Baldwin v Bank of Am., N.A.

[*1] Baldwin v Bank of Am., N.A. 2013 NY Slip Op 52194(U) Decided on December 20, 2013 Supreme Court, Kings County Battaglia, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 20, 2013
Supreme Court, Kings County

Shanette Baldwin, Plaintiff,

against

Bank of America, N.A., and JAY PEREZ, Defendants.



13838/13



Plaintiff Shanette Baldwin was represented by William Sipser, Esq. of Tuckner, Sipser, Weinstock & Sipser, LLP. Defendants Bank of America, N.A. and Jay Perez were represented by Aimée S. Lin of Edwards Wildman Palmer LLP.

Jack M. Battaglia, J.

The complaint of plaintiff Shanette Baldwin "seek[s] damages to redress the injuries Plaintiff . . . has suffered as a result of unlawful discriminatory employment practices taken against her on the basis of her gender, pregnancy, disability and/or perceived disability." (See Verified Complaint With Jury Demand ["Verified Complaint"] ¶ 1.) Defendants are Bank of America, N.A. (the "Bank"), her former employer, and Jay Perez, her former "supervisor" (see id. ¶ 4.)

Plaintiff's complaint purports to allege four causes of action under the New York City Human Rights Law (see New York City Administrative Code §8-107 et seq. ["City Human Rights Law"].) The First, Second, and Third Causes of Action are directed only against the Bank, and allege, respectively, that the Bank discriminated against Plaintiff "based on her gender" (see Verified [*2]Complaint ¶ 12), "based on her gender (pregnancy)" (see id. ¶ 15), and "based upon her disability and/or perceived disability due to her pregnancy" (see id. ¶18.) The Fourth Cause of Action is directed only against defendant Perez, charging him with "aiding, abetting, inciting, compelling and coercing the discriminatory practices suffered by Plaintiff" (see id. ¶ 21.)

Defendant Perez now moves pre-answer for an order, pursuant to CPLR 3211(a)(7), dismissing the complaint as against him. Defendant contends that the complaint "fails to state a cause of action" (see CPLR 3211[a][7]) against him, because "as a matter of law, an individual cannot be held liable for aiding and abetting his own conduct." (See Memorandum of Law in Support of Defendant Jay Perez's Motion to Dismiss ["Defendant's Memorandum"] at 3.) "In determining whether a pleading is sufficient to withstand a motion to dismiss pursuant to CPLR 3211 (a) (7), the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion to dismiss will fail . . . The pleading must be construed liberally, the factual allegations deemed to be true, and the nonmoving party granted the benefit of any possible favorable inference." (Matter of Baugher, 98 AD3d 1111, 1112 [2d Dept 2012] [internal quotation marks, brackets, and citations omitted].)

The complaint names defendant Perez in only two paragraphs, alleging that he was, "at all relevant times, [the Bank's] Branch Manager and Plaintiff's supervisor" (see Verified Complaint ¶ 4); and that on a specified date Plaintiff informed Perez "that she was pregnant and suffered from severe morning sickness," "explain[ing] to [him] that her morning sickness was so severe that on several occasions she was forced to get off the train to gather herself before continuing her commute" (see id. ¶ 7.)The complaint also alleges that "Defendants terminated Plaintiff's employment, citing her pregnancy-related lateness as the reason for her termination" (see id. ¶ 9 [emphasis added].)

Defendant Perez notes that "Plaintiff does not allege that anyone other than Perez was aware of her pregnancy or pregnancy-related disability, took action against her because of her gender/pregnancy or pregnancy-related disability, or otherwise discriminated against her based on her gender, pregnancy, or pregnancy-related disability." (See Defendant's Memorandum at 3.) The statement is not strictly correct in that Plaintiff alleges that Defendants terminated her employment. In any event, Defendant does not say that such allegations relate to an essential element of Plaintiff's alleged claim against him, or otherwise explain the significance of the absence of such allegations to the Court's determination of this motion.

For purposes of this motion, Defendant accepts that the complaint states a cause of action against the Bank. Although not in these terms, Defendant also acknowledges that the City Human Rights Law provides, "It shall be an unlawful discriminatory practice for any person to aid, abet, [*3]incite, compel or coerce the doing of any of the acts forbidden" by the Law (see New York City Administrative Code §8-107[6].) (See Defendant's Memorandum at 3.) Defendant contends, however, that aiding-and-abetting liability cannot be imposed upon a coemployee whose allegedly discriminatory conduct is the basis for the employer's liability under the Law.

