The case is Zakrzewska v. The New School, decided by the New York Court of Appeals on May 6. This case originated in federal court, which certified the case for interlocutory appeal with the Second Circuit on the ground that it was not clear whether the Faragher affirmative defense applied under the New York City Human Rights Law. in turn, the Second Circuit threw up its hands, certifying this state-law issue for the New York Court of Appeals.
Under the plain terms of the City law, the employer is automatically liable when a supervisor sexually harasses a subordinate. If management takes the complaint seriously, the plaintiff may recover fewer damages, but unlike Title VII and the New York State Human Rights Law, prompt remedial action does not absolve management of liability. Under the City law,
[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; or
(2) the employer knew of the employee's or agent's discriminatory conduct, and acquiesced in such conduct or failed to take immediate and appropriate corrective action; an employer shall be deemed to have knowledge of an employee's or agent's discriminatory conduct where that conduct was known by another employee or agent who exercised managerial or supervisory responsibility; or
(3) the employer should have known of the employee's or agent's discriminatory conduct and failed to exercise reasonable diligence to prevent such discriminatory conduct.
The State Court of Appeals does not provide extensive analysis. The terms of the law are clear. Management is automatically liable for supervisor sexual harassment. This is how the City Council wanted it, according to the legislative history. While the defendant in this case argued that this law cannot circumvent the Faragher scheme that applies under the New York State Human Rights Law, the judges here rule that the City law does not violate state policy because it "merely creates a greater penalty for unlawful discrimination." The defendant further argues that the City law impedes deterrence of workplace harassment and therefore thwarts public policy because the affirmative defense under Faragher was designed to stop harassment before it happens. But, the Court of Appeals holds, this is a policy choice legitimately expressed by the City Council. The City law is legal.