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October 16, 2010

Vicarious employer liability in sexual harassment and retaliation claims under NYCHRL §8-107 are not shielded by Faragher-Ellerth

New York City Human Rights Law (“NYCHRL”) and Federal Law do not treat sexual harassment and retaliation claims the same. While courts generally interpret state and local civil rights statutes consistently with federal precedent where the statutes are substantially and textually similar (McGrath v. Toys “R” Us, Inc., 3 N.Y.3d 421, 429, 821 N.E.2d 519, 788 N.Y.S.2d 281 (2004)), with respect to NYCHRL §8-107(13) that generalization is limited by the plain language of statute and legislators’ intent.

In Federal Title VII litigation employers are entitled to utilize the Faragher-Ellerth affirmative defense enumerated by the Supreme Court in Faragher v. City of Boca Raton, 524 U.S. 775, 118 S. Ct. 2275, 141 L. Ed. 2d 662 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, 141 L. Ed. 2d 633 (1998). This affirmative defense shields the employer from Title VII sexual harassment claims if the employer can show that: (1) no tangible employment action was taken against the complaining employee (e.g., discharge, demotion or undesirable reassignment) as part of the alleged harassment; (2) the employer exercised reasonable care to abate and promptly correct any sexually harassing behavior; and (3) the complaining employee did not fully utilize preventative or corrective procedures provided by the employer. Zakrzewska v. The New School, 2010 NY Slip Op 3796, 11, 14 N.Y.3d 469, 902 N.Y.S.2d 838 (N.Y. 2010). In Zakrzewska, the Court of Appeals ruled, on a question certified by the Second Circuit, that the Faragher-Ellerth defense to sexual harassment and retaliation claims is not available to employers under §8-107 of the New York City Administrative Code.

Section 8-107(1)(a) of the NYCHRL prohibits discrimination on the basis of, inter alia, age, race, national origin, gender, disability, marital status, sexual orientation and citizenship. An employer can be found vicariously liable for its employee’s discriminatory conduct under §8-107(13)(b) where “(1) [t]he employee or agent exercised managerial or supervisory responsibility; or (2) [t]he 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.” Two later provisions of the statute, §8-107(13)(d) and (e), provide that if the employer can prove that it (a) had an established policy for the prevention and detection of discrimination by employees, agents or independent contractors and (b) had a record of few or no prior incidents of discriminatory conduct by the accused employee, agent or independent contractor, then this evidence will mitigate the amount of civil and punitive penalties damages that may be imposed and the evidence shall be considered in determining the employer’s liability under §8-107(13)(b)(3). The Court of Appeals found that based on the rules of statutory construction (the “plain meaning”) that the application of the Faragher-Ellerth affirmative defense would be inconsistent -- because only for §8-107(13)(b)(3), dealing with non-supervisory employees, did the legislators provide that an employer’s established anti-discrimination policies and procedures could shield liability. For sections 8-107(b)(1) and (2), the employer’s policies are considered only for the limited purpose of minimizing the amount of damages that may be imposed, i.e., the anti-discrimination policies and procedures will not insulate the employer from liability. The Court also examined the statute’s history and found that the legislators enacted §8-107(13) with the intent of imposing “[s]trict liability in the employment context for acts of managers and supervisors” who participate in discriminatory behavior or knowingly allow discriminatory conduct by employees. Thus, in defending actions under NYCHRL, counselors should be aware that what may be available in a substantially similar federal action as an affirmative defense, will not be available under this state statute.

Mark J. Lemire, Esq.

Plaintiff does not file a timely charge challenging adoption of a practice with the EEOC; no problem – Plaintiff may still maintain a disparate impact claim based on later application of the unlawful employment practice

Under Title VII of the Civil Rights Act of 1964 employers cannot promulgate practices that cause a disparate impact on the basis of race, color, religion, sex and national origin. 42 U.S.C. §2000e-2(k)(1). In Lewis, Jr., et al. v. City of Chicago, 130 S. Ct 2191, 176 L. Ed. 2d 967 (2010), the Supreme Court dealt with a case where unsuccessful firefighter applicants sued the city for its practice of first selecting only from the “well qualified” applicant pool, those who scored 89/100 or above on a written exam, which had a disparate impact on African Americans. The City stipulated that its 89-point cutoff for “well-qualified” applicants had a disparate impact on African Americans, but sought summary judgment because the plaintiffs had failed to timely meet the charge filing requirements under Title VII. Before initiating an action under Title VII a Plaintiff must exhaust his/her administrative remedies, including filing a timely charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) (or other appropriate state agency). 42 U.S.C. §2000e-5(e)1. Thus, the City argued that since the earliest claim filed with the EEOC by an applicant was on March 31, 1997, more than 300 days after the claim accrued, which is the deadline set forth in Title VII, that summary judgment was appropriate. The Seventh Circuit agreed with the City, reversed the District Court, and granted the City’s summary judgment motion. The Circuit Court found that since the only discriminatory act was sorting the scores into categories, including “well-qualified,” that the earliest EEOC charge filed on March 31, 1997 was outside the 300 day deadline and untimely. Lewis, 130 S. Ct. at 2196. The Circuit Court reasoned that later hiring decisions were not material “because ‘the hiring only of applicants classified ‘well qualified’ was the automatic consequence of the test scores rather than the product of a fresh act of discrimination.” Id.

The city, citing United Air Lines, Inc. v. Evans, 431 U.S. 553, 558, 97 S. Ct. 1885, 52 L.Ed. 2d 571 (1977), argued that present effects of prior actions cannot lead to Title VII liability. Id. at 2198. And that, since a timely charge attacking the original practice was not filed, the city was entitled to treat the past act as lawful. The Supreme Court disagreed and explained that the proper question, was not whether the charge was timely based on when the unlawful employment practice originally occurred, because for disparate impact claims, as opposed to disparate treatment claims, discriminatory intent within the limitations period is not required. Rather, the proper question was whether the city’s continued use/implementation of that unlawful practice, using test scores of 89 or above in selecting subsequent classes, stated a cognizable disparate impact claim under Title VII? Id. at 2197.

To establish a prima facie disparate impact claim a plaintiff must show the use of an employment practice that causes a disparate impact on a protected class. Id. All parties agreed that except for the first round of selection, in May 1996, the city’s use of the cutoff score in selecting subsequent candidates occurred within the charging period, i.e., within the 300 days of March 31, 1997. Thus, if petitioners could bring new claims based on those later selections, their claims would be timely; making the issue whether the petitioners’ claims accrued at all? The Court found that based on the elements set forth in 42 U.S.C. §2000e-2(k)(1)(A)(i) that a disparate impact claim “is established” merely by showing that “an employer ‘uses’ an ‘employment practice’ that ‘causes a disparate impact’ on one of the enumerated bases.” Id. at 2198. Thus, each subsequent implementation of the decision to use the cutoff in selecting later classes constituted a new violation that was cognizable under the law.

The Court acknowledged that either reading of the statute produced puzzling results. Under the city’s reading, an employer may continue using an unlawful practice, where no timely charge is filed, with impunity despite a continuing disparate impact on a protected class. Whereas, under the Supreme Court’s interpretation, employers could be subject to disparate impact claims for practices that have been in place for years and where essential evidence related to the business-necessity defense may be unavailable by the time later suits are brought. Id. at 2000. The Court, however, reaffirmed that its role was to give effect to the law enacted by Congress, not to assess the consequences of the law and adopt the least troublesome approach. Id.

Mark J. Lemire, Esq.

About October 2010

This page contains all entries posted to Business Torts and Employment Litigation Blog in October 2010. They are listed from oldest to newest.

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