In support of his contention, Defendant cites a Second Department decision (see Matter of Medical Express Ambulance Corp. v Kirkland, 79 AD3d 886, 888 [2d Dept 2010]), and a decision

of a federal district court (see Raneri v McCarey, 712 F Supp 2d 271, 282 [SDNY 2010]), both of which were decided under the New York State Human Rights Law ("State Human Rights Law") (see Executive Law §296.) Also cited is a decision of Supreme Court, New York County, which was decided under both the State Human Rights Law and the City Human Rights Law. (See Krause v Lancer & Loader Group, LLC, 40 Misc 3d 385, 398-99 [Sup Ct, NY County 2013].)

The cited decisions in turn, directly or indirectly, rely upon four prior Appellate Division rulings (see Mitchell v TAM Equities, Inc., 27 AD3d 703, 707 [2d Dept 2006]; Strauss v New York State Dept. of Educ., 26 AD3d 67, 73 [3d Dept 2005]; Murphy v ERA Untied Realty, 251 AD2d 469, 471-72 [2d Dept 1998]; Trovato v Air Express Intl., 238 AD2d 333, 334 [2d Dept 1997].) All of these decisions address aiding-and-abetting liability only under the State Human Rights Law.

There is no State appellate decision addressing aiding-and-abetting liability under the City Human Rights Law. The text of the aiding-and-abetting provision in the City Law is the same as the text of the State provision but, as will appear, the context provided by history and the other provisions of the two Laws is materially different. That context points to broader application of the City Law.

Since the primary case authority addresses aiding-and-abetting liability only under the State Human Rights Law, that seems the best place to start. The applicable provision of the State Human Rights Law is, again, identical to the provision in the City Human Rights Law. It is an unlawful discriminatory practice "for any person to aid, abet, incite, compel or coerce the doing of any acts forbidden" under the respective Laws. (See Executive Law §296[6]; NYC Admin Code §8-107[6].)

In considering the scope of aiding-and-abetting liability under the State Human Rights Law, the courts began with a premise of a coemployee's limited individual liability under that law. "A corporate employee is not individually subject to an employment discrimination suit under the [State] Human Rights Law unless he or she has an ownership interest in the corporate employer or has the authority to do more than carry out personnel decisions made by others'." (Trovato v Air Express Intl., 238 AD2d at 334] [quoting Patrowich v Chemical Bank, 63 NY2d 541, 542 (1984)].) Since "only employees and employee-owners or those with specified authority are subject to employment discrimination suits under the [State] Human Rights Law," "[t]o find a coemployee liable as an aider and abettor would ignore the statutory and legal authority limiting the parties who may be sued for employment discrimination." (See id.)

On the other hand, where the plaintiff "alleg[es] that the owner-employer engaged in acts of [*4]unlawful discrimination," "[i]t is the employer's participation in the discriminatory practice which serves as the predicate for the imposition of liability on others for aiding and abetting," and the

plaintiff "properly state[s] a cause of action against the coemplyees." (See Murphy v ERA United Realty, 251 AD2d at 472.)

Clearly, a coemplyee who cannot be individually liable for employment discrimination cannot be liable as an aider and abettor of discrimination if a corporate employer or an owner-employee is not liable. "Where no violation of the [State] Human Rights Law by another party has been established, . . . an individual employee cannot be held liable for aiding and abetting such a violation." (Strauss v New York State Dept. of Educ., 24 AD3d at 73; see also Kelly G v Board of Educ. of City of Yonkers, 99 AD3d 756, 758-59 [2d Dept 2012]; Barbato v Bowden, 63 AD3d 1580, 1582 [4th Dept 2009]; Mascola v City Univ. of NY, 14 AD3d 409, 410 [1st Dept 2005].)

Thus the "rule" that "individuals cannot be held liable under Executive Law §296(6) for aiding and abetting their own violations of the Human Rights Law." (See Strauss v New York State Dept. of Educ., 26 AD3d at 73; see also Matter of Med. Express Ambulance Corp. v Kirkland, 79 AD3d at 888; Goldin v Engineers Country Club, 54 AD3d 658, 660 [2d Dept 2008]; Miloscia v B.R.G. Guest Holding, LLC, 33 Misc 3d 466, 479 [Sup Ct, NY County 2011], mod. on other grounds 94 AD3d 563, 564 [1st Dept 2012].) However, a coemployee can be charged with aiding and abetting the employer in discriminatory behavior engaged in by another. (See Mitchell v TAM Equities, Inc., 27 AD3d at 707.)

