiss the case under the anti-SLAPP law, rather than defend this lawsuit, Whittaker withdrew the lawsuit entirely. Does that make the SLAPP issue go away? In the First and Second Departments, discontinuing the lawsuit prior to filing the Answer does not moot a motion to dismiss. In the Fourth Department, discontinuance does moot the motion to dismiss if the case is discontinued prior to filing the Answer.

Tuesday, March 12, 2024

Employee speech exposing intoxication at the sewage treatment plant is not protected under the First Amendment

The plaintiff alleged he was fired in retaliation for speaking out under the First Amendment. But there are strict requirements in order to prevail on such a claim, and the Court of Appeals finds that plaintiff cannot meet those requirements. The case is dismissed.

 The case is Reynolds v. City of New York, a summary order issued on March 11. Plaintiff was a sewage treatment worker for the Department of Environmental Protection. In 2020, he told management that coworkers were drinking alcohol and were intoxicated on the job, "thereby impeding their ability to adequately perform their job, which is an essential function to maintain public health." Following this speech, plaintiff suffered a series of retaliatory acts, including a transfer to the day shift after working nights for 17 years, which cost him money in overtime hours. Plaintiff was also assaulted on the job in retaliation for his speech and had false accusations lodged against him.

It may look like plaintiff has a case, but he does not, the Court of Appeals (Newman, Lee and Nathan) says, because plaintiff did not speak on a matter of public concern, a necessary requirement for maintaining a First Amendment retaliation claim. Public concern speech has a particular definition, and the Supreme Court once said that something that might be reported in the newspaper could be a matter of public concern. Municipal corruption, public safety, and across-the-board discrimination are matters of public concern, for example. 

While "Reynolds’s primary argument is that reports about misconduct at the DEP must necessarily be connected to the 'health and safety of the public via the she[e]r nature of the work at the [DEP], namely ensuring clean drinking water for the public,” the Court holds that he must do more than allege that the "sheer nature" of this kind of work was connected to the public's safety and was therefore a matter of public concern. The authority for this proposition is Shara v. Maine-Endwell Cent. Sch. Dist., 46 F.4th 77, 81 (2d Cir. 2022), which held that although a school bus driver’s complaints about bus-inspection reporting implicated the safety of bus-riding children, it was not a matter of  public concern because “he never alleged . . . that the School District’s preferred reporting policy resulted in unsafe conditions or that his proposal of daily reporting would have improved safety.”

Plaintiff loses because he does not allege in his complaint that the employee misconduct contributed to unsafe drinking water or that it impacted public health and safety. "While we agree that intoxicated employees at a sewage treatment facility certainly could take actions to harm the public’s safety, the sparse allegations in Reynolds’s Amended Complaint do not allege any facts allowing the Court to draw the inferences Reynolds suggests." Plaintiff's arguments are too speculative and conclusory to allow this case to proceed to discovery.

Monday, March 11, 2024

"Loser pays" provision in arbitration agreement may doom the arbitration entirely

You do not see this very often: an employee sues in court to enjoin mandatory arbitration because the arbitration provision that he signed at the start of his employment was unlawful and unenforceable under state law. The Court of Appeals agrees with the lower court and the case returns to the lower court for more proceedings which may ultimately stop the arbitration from proceeding.

The case is Vidal v. Advanced Care Staffing, a summary order issued on March 7. When Vidal arrived in the United States to work for defendant as a nurse, he signed an arbitration agreement, which contains a "loser pays" provision that says the prevailing party in the arbitration is entitled to arbitral costs and attorneys' fees. When Vidal quit his job, his former employer commenced an arbitration proceeding against him, claiming Vidal had breached the contract. 

As the Court of Appeals (Calabresi, Lohier and Cabranes) sees it, under the "loser pays" provision, if Vidal loses the arbitration, the costs and fees will "effectively preclude him from pursuing his claims and would be prohibitively expensive." At the preliminary injunction stage of the case in the district court, Vidal produced his financial record to prove that his monthly income was far below the potential arbitral costs and attorneys' fees in the event the defendant were to prevail at the arbitration.

Other Circuits have also held that fee-shifting provisions in arbitration clauses may deter certain plaintiffs who want to vindicate their statutory rights in arbitration. "Whether the 'loser pays' provision undermines Vidal's ability to vindicate his rights here as a matter of substantive federal law or state law presents a serious question of law and fact that requires more detailed findings about Vidal's finances, the potential costs of arbitration, and the possibility that Vidal will incur such costs." 

The case is therefore remanded to the district court for defendant to present additional evidence supporting its arguments opposing Vidal's demand for a permanent injunction. So it looks like the case is not yet over. But this ruling is a powerful argument in Vidal's favor that the arbitration should not proceed.

Thursday, March 7, 2024

SDNY sustains $1.725 million compensatory damages award in hostile work environment case

This hostile work environment case went to trial in the Southern District of New York before Judge Hellerstein. The jury awarded plaintiff $1.725 million for pain and suffering and another $1 million in punitive damages. These damages were spread among two different defendants. The verdict and damages awards are upheld in their entirety.

