First Department reinstates sex discrimination case

The Appellate Division has reinstated a sex discrimination case against a securities firm on the basis that the case is not untimely and the plaintiff can argue that her termination was the product of a continuing violation. This is a useful ruling for employment discrimination plaintiffs under the New York City and State Human Rights Laws.

The case is Farmer v. Mizuho Securities, LLC, issued on May 12. Plaintiff claims the brokerage firm assigned her a smaller percentage of the market and a lower risk limit compared with male colleagues, and that a supervisor made disparaging comments about her appearance and suggested that she use her gender to gain favor with male colleagues. After plaintiff complained to HR about this, the supervisor vowed to get her fired, and he disparaged her job performance to others at the firm, calling her a cheater. She was forced to resign against her will. 

While the lower court dismissed the case on the pleadings, the First Department holds the plaintiff has a viable case, noting that pleading standards under the City law are lenient in discrimination cases, in contrast to the federal system, where cases are dismissed under a more exacting test thanks to the Supreme Court's dual rulings in the late 2000's, Twombly and Iqbal. "Given the allegations that defendant terminated plaintiff following months of consistently disparate treatment, plaintiff adequately pleads a causal connection between the disparate treatment and the termination. In addition, plaintiff's allegation that defendant falsely characterized its decision to end her employment, stating that it was a voluntary departure, further raises an inference of discrimination."

In emphasizing that federal pleading standards do not apply in state practice, the First Department says out loud what few state appellate rulings have overtly said on this topic, though the understanding that Iqbal pleading does not apply under the Civil Practice Law and Rules.  

The hostile work environment claim is also reinstated. While the lower court said this claim fell outside the statute-of-limitations, "the complaint, as pleaded, sufficiently alleges that the termination was the culmination of a single continuing pattern of discriminatory or retaliatory conduct extending into the limitations period, thus linking the wrongful conduct to the termination. It cannot be said as a matter of law that [the] alleged discriminatory and retaliatory acts . . . were not part of a single continuing pattern of unlawful conduct extending into the three-year period immediately before the filling of the complaint."

The First Department further holds that plaintiff's termination falls within the continuing violations rule, rejecting the trial court's ruling that her termination should be considered legally distinct from other kinds of gender-based treatment. The Court observes, "The City HRL focuses on unequal treatment regardless of whether or not the defendant has engaged in tangible conduct, such as hiring and firing. Thus, under the City HRL, the continuing violation doctrine can operate to link untimely allegations of unequal treatment to timely allegations of unequal treatment, such as plaintiff's termination."

Finally, have have further proof that the State and City HRL's should be interpreted identically. The City HRL, and its liberal proof requirements, has been on the books for several decades. When the State Legislature amended the State HRL in 2019, it was unclear if that law aligned with the City law. It does. Courts are now saying as such, and the First Department explicitly says so in this ruling, perhaps for the first time, though it cites Syeed v. Bloomberg LP, 41 N.Y.3d 446 (2024), a State Court of Appeals case, for that principle.