The cases relied upon by Plaintiff in opposition either recognize these principles or do not appear to challenge them. To the extent there is any question, it is whether a sufficient predicate for an employee's aiding-and-abetting liability can be found in the employer's encouraging, condoning, or approving that employee's discriminatory behavior alone. (See DeWitt v Lieberman, 48 F Supp 2d 280, 293-94 [SDNY 1999].) An affirmative answer to that question can be found in the decisions of federal district courts applying the State Human Rights Law. (See Piston v County of Monroe, 2012 U.S. Dist. LEXIS 139520, * 19 [WDNY 2012]; Lewis v Triborough Bridge and Tunnel Auth., 2001 U.S. Dist. LEXIS 361, * 4 [SDNY 2001], affd 31 F. App'x 746 [2d Cir. 2002].)

Those federal courts that find a sufficient predicate for aiding-and-abetting liability in the employer's liability for the coemployee's discriminatory conduct appear to rely on the Second Circuit's decision in Tomka v Seiler Corp. (66 F3d 1295 [2d Cir 1995].) In Tomka, the federal court held that "[n]one of the three individual defendants [had] an ownership interest in [the employer], and plaintiff [had] not alleged that either [of two of them] had the power to fire her," and as to the third, "no evidence [had] been presented to indicate that he could hire or fire [the plaintiff], or any other . . . employee." (See id. at 1317.) Although the individuals could not be directly liable for a violation of the State Human Rights Law, they could be liable under the aiding-and-abetting provision, since the plaintiff had "alleged that each of the individual defendants assaulted her and thereby created a hostile working environment" (see id.) Thecourt had held earlier in its decision that "even a single incident of sexual assault sufficiently alters the conditions of the victim's employment and clearly creates an abusive work environment" for purposes of federal [*5]antidiscrimination law. (See id. at 1305 [footnote omitted].) (The court did not address the proposition under the State Human Rights Law.) Once, therefore, the plaintiff "first establishes the employer's liability for the discriminatory practice," "[a]n employee may be held liable as an aider and abettor of her own conduct." (See Piston v County of Monroe, 2012 U.S. Dist. LEXIS 139520, * 19 [WDNY 2012].)

There are differences between a discrimination claim based upon disparate treatment and a claim based upon harassment/hostile environment. (See Forrest v Jewish Guild for the Blind, 3 NY3d 295 [2004]; Gonzalez v New York State Office of Mental Health, 26 Misc 3d 1227 [A], 2010 NY Slip Op 50282 [U] [Sup Ct, Kings County 2010].) Clearly, the authority of a coemployee to hire and fire is functionally different where the plaintiff is alleging a discriminatory adverse employment action than where the coemployee is the harasser or one of several who contribute to a hostile environment. Those differences do not expressly influence the decisions on aiding-and-abetting liability that this Court has seen.

The most recent Appellate Division decision to address Tomka treats the applicability of the federal court's approach to be an open question in the courts of this state. In Strauss v New York State Dept. of Educ. (26 AD3d 67 [3d Dept 2005]), the Third Department treats Tomka's aiding-and-abetting approach as an "exception" to the limited individual liability under the State Human Rights Law as determined by the Court of Appeals in Patrowich v Chemical Bank (63 NY2d 541 [1984]). (See Strauss v New York State Dept. of Educ., 26 AD3d at 72-73.) After noting that the Second Department declined to follow Tomka in Trovato v Air Express Intl. (238 AD3d 333 [2d Dept 1997]), the Third Department in Strauss found it unnecessary to accept or reject Tomka. (See Strauss v New York State Dept. of Educ., 26 AD3d at 73.)

"Even were [the court] to follow Tomka and recognize the possibility that a coworker could be liable - - under an aiding and abetting theory - - for his direct participation in any of the activities proscribed by the Human Rights Law," the court would nevertheless affirm the lower court's grant of summary judgment because the plaintiff failed to present a "cognizable legal basis" for holding the employer liable. (See Strauss v New York State Dept. of Educ., 26 AD3d at 73.) "Where no violation of the Human Rights Law by another party has been established, we find that an individual employee cannot be held liable for aiding and abetting such a violation." (Id.) "In other words, . . . individuals cannot be held liable under Executive Law §296(6) for aiding and abetting their own violations of the Human Rights Law." (Id. [emphasis added].) It is arguable whether the latter proposition, which appears to be dictum, necessarily follows from the former.

