2d Department sustains sexual harassment finding against Boston Market

The Appellate Division has sustained a finding from the New York State Division of Human Rights that found a female employee was sexually harassed at Boston Market in Orange County. The Second Department also holds the damages and penalties were proper under the New York State HRL. The liability finding broadly interprets the Human Rights Law in that Boston Market was liable because the harasser was the plaintiff's supervisor.

The case is In the Matter of the New York State Division of Human Rights v. Boston Market Corp, issued on October 14. 

Bless Clarke was hired by Boston Market in July 2017 as a cashier, food server, and crew member, working there until April 2020. Nicholas Foreman,worked at the restaurant from October to approximately November 19, 2019. Employees recognized Foreman as the manager even though his formal managerial status was unclear. In the presence of Assistant General Manager Robert Smith, Foreman made sexually inappropriate comments to Clarke. Smith giggled at these comments but did nothing to stop them. Foreman also sometimes pinched Clarke’s leg, prompting her to tell him not to touch her. Clarke additionally observed Foreman appearing intoxicated at work and reported this to Smith, who said he would notify General Manager Michele Carbon.

On November 18, 2019, Foreman began following Clarke at work. She attempted to avoid him by moving into the dining room, but he hugged her, pinned her arms, and forcibly kissed her on the mouth. Clarke struck Foreman, ran to the bathroom, and began crying. Clarke reported the assault to Smith, who contacted Carbon. Carbon instructed Smith to send Foreman home. Smith told Clarke to remain in the bathroom while Foreman was directed to leave. Ten minutes later, Clarke emerged and discovered that Foreman was still present. He apologized and claimed he had been “just trying to take the sickness” out of her, referring to her cold. Foreman was sent home. The following day, Carbon reviewed security-camera footage of the incident and terminated Foreman's employment.

Following the harassment and assault, Clarke experienced paranoia, depression, anxiety, and panic attacks that continued at least through December 2021. She avoided public places because she feared encountering Foreman and experiencing another panic attack. She also had difficulty eating. In May 2021, she began counseling, during which she discussed the sexual harassment.

On these facts, the SDHR found Boston Market liable for sexual harassment, awarding Clarke $75,000 for pain and suffering and fining Boston Market $50,000. The Second Department, which defers to the SDHR's factual findings in these cases, holds there is substantial evidence to support the liability findings and that the damages and fine are not excessive. 

The Appellate Division does not analyze the factual record or explain how the SDHR reached its determination, but what strikes me about this case is that the SDHR prevailed even though Carbon appeared to take remedial action after learning about the sexual harassment, firing Foreman the next day after reviewing the security camera footage. But, according to SDHR's appellate brief, Boston Market lost the case because the SDHR found that Foreman was a supervisor. The brief states, "The Division found Boston Market liable for Mr. Foreman’s sexual harassment of Ms. Clarke. It reasoned that because Mr. Foreman is a supervisor, 'that harassment is attributable to Boston Market.'” SDHR appears to interpret the amended New York State HRL to permit liability in this circumstance, a departure from the prior statute (and Title VII), which required the plaintiff to show that management condoned or supported the harassment. What also clinched victory for the SDHR was that the restaurant did not stop Foreman when he had harassed Clarke on prior occasions.

To the extent an SDHR brief in the Appellate Division represents a policy pronouncement useful for other cases, here is the SDHR's analysis, departing from the First Department's interpretation of the NYSHRL as well as the Supreme Court's leading Title VII cases on this issue, Faragher and Ellerth:

the Division submits that the language of EXEC. LAW §296(1)(h), in conjunction with its legislative history and the evolution of a stricter liability standard in case law construing the state Human Rights Law in the wake of Faragher and Ellerth, weigh against the interpretation that the First Department has given this new subsection respecting vicarious liability as dependent on supervisory status. The provision of the New York City Code requiring that, in order for an employer to be liable under the City Human Rights Law, either the wrongdoer must be a supervisor or the employer condoned the discriminatory act has never had a statutory counterpart in the state Human Rights Law. 

