Why it matters

Answering three certified questions from the U.S. Court of Appeals for the Second Circuit, New York’s highest court ruled that an “employer” can be liable for discrimination in employment on the basis of criminal conviction and that the determination of an employer is based primarily on the power “to order and control” the employee in his or her performance of work. The state’s discrimination law does reach out-of-state employers, however, who “aid or abet” employment discrimination against individuals with a prior criminal conviction, the court added. A pair of moving men sued Allied Van Lines and its parent company, alleging the defendants were liable under a state law banning the denial of employment based on criminal convictions—even though they were not the plaintiffs’ direct employer. When a district court granted the defendants’ motion to dismiss and the plaintiffs appealed, the Second Circuit asked the New York Court of Appeals to clarify issues of state law. In addition to finding that application of the statute is limited to an “employer,” the court elaborated on how to determine who is an employer and recognized that liability can extend to an out-of-state nonemployer who “aids or abets” violations of the statute.

Detailed discussion

Hired in 2008 and 2010, two employees of Astro Moving and Storage Inc. had prior criminal convictions for sexual offenses against young children. Astro later entered a contract with Allied Van Lines to perform moving services that ultimately constituted 70 to 80 percent of Astro’s work. The contract required Astro to adhere to Allied’s guidelines, which included a prohibition on workers who failed the criminal background screen if they had a conviction for a sexual offense.

Astro fired the movers, who filed suit against Astro, Allied and Sirva, Allied’s parent company. The complaint stated violations of the New York State Human Rights Law Sections 296 (15) and (6), which prohibit discrimination against individuals with prior criminal convictions.

A district court granted Allied and Sirva’s motion for summary judgment, holding that the state law applies only to employers, a category that Allied and Sirva did not fit with regard to the plaintiffs, and that neither defendant could be liable for aiding and abetting because neither participated in firing the plaintiffs. The movers appealed and the U.S. Court of Appeals for the Second Circuit certified three questions to New York’s highest court.

The first question asked whether liability under Section 296 (15) of the statute is limited to an aggrieved party’s “employer,” and the court answered in the affirmative. The law states: “It shall be an unlawful discriminatory practice for any person, agency, bureau, corporation or association, including the state and any political subdivision thereof, to deny any license or employment to any individual by reason of his or her having been convicted of one or more criminal offenses … when such denial is in violation of the provision of article twenty-three-A of the correct law.” The court found that when reading the section as a whole—and incorporating Article 23A, which specifies that it applies to applications “at any public or private employer”—proper interpretation limited liability to employers. The legislative history supported this conclusion, the court said, with references strictly to “public agencies and private employers.”

On the second question—how to define the scope of the term “employer” under the Human Rights Act—the majority looked to New York’s lower courts. A 1985 appellate panel decision, State Div. of Human Rights v. GTE Corp., delineated four factors: the selection and engagement of the employee; the payment of salary or wages; the power of dismissal; and the power of control of the employee’s conduct. “[C]ommon-law principles, as discussed in GTE, determine who may be liable as an employer under section 295 (15) of the Human Rights Law, with greatest emphasis placed on the alleged employer’s power ‘to order and control’ the employee in his or her performance of work,” the court wrote.

The third question turned to a separate provision of the statute, Section 296 (6), where the court considered the limits of liability for “aiding and abetting” violations of Section 296 (15). “Section 296 (6) extends liability to persons and entities beyond joint employers, and this provision should be construed broadly,” the court said, to effectuate its purpose of protecting applicants with criminal convictions. “Section 296 (6) also applies to out-of-state defendants.”

Under this interpretation, answering the second and third questions was unnecessary, the dissent said. “[T]he majority’s approach is too limited and excludes certain actors who serve as obstacles to employment opportunities for persons with criminal convictions,” the dissent concluded.

To read the opinion in Godwin v. Sirva, Inc., click here.