Assuming that the Third Department in Strauss properly characterizes the Second Department's decision in Trovato as declining to follow Tomka, the court in Strauss ignores the Second Department's later decision in Murphy v ERA United Realty (251 AD2d 469 [2d Dept 1998]), which reads Trovato differently, and specifically relies on Tomka in upholding an alleged aiding and abetting cause of action (see id. at 472-73.) Interestingly, Murphy was a hostile environment case. The court held, "It is the employer's participation in the discriminatory practice which serves as the predicate for the imposition of liability on others for aiding and abetting" (see id. at 472.) Unlike [*6]Trovato, Murphy was "based upon allegations of wrongful conduct by the owner-employer which the coemployees aided and abetted"; there was alleged "no single incident of sexual harassment in the workplace," but rather "a pervasive and repugnant course of conduct by three individuals against the plaintiff, one of whom was in a position of power." (See id. at 473.)

It seems clear that the question as to aiding-and-abetting liability under the State Human Rights Act cannot be resolved by talismanic recitation of a "rule" that "individuals cannot be held liable . . . for aiding and abetting their own violations" (see Strauss v New York State Dept. of Educ., 26 AD3d at 73.) The question appears easily resolved where the individual employee can be held directly liable for a violation as a person with sufficient authority for personnel decisions (see Matter of New York State Div. of Human Rights v ABS Elecs., Inc., 102 AD3d 967, 969 [2d Dept 2013].) Similarly, where a coemployee participates with other coemployees in the unlawful discriminatory practice(s), the participants cannot be said to be "aiding and abetting their own violations."

The more difficult cases will be those in which the charged coemployee could not be held directly liable for an unlawful discriminatory practice, there is no participation in the practice by

another coemployee, and the employer's liability is dependent upon a finding that the employer "knew or should have known of the improper conduct of [the coemployee], and encouraged, approved, or condoned the improper conduct by failing to take remedial action" (see Matter of New York State Div. of Human Rights v ABS Elecs., Inc., 103 AD3d at 969.) Particularly in the "corporate" context where there is no "employer coemployee," charting the course between limited direct liability and appropriate aiding-and-abetting liability is likely to be fact-intensive as to the nature of intra-corporate relationships, and to depend upon judgments about their significance. (See Poolt v Brooks, 38 Misc 3d 1216 [A], 2013 NY Slip Op 50116 [U] [Sup Ct, NY County 2013] [discussing perceived differences between 1st and 2nd Dept. decisions].)

As to the City Human Rights Law, which is the only alleged basis for liability in this case, State trial-level courts and federal courts have considered the question under the City Law by application of the same standards under the State Law, at most noting that the language of the aiding-and-abetting provision is the same in both. (See , for example, Krause v Lancer & Loader Group, LLC, 40 Misc 3d 385, 398-99 [Sup Ct, NY County 2013]; Poolt v Brooks, 2013 NY Slip Op 50116 [U]; Valentin v Staten Island Univ. Hosp., 2011 NY Slip Op 33343 [U] [Sup Ct, Richmond County 2011]; Caravantes v 53rd St. Partners, LLC, 2012 U.S. Dist. LEXIS 120182, * 61- * 62 [SDNY 2012]; Malena v Victoria's Secret Direct, LLC, 886 F Supp 2d 349, 367 [SDNY 2012].)

"The City HRL . . . affords protections greater than the State HRL," (Romanello v Intesa Sanpaolo, S.p.A., 22 NY3d 881, 884-85 [2013].) "Accordingly, . . . the provisions of the City HRL should be construed broadly in favor of discrimination plaintiffs to the extent that such a construction is reasonably possible'." (Id. at 885 [quoting Albunio v City of New York, 16 NY3d 472, 477-78 (2011)]; see also Zakrzewska v The New School, 14 NY3d 469, 481 [2010].)

Specifically as to direct individual liability under the two Laws, "[i]n contrast to Executive Law §296(1)(a), which in defining those who may be held liable for unlawful discriminatory [*7]practices speaks of an employer' without mention of employees and agents, Administrative Code §8-107(1)(a) expressly provides that it is unlawful for an employer or an employee or an agent thereof' to engage in discriminatory employment practices." (Murphy v ERA United Realty, 251 AD2d at 471 [emphasis added in original].) "Thus, the [City Human Rights Law] provides for individual liability of an employee regardless of ownership or decisionmaking power." (Malena v Victoria's Secret Direct, LLC, 886 F Supp2d at 366 [internal quotation marks and citations omitted]; see also De Francesco v Metro North R.R., 2012 NY Slip Op 31626 [U] [Sup Ct, NY County 2012], aff'd 2013 NY Slip Op 8128 [1st Dept 2013] ["The question of whether individual defendants who work in a supervisory capacity can be held liable under the various discrimination statutes is complicated and the law is sometimes conflicting, largely depending on which law the claim is made under."].)