 The Commissioner's order in this case will help plaintiffs win their cases provided the plaintiff's supervisor committed the harassment, regardless of management's response. It reads:

Effective August 12, 2019, the Human Rights Law was also amended to ensure that the provisions of the law be construed liberally for the accomplishment of the remedial purposes thereof, regardless of whether federal civil rights laws have been so construed. The amendment further mandated that exceptions to and exemptions from the provisions of the law shall be construed narrowly in order to maximize deterrence of discriminatory conduct. See Human Rights Law § 300. As a result of these amendments, the case law that developed under the prior “severe or pervasive” standard is no longer applicable to harassment cases. Harassment claims are now analyzed more like claims under the New York City Human Rights Law than federal law. See Wellner v. Montefiore Med. Ctr., 2019 WL 4081898 (S.D.N.Y. 2019)

Complainant has proven that she was sexually harassed by Foreman, who engaged in inappropriate behavior towards her throughout his employment with Boston Market by making comments about her body and undergarments and touching her legs. On November 18, 2019, Foreman attacked Complainant by hugging her and kissing her on the lips while she resisted him. Foreman’s conduct subjected Complainant to inferior terms and conditions of employment because of her sex and constituted sexual harassment under the Human Rights Law. Because Foreman was a supervisor, that harassment is attributed to Boston Market.

 

Welcome to New York Times v. Sullivan

A Republican Congressman sued NBC over a Rachel Maddow's comment that he had accepted material from a Russian agent without notifying the authorities. That comment was apparently false, but Maddow got the "news" from a Politico article. The congressman, Devan Nunes, sued NBC for defamation. The lawsuit fails because Nunes cannot prove actual malice.

The case is Nunes v. NBC Universal, a summary order issued on October 15. Defamation cases in the United States are difficult to win when the plaintiff is a public figure, like a Congressman. This is because the Supreme Court in New York Times v. Sullivan (1964) said public figures have to prove actual malice. This heightened standard, said the Court, ensures public debate will not be quashed by fear of a lawsuit, and that people may get their facts wrong on public issues so long as they do not knowingly repeat false information or rely on untrustworthy news sources.

Plaintiff wanted the Second Circuit (Calabresi, Lee and Nardini) to disregard the actual malice test. There is a movement afoot to accomplish just that, and some conservatives on the Supreme Court had suggested it is time to do so. But we are not there yet, and actual malice is embedded in our constitutional system as much as the Dormant Commerce Clause and Sovereign Immunity. Besides, New York law recognizes the actual malice test. Either way, plaintiff has to prove actual malice.

Summary judgment was proper on this claim because plaintiff cannot show that Rachel Maddow knowingly repeated a falsehood. In relying on the Politico article, she acted reasonably under the constitutional order, as Politico is not the Weekly World News. The Second Circuit writes, 

"In New York Times, the Supreme Court held that a defendant’s reliance on a responsible source negates a finding of “the recklessness that is required for a finding of actual malice.” “Similarly, this Court has held that where reporters’ false statements in an article were based on reliable sources, the defendant could hardly be accused of gross negligence, much less actual malice.” Nunes provided no evidence at the summary judgment stage that provided any basis for a reasonable inference that Maddow or Gnazzo should have regarded the Politico article as unreliable. 

 

Employees get paid when they are required to show up early but there is no work to perform

The Second Circuit has reinstated a wage-and-hour lawsuit alleging that a supermarket required employees to arrive 15 minutes before their shifts but did not pay them when managers were late unlocking the stores. The court holds that the Fair Labor Standards Act can require employers to compensate employees for waiting time when they are required to report for work at a designated time but management prevents them from actually starting work. 

The case is Santos v. Lidl US, LLC, issued on October 13. Santos worked as a store clerk at Lidl grocery stores on Long Island. Her opening shift was scheduled to begin at 5:00 a.m., but Lidl required her and other employees to arrive 15 minutes earlier. Sometimes, the stores remained locked because opening managers did not arrive until 5 a.m. or later. Picture the employees standing around in the parking lot and outside the front door at 4:45 a.m. waiting for a supervisor to show up and let them into the store. 

Employees could not clock in until they entered the stores. When managers were late, employees had to wait outside without pay despite having reported to work at the time Lidl required. This happened approximately once a week, costing plaintiff 15 minutes of wages. During five weeks, the unpaid time also resulted in lost overtime compensation.

Plaintiff sued under the FLSA and New York Labor Law, seeking unpaid wages on behalf of herself and other employees. The district court dismissed the claims, reasoning that the Portal-to-Portal Act excluded the waiting time from compensable work. The Court of Appeals revives the case.