The case is Pizarro v. Euros El Tina Restaurant, 20 CIv. 5783 (AKH), 2024 WL 837572, issued on February 27. First, the court finds the evidence supports the liability verdict. In order to have the verdict vacated, defendant must show that no reasonable jury would have ruled in plaintiff's favor, and that the jury in this case ruled in plaintiff's favor based on speculation, sympathy, and without sufficient evidence. These motions are difficult to won, and Judge Hellerstein does not give extended discussion on this, noting that the evidence of sexual harassment was "overwhelming" and "no employee is required to experience such harassments, male or female." Nor was plaintiff required to identify a comparator to support her finding gender discrimination under the New York City Human Rights Law, which sets a "treated less well" standard for plaintiffs, far more lenient than Title VII. Defendants did not challenge the verdict under the Title VII, for some reason.

As for remittitur, I note that courts in the Second Circuit group these damages claims under three categories: (1) garden variety, (2) significant, and (3) egregious. The egregious cases generate the highest damages awards, into the seven figures. But trial judges in the Second Circuit freely reduce high damages awards as a matter of course, almost treating them as advisory verdicts as the judges then review the evidence to ensure the damages are in line with prior, comparable cases. For this reason, we have very few million dollar verdicts upheld in the Second Circuit.

But this is one of the successful million dollar verdicts. Judge Hellerstein writes that "cases in this Circuit involving 'egregious' claims of sexual harassment, including those that take place in the workplace, and over several years, have led to similar amounts in compensatory damages when considering adjustments for inflation." Those cases include Turley v. ISG Lackawana, Inc., 774 F.3d 140 (2d Cir. 2014) ($1.32 million); Olsen v. County of Nassau, 615 F. Supp. 2d 35 (E.D.N.Y. 2009) ($1 million); Osorio v. Source Enterprises, Inc., 2007 WL 683985 (S.D.N.Y. 2007) ($4 million on retaliation claim); and Zeno v. Pine Plains Cent. Sch. Dist., 702 F.3d 655 (2d Cir. 2012) (a case I tried and handled on appeal that yielded $1 million for racial harassment without physical assault).

What entitles plaintiff to the large compensatory damages award is that she testified that she was groped and molested on numerous occasions, she feared rape and sexual assaults, and tried to commit suicide after the defendant tried to rape her. This evidence also supports the punitive damages award, including the fact that plaintiff endured a decade-long and worsening pattern of physical and verbal harassment, groping and pinching, exposure to male private parts and masturbation, and an attempted rape. 

Wednesday, March 6, 2024

Plaintiff wins Equal Pay Act appeal

The Court of Appeals holds that a jury may find that a former Verizon employee has a claim under the Equal Pay Act. 

The case is Moll v. Telesector, Inc., issued on February 28, two years after oral argument. The sexual harassment and retaliation summaries are at these links. In this portion of the decision, the Court of Appeals (Kearse, Walker and Sullivan) holds that one of plaintiff's coworkers is a legitimate comparator under the EPA's strict comparison guidelines.

To make out a prima facie case on equal pay, the plaintiff must show "[1] the employer pays different wages to employees of the opposite sex; [2] the employees perform equal work on jobs requiring equal skill, effort, and responsibility; and [3] the jobs are performed under similar working conditions." 

As for comparators Winley and Dean, they were hired at $90,000 and $88,000 per year at at time when Verizon was looking for specialists on voice and data, enticing job applicants to leave companies that were more entrenched in these products. Plaintiff did not have this kind of experience when these two men were hired. On these facts, plaintiff cannot claim an EPA violation based on what the fellas were making. Her skills were not comparable to their skills, and their higher salaries were therefore justifiable under the EPA.

Comparator Spencer, however, gives plaintiff a case under the EPA because he was not hired away from another company for his management duties, and he was a longtime Verizon employee who did not have the skills that Winley and Dean had. Spencer got a raise when the company wanted to transfer him to a different division; he got that raise, elevating him over plaintiff's salary. When he left the company, Spencer ultimately earned more than $15,000 than plaintiff. Adding to its analysis, the Court of Appeals writes:

even if Spencer's previous experience could explain the difference between his and Moll's salaries in 1997 when their employment in ESG began, that factor would not explain why the salary gap persisted. Differences in education and experience at the time of hiring are likely to matter less as the employees spend years on the job, leading to less of a disparity between salaries. See generally King v. Acosta Sales & Marketing, Inc., 678 F.3d 470, 473-75 (7th Cir. 2012). That did not occur here. When Spencer left ESG in 2004 he was still an SE II, and Moll had been promoted to SE II. Yet, the difference between their salaries after both had been in ESG for those seven years had not shrunk but in fact had increased. 

That citation to a Seventh Circuit case shows that Moll's case raises a new issue in the Second Circuit. The extended discussion on this issue also shows that EPA cases require careful analysis of the plaintiff's case to ensure her comparators are squarely like her case. The Court of Appeals notes that plaintiff abandoned her Title VII case on the equal pay claim. Since this case was briefed a few years ago, that may be because the Court of Appeals had not yet held that Title VII equal pay claims are easier to win than EPA claims, as Title VII does not require an exact match between the plaintiff and her comparators. Still, plaintiff is able to proceed to trial on her EPA claim because of the Spencer comparison, and one cause of action is better than none.