Even though, as described above, aiding-and-abetting liability under the State Human Rights Law has been limited in order to avoid undermining the limited direct individual liability under that Law (see Trovato v Air Express Intl., 238 AD2d at 334), courts apply the same standards to aiding-and-abetting liability under the City Human Rights Law, without considering the effect of the broader direct individual liability under the City Law.

It may be that the more difficult questions as to aiding-and-abetting liability under the City Human Rights Law simply disappear because of the direct liability of the coemployee. (See Hahn v Cong. Mechina Mikdash Meleck, Inc., 2013 NY Slip Op 31517 [U] [Sup Ct, Kings County 2013].)

Indeed, it appears that direct liability and aiding-and-abetting liability are coextensive as to damages, at least for the same discriminatory practice. (See New York State Div. of Human Rights v Nancy Potenza Design & Building Servcs., Inc., 87 AD3d 1365 [4th Dept 2011].)

In any event, appropriate sensitivity to avoidance of undermining the legislative intent and purpose would necessarily be less in considering aiding-and-abetting liability under the City Law. The Court does not agree with Plaintiff, however, that "[u]nder the [City Human Rights Law], the only basis for dismissing a claim for aiding and abetting is if there is no finding against the employer entirely" (see Memorandum of Law in Opposition to Defendant Jay Perez's Motion to Dismiss Plaintiff's Complaint at 10.)

Returning, now, to the allegations of Plaintiff's complaint, in addition to the standards generally applicable to a motion to dismiss for failure to state a cause of action, stated above, "employment discrimination cases are themselves generally reviewed under notice pleading standards," such that "a plaintiff alleging employment discrimination need not plead specific facts establishing a prima facie case of discrimination, but need only give fair notice of the nature of the claim and its grounds." (See Vig v New York Hairspray Co., L.P., 67 AD3d 140, 145 [1st Dept 2009] [internal quotation marks, brackets, and citations omitted].) Although this relaxed pleading standard is most often applied to the viability of a claim as a cause of action, it has been applied as well to allegations as to the persons who are liable. (See Artis v Services Post Solutions, Inc., 2011 NY Slip Op 21464, 936 NYS2d 479, 484 [Sup Ct, NY County 2011].) [*8]

As described above, Plaintiff alleges that defendant Perez was the Bank's "Branch Manager and Plaintiff's supervisor"; (see Verified Complaint ¶ 4); and that "Defendants terminated Plaintiff's employment" (see id. ¶ 9.) Plaintiff does not allege that defendant Perez is directly liable under City Human Rights §8-107(1)(a), but only that, under §8-107(6), he is liable for aiding and abetting the "discriminatory employment practices suffered by Plaintiff" (see id. ¶ 21.) Even applying the standards for aiding-and-abetting liability under the State Human Rights Law (which, again, is not alleged), the minimal allegations as to defendant Perez's status with the Bank do not include allegations of fact that would allow a determination that Defendant had sufficient authority to hire and fire so as to be subject to the limited direct liability under the State Human Rights Law. Similarly, the complaint includes no allegations as to the participants in Plaintiff's termination, which may or may not have included coemployees in addition to Defendant, and, if there were others, the manner in which the determination to terminate Plaintiff was made or the respective roles of Defendant and of any coemployee other than Defendant.

Again, Defendant points out the lack of allegations of specific facts, but does not cite any authority that they are necessary to a viable pleading, nor has the Court seen any. The allegations that do appear in the complaint do not suggest other facts that would preclude defendant Perez's liability, even under the standards for aiding-and-abetting liability under the State Human Rights Law.

Particularly in light of the relaxed pleading requirements in employment discrimination cases, Plaintiff's allegations are sufficient to withstand this motion to dismiss. Defendant may well test the legal and factual bases for his liability after appropriate discovery with a motion for summary judgment.

Defendant's motion is denied. Defendant shall serve his answer to the complaint no later than January 17, 2014.

The Court is mailing a copy of this Decision and Order to the parties this date.

December 20, 2013___________________

Jack M. Battaglia

Justice, Supreme Court