The Second Circuit (Robinson, Rakoff [D.J.], and Sullivan in dissent) notes that the Portal-to-Portal Act generally excludes time spent on activities preliminary or subsequent to an employee’s principal job duties. But the statute does not categorically exclude all waiting time before a shift. DOL regulations distinguish between employees who are “engaged to wait” and those who are “waiting to be engaged.” An employee who voluntarily arrives early and waits for work generally is not entitled to compensation for that time. By contrast, an employee who must report at a particular hour, is ready and willing to work, and cannot begin working for reasons beyond the employee’s control may be entitled to compensation.

Plaintiff plausibly alleges compensable waiting time. At the pleading stage, the court had to accept her allegations that Lidl required her to arrive at 4:45 a.m. and that she sometimes could not enter the store because her manager had not arrived. At the same time, the court rejected Lidl’s argument that the claim was too trivial to be actionable under the FLSA’s de minimis doctrine. Under Second Circuit precedent, courts consider the difficulty of recording the time, the aggregate amount of compensation at stake, and the regularity of the activity. Because Santos alleged 15 minutes of unpaid time each week, the court could not conclude from the complaint that the time was insignificant or too difficult to record. Employers cannot automatically disregard regularly occurring, readily ascertainable working time merely because each individual period is short.

Plaintiff loses retaliation case on appeal

A plaintiff can establish a prima facie case of retaliation and still lose at summary judgment. That is what happened to an Office of Mental Health employee whose discrimination complaint was followed by a series of disciplinary actions. The plaintiff loses because defendant had documented her performance problems before she ever filed the complaint.

The case is Rahman v. Carlin, a summary order issued on October 6. Plaintiff worked for OMH. On April 29, 2019, she filed complaints with the State Division of Human Rights and the EEOC, alleging discrimination over her failure to receive a promotion and equal pay. She claimed the discrimination was based on her race, color, and national origin. She later sued, claiming defendants retaliated against her because she filed that complaint.

The district court granted defendants summary judgment. The Second Circuit (Jacobs, Merriam and Schwartz) affirms. Plaintiff identified several allegedly retaliatory actions, including two interrogations, paid administrative leave, a disciplinary notice, and an unsatisfactory performance evaluation. She also argued that earlier performance evaluations were also adverse actions. The Second Circuit stated that, under Section 1983 plaintiff must show a materially adverse employment action, while the NYSHRL reaches conduct reasonably likely to deter someone from opposing discrimination. More on these dueling legal standards at the end of this blog post.

Plaintiff loses because her performance problems predated her discrimination complaint. The record showed concerns about her work performance before April 29, 2019. An April 17 email discussed concerns about her knowledge of workplace policies, failure to check email, responsiveness, and interactions with a supervisor. Later evaluations and disciplinary measures continued to cite documented performance problems. Nor could plaintiff identify any comparators who were treated differently. And the challenged actions were not sufficiently close in time to her April 2019 complaint to support an inference of retaliation.

The Court says the retaliation test under Section 1983 requires a showing that plaintiff suffered a material adverse action, in contrast to state law's dissuasion test. Is that correct? The Second Circuit cites Buon v. Spindler, 65 F.4th 64 (2d Cir. 2023), for this proposition, but Buon was a disparate treatment case, not a retaliation case. Disparate treatment cases apply a different standard, one that is less favorable for plaintiffs than the dissuasion test in retaliation cases. What is more, Buon predates the Supreme Court's ruling in Muldrow v. City of St. Louis, 601 U.S. 346 (2024), which rejected the materiality test applied in Buon for a more forgiving test, requiring that plaintiffs in disparate treatment cases only show "some harm," not material or significant harm. The analysis in Buon is outdated. This apparent error would not have made a difference in the outcome of this appeal, as the Court of Appeals also rejected plaintiff's case under the dissuasion test under state law. 

Plaintiff loses political affiliation case

The Court of Appeals holds that three Program Integrity Officers who worked for the Orange County Sheriff cannot sue for First Amendment/political affiliation retaliation because they held political jobs, which gave the Sheriff discretion to replace them after they supported the Sheriff's political opponent in the primary election.

The case is Cowart v. Arteta, a summary order issued on October 4. This case highlights an issue that I've raised as a CLE lecturer over the years: that much of constitutional law is judge-made law, and the judges love their multi-part tests, again, created by the courts, in working through the constitutional puzzle. The First Amendment protects the right of speech and political association, but its plain language does not help the courts resolve cases like this. The federal courts, as they have done in all constitutional cases, have therefore created a balancing test. In cases like this, that test pits the individual speech/association right against an elected governmental official's need to implement their policies.

