On May 6, 2010, the New York Court of Appeals ruled in Zakrzewska v. The New School,—N.Y.2d—, 2010 WL 1791091, that an employer defense that exists under federal and state anti-discrimination law is not available for claims brought under the New York City Human Rights Law (City HRL). Zakrzewska and other recent decisions have dramatically changed the landscape for claims of discriminatory workplace harassment for companies with New York City operations – a development that certainly will be of interest in other jurisdictions as well.

The Faragher/Ellerth Defense

More than a decade ago, the United States Supreme Court created what is commonly called the Faragher/Ellerth defense to discrimination claims alleging a hostile work environment. Under this doctrine, an employer can avoid liability for supervisor conduct that creates a hostile work environment by proving that: (1) the employer used reasonable care to avoid and promptly correct any harassing conduct; and (2) the plaintiff-employee unreasonably failed to avoid harm by, for example, availing himself or herself of the employer’s preventive or corrective measures.

In recent years, employers have used the Faragher/Ellerth defense effectively to avoid trial and obtain dismissal of discriminatory harassment claims even where there was substantial evidence that harassment had occurred. This option no longer exists for claims brought under the City HRL. Without the Faragher/Ellerth defense, employers become automatically liable for the harassing conduct of supervisors.

Zakrzewska Background

In Zakrzewska, a former student who worked part-time in The New School’s print shop sued the school and her supervisor under the City HRL alleging sexual harassment and retaliation. The school argued that it should not be held liable for the alleged harassment because, consistent with the Faragher/Ellerth defense, it had maintained an anti-harassment policy and a complaint mechanism, and the plaintiff had delayed in complaining. When the plaintiff eventually did complain, the school investigated her claims and took reasonable measures to remedy the situation. The district court found that the school satisfied the elements of the defense, but the plaintiff promptly argued that the Faragher/Ellerth defense did not apply to her claim brought under the City HRL.

While acknowledging that its “conclusion is not free from doubt,” the district court ultimately ruled that the judge-made Faragher/Ellerth defense was inconsistent with the plain language of the City HRL, which the court said creates strict vicarious liability for the acts of supervisory employees.

Deciding a certified question proposed to it by the federal appellate court, the New York Court of Appeals agreed that the Faragher/Ellerth defense does not apply to City HRL claims. The court was persuaded by the plain language of the statute, as well as the legislative history, which explicitly stated that the City HRL imposes “[s]trict liability in the employment context for acts of managers and supervisors.” The court also noted that while “an employer’s anti-discrimination policies and procedures may be considered ‘in mitigation of the amount of civil penalties or punitive damages,’” they are not a defense to liability for compensatory damages and attorneys’ fees.

Reflection of a Trend

The Court of Appeal’s ruling in Zakrzewska is the latest in a series of state court decisions expanding the scope of employer liability under the City HRL. Just last year, in Williams v. New York City Housing Authority, an intermediate appellate court declared that “the City HRL now explicitly requires an independent liberal construction analysis in all circumstances, even where state and federal civil rights laws have comparable language.” Applying that “independent liberal construction,” the Williams court rejected a long-established, judge-made limitation on Title VII liability that requires workplace harassment to be so “severe or pervasive” as to alter the terms and conditions of employment in order for there to be actionable discrimination. In contrast, under the Williams interpretation of the City HRL, harassment does not have to be “severe or pervasive” for the plaintiff to prevail, but rather questions of “severity” and “pervasiveness” are applicable only in considering the amount of damages. While some judges have called into question this lower standard of liability, others accept it as the law of New York.

Another recent New York State appellate court decision further expanded the reach of both the City and State HRL by holding that “an out-of-jurisdiction plaintiff” is permitted to assert “claims under the [New York human rights laws] when the New York employer is alleged to have made its employment decisions in a discriminatory manner here.” Conceivably, therefore, an employee who regularly works outside New York City could bring a claim for harassment under the City HRL if a management official headquartered in New York City knew of the offending conduct but failed to act.

Practical Considerations for Employers

In light of these judicial developments, it will be more difficult for New York City employers to defend claims of discriminatory harassment. Also, claims that under federal and state law might have been dismissed on summary judgment may now have to be tried if brought under the City HRL.

There are, nonetheless, practical steps to be taken that might limit damages or help avoid liability.

Even though the maintenance of anti-harassment policies and procedures will not prevent liability for a supervisor’s conduct, their existence still could avoid or lessen punitive damages – and, for some co-worker harassment, avoid liability under express provisions of the City HRL. More importantly, the employer’s duty of “reasonable care to avoid and promptly correct harassing conduct” reported to it that exists under federal and state anti-discrimination law is replaced under city law by the obligation to have in place procedures “for the prevention and detection of unlawful discriminatory practices.” Strong policies, combined with serious and frequent anti-harassment training for managerial and supervisory employees, could create a workplace culture that does not allow discriminatory ridicule or intimidation to occur.

These policies will be helpful, too, if an employee bases a claim on events that were not reported or that occurred much earlier than first reported. Although this is no longer a complete defense to liability, the absence of prompt reporting when the employee’s obligation to do so was widely disseminated can be used as evidence to a jury that the conduct did not actually occur or that it was not experienced as offensive at the time – two defenses that are still available under the City HRL.

Lastly, even under the lower Williams standard, conduct that amounts to nothing more than petty slights or trivial inconvenience is not enough to constitute unlawful discriminatory harassment. Now more than ever, companies subject to New York City law must take prompt and effective steps at the first indication of an incipient harassment so that the offending behavior can be stopped before it develops into an actionable claim. Rigorous training of human resources managers in proper investigation techniques is indispensable to achieving that end.