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.

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.

"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.

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. 

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.

Retaliation claim against Verizon will head to trial

This retaliation claim against Verizon was dismissed on summary judgment. The Court of Appeals, after first holding the hostile work environment claims deserve a full airing at trial, also holds that the jury may find in plaintiff's favor on her retaliation claim, as well. This is shaping up to be a hell of a trial.

The case is Moll v. Telesector, Inc., issued on February 28. My write-up on the sexual harassment claims is that this link. On the harassment claim, I noticed the case, lengthy as it is, does not appear to clarify or extend the law in that area. The same holds true for the retaliation claim. We have a lengthy opinion because the record on appeal must be huge. And the facts are extensive.

Here are the facts on the retaliation claim: in December 2004, after plaintiff objected to the sexual harassment, management decided to send four Buffalo-based employees to work in its Syracuse office, 160 miles from Buffalo. The employer said if you don't want to work in Syracuse you can find another job at Verizon or take a severance package, the details of which were under wraps until the employees decided to leave the company. Of the four employees who were given this option, plaintiff and a coworker, Chase, wound up in Syracuse, unable to find other work within the company. Working in Syracuse was quite stressful for plaintiff, whose family still lived in the Buffalo area, and the flexible schedule that allowed plaintiff to sometimes work in Buffalo was eventually discarded, making matters worse for plaintiff who began to suffer anxiety and took a disability leave of absence. When another telecommunications provider merged with Verizon, they were "puzzled" by plaintiff's work arrangement and returned her to Buffalo. Plaintiff was eventually terminated in a reduction-in-force.

First, contrary to the district court's holding, the transfer to Syracuse could be deemed an adverse action even though plaintiff was given other options. While plaintiff was told to find other work within Verizon, she was given "an unrealistically short time to get another position within Verizon" or take the severance, which itself was unrealistic since plaintiff did not know its terms in advance and Verizon was free to change the terms. While the company claimed its had a "solid business reason" to make the transfers to Syracuse, one manager testified that "the purpose of developing the plan . . . was to get them to leave," and that supervisors "wanted to make life as difficult as possible for Ms. Moll and Ms. Byrne and stated that they believed this action would force them to leave." Byrne had also filed a Title VII action against Verizon that "to an extent, paralleled the present action."

Of course, what also made the transfer adverse was the distance between Buffalo and Syracuse and the frequency with which plaintiff would have to travel between these two locations, at minimum, a round-trip of 320 miles, up to 1,000 miles per week. This would dissuade a reasonable person from speaking out against discrimination again, the Burlington Northern standard the Supreme Court adopted in 2006.

When plaintiff returned to the Buffalo office in 2006, she was told to work near the harassers whose behavior gave rise to her lawsuit, and in 2007 the company began a RIF, making her one of 156 employees who would lose their positions. One manger said, post-RIF, that he was "proud to be able to terminate Ms. Moll." Plaintiff's termination is ripe for trial on her retaliation claim because (1) she was never given a reason why she was chosen for the RIF, and (2) plaintiff in fact possessed the skills that management later claimed (on the summary judgment motion) she lacked, and management's claim to the contrary was speculative.

Plaintiff may also win the retaliation claim because a similarly-situated male colleague, Shelton, was not fired despite similar qualifications, and one key management witness at deposition was unable to articulate why Shelton was better qualified or differently situate than plaintiff, and they jury could even find that Shelton was not better qualified than plaintiff. 

You get the picture. The Court of Appeals thoroughly reviews the record and prior proceedings in the case to make this one of the most comprehensive factual analyses you will see from this Court on a single-plaintiff harassment and retaliation claim. And I have not even summarized plaintiff's equal pay claim yet. Like I said, this should be a hell of a trial.

Verizon hostile work environment in western New York will go to trial

Lately, we have seen some lengthy Second Circuit rulings that reverse the grant of summary judgment in discrimination cases. This is another one, and I will write about the case in multi-parts. We will start with sexual harassment.

The case is Moll v. Telesector, Inc., issued on February 28. This case was argued in January 2022, which means the parties waited two years for a ruling, which raises a multitude of issues, comprising about 90 pages. Some of the evidence goes back to the 1990s.

The defendant is a subsidiary of Verizon Communications. While the district court said plaintiff proffered evidence revealing a triable fact issue on whether a reasonable person would have subjectively found the work environment abusive on account of sex, in dismissing the case, it held that plaintiff did not show an objective person would have perceived a hostile work environment. That objective/subjective distinction is difficult to resolve on a summary judgment motion.

The trial court identified 17 instances of sexual harassment/comments/gestures from 1998 through 2003. The Court of Appeals identifies a heck of a lot more than that, another 36 examples from that time period, including harassment endured by plaintiff's co-workers. The list of incidents goes on for pages and pages in this ruling and qualifies this as one of the worst workplaces for women that I've seen in any Second Circuit ruling. 

The Court of Appeals summarizes the evidence as follows:

In sum, Moll proffered evidence that overtly sexual or sexist comments, sexual innuendos, and gender-based disparagements were regularly directed at women in Verizon's enterprise solutions group or made about women in general--such statements being made in the woman's own office, or near a woman's desk, or to a woman in a manager's office, or about a woman amid persons in a casual gathering in a common office area, or in conference calls or meetings among co-workers, or in a van heading for a staff outing, or in a buffet line at an office party, or in meetings with clients. She proffered evidence that most managers did nothing to discourage that objectionable conduct--and that some managers participated in such conduct. 

Perhaps most troubling, as discussed above, Moll pointed to evidence that Irving--who as her co-worker had harassed her with sexually connotative comments and requests to come to his hotel room--after becoming her manager, left her a note saying that he "thought about [her] when he was in the shower." And as her manager, he insisted that she communicate with him only in person, demanded that she stay at the office alone with him late at night, and followed her to client lunches against her wishes because he wanted to "develop" her. Irving attended an HR awareness presentation at which he simply laughed throughout. Although Moll complained to HR about Irving's demonstration of contempt for the HR training presentation, Verizon did nothing in response.

For such a lengthy ruling, this case does not purport to clarify or extend the law of sexual harassment. Rather, after citing a few sexual harassment precedents, the Court of Appeals (Kearse, Walker and Sullivan) simply goes on to summarize each and every incident of sexual harassment en route to its holding that a reasonable person may find the work environment sufficient hostile as to violate Title VII.