In Elrod v. Burns, 427 U.S. 347 (1976), and Branti v. Finkel, 445 U.S. 507 (1980), the Supreme Court created a test for political association cases: public employees can be dismissed from employment based on their political affiliations without violating the First Amendment if “the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved.” The Court did not detail what constitutes "appropriate requirement." For that inquiry, we look to the Second Circuit, which in Vezzetti v. Pellegrini, 22 F.3d 483 (2d Cir. 1994), created an eight-factor test. These factors  

are “useful in deciding whether a position” is subject to the Elrod-Branti exception: whether the employee (1) is exempt from civil service protection, (2) has some technical competence or expertise, (3) controls others, (4) is authorized to speak in the name of policymakers, (5) is perceived as a policymaker by the public, (6) influences government programs, (7) has contact with elected officials, and (8) is responsive to partisan politics and political leaders. 

Further complicating matters, none of these eight factors is dispositive. We look to the totality of the circumstances. No case is going to be so one-sided that the court can easily decide the matter. Defendants will point to some of the factors, and plaintiffs will point to the other factors, and each side will say the balance tips in their favor. But you can see from the eight factors that elected officials and their appointees have wide latitude in hiring and promoting political loyalists despite the First Amendment's protection against associational discrimination.

Here, the Court of Appeals (Merriam, Livingston and Schwartz) says, plaintiffs each held a position for which political affiliation was an appropriate reason to fire them. They conducted officer integrity checks and internal investigations into allegations of officer corruption and/or misconduct, interviewed witnesses and targets of internal investigations, completed and filed classified and confidential reports with the Sheriff, reviewed office policies and forms and ensured compliance with professional police and corrections professional standards, maintained working relationships with Sheriff and Corrections command staff and other agencies, and completed special assignments. This is important work, but was it inherently political in nature? Yes, says the Court of Appeals.

The Sheriff was entitled to replace plaintiffs with people who shared his political views or philosophy. Or his management style. Plaintiffs did not have civil service protection, they were empowered to speak for the Sheriff, their jobs required expertise, and the job description make clear that a PIO has “wide latitude for independent judgment in carrying out” duties “in accordance with established office policies.”

Court broadly interprets the Ending Forced Arbitration Act

The Second Circuit has clarified the scope of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), holding that when the EFAA applies, it prevents enforcement of a pre-dispute arbitration agreement as to the entire lawsuit, not just the sexual-harassment claims.

The case is Diaz-Roa v. Hermes Law, issued on September 30. This is the second important EFAA case in the Second Circuit in recent weeks. The last ruling was favorable to defendants in limiting the scope of the continuing violations rule in EFAA cases. This ruling is quite favorable to plaintiffs.

Plaintiff worked for Hermes Law beginning in 2017 and eventually became an executive at ClaimDeck, a legal-technology company founded by Hermes Law's owner, Dwayne Hermes. She received stock options representing approximately 10 percent of ClaimDeck. By August 2023, those options had fully vested and were worth more than $1 million. In December 2023 and again in January 2024, plaintiff expressed her intention to exercise the options. She was fired shortly thereafter.

Plaintiff also alleged that she had been subjected to sexual harassment, claiming that defendants encouraged her to flirt with prospective clients, commented repeatedly on her appearance, and, at a business dinner, compared her to a piece of steak. She also alleged an earlier incident in which Hermes allegedly climbed onto a scooter behind her in a compromising position while another employee took photographs.

In her lawsuit, plaintiff asserted a series of claims, including sexual harassment under the New York City and New York State Human Rights Laws, breach of contract, violation of New York Labor Law § 193, tortious interference, and conversion. The latter claims arose from the alleged effort to terminate her before she could exercise her vested stock options. The defendants sought to compel arbitration based on an arbitration agreement Diaz-Roa had signed in 2018. The district court refused, holding that the EFAA rendered the agreement unenforceable with respect to the entire case. The defendants appealed.

A few asides. First, the Court of Appeals has jurisdiction to entertain defendants' immediate appeal from the trial court's order denying the motion to compel arbitration. Had the district court granted that motion, the Second Circuit would have had no jurisdiction to hear the appeal. That one-sided jurisdictional rule will not surprise plaintiffs' lawyers, who for the most part do not like arbitration, which gives employers a huge advantage because (1) there is limited discovery, (2) arbitrators are not required to follow the law, (3) there is no jury, (4) the proceedings are not public, (5) there is no right to appeal, (6) state courts are highly deferential to arbitration rules if you try to challenge them in court, (7) the employer usually pays the arbitrator for their time, (8) damages are generally lower, and (9) studies show that plaintiffs are less successful in arbitration than in court before a jury. The EFAA creates an exception to the rule that arbitration clauses are enforceable, but only when the plaintiff asserts a sexual harassment claim. The issue here is whether the non-harassment claims in the same case may also escape arbitration. The answer is yes. 

The EFAA amended the Federal Arbitration Act in March 2022, providing that, when properly invoked by someone alleging a sexual-harassment or sexual-assault dispute, a pre-dispute arbitration agreement is not enforceable “with respect to a case” that relates to that dispute. The defendants argued that “case” really meant individual claims. Under their interpretation, plaintiff's sexual-harassment claims could remain in federal court, but her unrelated conversion claim would have to go to arbitration.

Rejecting that interpretation, the Court of Appeals (Walker, Bianco and Perez) notes the ordinary meaning of the word “case.” A case means a lawsuit or judicial proceeding as a whole, while a “claim” refers to a particular demand for relief within that lawsuit. Congress knew how to use the word “claim” and actually used it elsewhere in the EFAA. The Court holds that Congress deliberately chose “case” in Section 402.

The Court also rejected the defendants' argument that this interpretation makes the statute's “relates to” language meaningless. A lawsuit must still have a connection to the sexual-harassment dispute. But once the EFAA applies to that case, the statute does not require courts to conduct a claim-by-claim arbitration analysis. In addition, the Court rejected reliance on the federal policy favoring arbitration. Congress itself amended the FAA through the EFAA and expressly created an exception for cases involving sexual-harassment or sexual-assault disputes. The FAA is a powerful statute, and it has sent countless cases to arbitration, but Congress does have the power to amend it, and it did so in response to the "Me-Too" era.

The Court declined to resolve a separate question concerning whether a plaintiff must merely allege a nonfrivolous sexual-harassment claim or must satisfy the more demanding Twombly/Iqbal plausibility standard to invoke the EFAA. The defendants did not properly challenge that issue on appeal, and they did not dispute that plaintiff's allegations satisfied even the higher standard.

Long Island Native American mascot dispute is revived on appeal

You may not be aware of this, but a culture war has been brewing on Long Island in recent years over the use of mascots featuring Native American imagery. The State of New York is trying to phase out "The Chiefs" and "The Warriors" and has issued regulations defining when districts and their employees may utilize or promote such mascots at school events.

The case is Wantagh Union Free School District v. New York State Board of Regents, a summary order issued on October 1. A state regulation says that public schools cannot use such names, logos or mascots except for classroom instruction. That would eliminate school and team mascots with Native American headdresses. Another rule says school officers and employees cannot "utilize or promote" mascots on school property or at a school function. That rule is the subject of this court ruling.

One plaintiff serves on the Wantagh Board of Education. He challenges this rule to the extent it may bar him from wearing Warriors apparel at a district sporting event. The district court dismissed his case, but the Court of Appeals (Walker, Park and Lee) reinstates it for additional analysis. Wearing such clothing is expressive conduct under the First Amendment. The clothing rule also implicates the First Amendment because he sues as a district volunteer, not an employee, which means he may not have to prove his clothing addresses a matter of public concern, a legal term of art that says the government cannot regulate public employee speech if covers political or social matters of interest to the community, like a whistleblower or letter-to-the-editor gadfly. Since plaintiff is an elected member of the Board of Education, the district court must determine whether the "public concern" framework applies to him or if he instead enjoys the same broader rights as any other member of the public who attends a high school football game.

The case also returns to the district court to consider the context of the plaintiff's speech. The Court of Appeals holds that wearing Warriors apparel at a public event may be intended to send a message about the state's restrictions on Native American mascots and also to support the team. This kind of "message" speech may be protected under the First Amendment. The district court has to determine in the first instance whether wearing this clothing is expression on a matter of public concern. If so, the regulation may be struck down as overbroad in violation of the First Amendment