Shultz v. Congregation Shearith Isr. of N.Y.

• Decision Date: 10 August 2017
• Docket Number: August Term, 2016,Docket No. 16-3140-cv
• Citation: 867 F.3d 298
• Parties: Alana SHULTZ, Plaintiff-Appellant, v. CONGREGATION SHEARITH ISRAEL OF the CITY OF NEW YORK, The Spanish and Portugese Synagogue, Meir Soloveichik, In his personal and professional capacities, Michael Lustig, In his personal and professional capacities, Barbara Reiss, In her personal and professional capacities, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

867 F.3d 298

Alana SHULTZ, Plaintiff-Appellant,
v.
CONGREGATION SHEARITH ISRAEL OF the CITY OF NEW YORK, The Spanish and Portugese Synagogue, Meir Soloveichik, In his personal and professional capacities, Michael Lustig, In his personal and professional capacities, Barbara Reiss, In her personal and professional capacities, Defendants-Appellees.

Docket No. 16-3140-cv
August Term, 2016

United States Court of Appeals, Second Circuit.

Argued: June 1, 2017
Decided: August 10, 2017

867 F.3d 301

Jeanne Christensen (Bryan L. Arbeit, on the brief), Wigdor LLP, New York, NY, for Plaintiff-Appellant.

Vincent M. Avery (Sarir Z. Silver, on the brief), Akerman LLP, New York, NY, for Defendants-Appellees.

Before: Cabranes and Lynch, Circuit Judges, and Matsumoto, District Judge.^*

Gerard E. Lynch, Circuit Judge:

Plaintiff-appellant Alana Shultz appeals from a judgment of the United States District Court for the Southern District of New York (J. Paul Oetken, Judge ), dismissing her federal claims for sex discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), and interference with her rights under the Family and Medical Leave Act ("FMLA") for failure to state a claim, and declining to exercise supplemental jurisdiction over her various claims under New York State and New York City law. The principal issue on appeal is whether a cause of action under Title VII can be based on notice to an employee of a termination of employment effective in approximately three weeks, that was revoked before it became effective. Because Supreme Court precedent compels the conclusion that it can, the judgment of the district

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court is VACATED in part and REMANDED for further proceedings consistent with this opinion. We AFFIRM the judgment in various other respects.

BACKGROUND

I. Factual Background

Because "a [court] ruling on a defendant's motion to dismiss a complaint must accept as true all of the factual allegations contained in the complaint," Bell Atl. Corp. v. Twombly , 550 U.S. 544, 572, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks omitted), we describe the facts as alleged in the complaint, drawing all inferences in the plaintiff's favor, Littlejohn v. City of New York , 795 F.3d 297, 306 (2d Cir. 2015), and construing any ambiguities "in the light most favorable to upholding plaintiff's claim," Doe v. Columbia Univ. , 831 F.3d 46, 48 (2d Cir. 2016).

From 2004 to 2015, Shultz worked as the Program Director of Congregation Shearith Israel of the City of New York, the Spanish and Portuguese Synagogue (the "Congregation"), a Jewish synagogue in New York City. Her position involved "planning and coordinating events" and assisting with the nursery school program. App'x at 31. On June 28, 2015, Shultz, who was pregnant at the time, was married. Prior to departing on her honeymoon, she informed Barbara Reiss, the Congregation's Executive Director, that she was pregnant, and asked that Reiss convey that information to the Congregation's rabbis.

Shultz returned from her honeymoon, visibly pregnant, on July 20, 2015. The next day, Reiss engaged Shultz in an extensive discussion about the pregnancy. Later that day, Reiss asked Shultz to meet with her, Meir Soloveichik, one of the Congregation's rabbis, and Michael Lustig, a member of its Board of Trustees. At that meeting, Reiss informed Shultz that her employment was terminated, effective August 14, 2015. Reiss explained that, due to the departure of one of the Congregation's rabbis, Shultz's position was being eliminated as part of a restructuring. Shultz had never before heard of any planned restructuring of the Congregation's staff, and no further details about the restructuring were provided at that meeting. Shultz told Reiss, Soloveichik and Lustig that her pregnancy would make it "extremely difficult, if not impossible, to obtain a new job." App'x at 36. Her statement was "met with complete silence"; indeed, Soloveichik and Lustig "refused to speak to Ms. Shultz" at all, and Soloveichik "refused to look at, speak to or acknowledge [her] in any way" during the meeting. App'x at 35-36.

At the meeting, Reiss presented Shultz with a severance agreement, offering her six weeks of pay in exchange for a "a complete waiver of [her] right to commence an action for pregnancy or gender discrimination or a claim pursuant to the FMLA," but Shultz refused to sign it. App'x at 37. Believing that the restructuring was "a pretextual excuse to terminate her because [Reiss, Soloveichik, and Lustig] disapproved of the fact that she was pregnant at the time of her marriage," Shultz retained counsel. App'x at 37. Shultz continued to work at the Congregation, to complete various tasks, and help to transfer her responsibilities to other employees.

On July 30, 2015, Shultz's lawyer informed the Congregation's counsel that Shultz had retained counsel to pursue claims stemming from her termination. A few days later, on August 5, 2015, Reiss presented Shultz with a letter stating that the Congregation had "reinstated" the position of Program Director, and thus she

867 F.3d 303

would not be terminated on August 14, 2015. Shultz contends that this letter was "not a bona fide offer of unconditional reinstatement." App'x at 38. After the rescission letter was received Shultz was subject to a "pattern and practice of repeat discrimination" by Reiss, Soloveichik, and Lustig, consisting of at least the following events: (1) speaking loudly enough to be overheard by Shultz, Reiss told Lustig in a telephone conversation that the Congregation "had a right" to disapprove of Shultz's pre-marital pregnancy and disparaged Shultz and her lawyers; (2) Shultz's name was removed from the Congregation's newsletters to the membership and from the employee list that was displayed on a wall outside the synagogue; (3) Reiss continued to demand that she complete her assigned tasks before the date of her previously scheduled termination, and to transition her responsibilities to other employees; and (4) Soloveichik and Lustig refused to speak with her. Id. at 38-40.

Shultz did not return to work after August 14, 2015, the date that she had originally been told that her position would be terminated. Nonetheless, the Congregation continued to issue paychecks to Shultz (which she did not deposit) and listed her in publications as the Program Director. This action was commenced on September 22, 2015, and the Congregation emailed its membership on September 25, 2015 stating:

Congregation Shearith Israel categorically denies Ms. Shultz's allegations of discrimination or of doing anything wrong. In addition, Congregation Shearith Israel did not terminate her employment. She continues to remain employed in the exact same title, receiving the exact same compensation and benefits that she had been receiving all along. Her claim of loss is fabricated and inaccurate. She has received (and continues to receive to this very day) every penny, including for health benefits—even though she has not been to work since August 14th. It is unfortunate that Ms. Shultz and her lawyers took advantage of the Synagogue's inability to respond to press inquiries in the hours before Yom Kippur.

App'x at 41.

II. Procedural History

Shultz brought this action against the Congregation, Reiss, Soloveichik, and Lustig (collectively, "Defendants"), asserting that Defendants (1) discriminated against her on the basis of her sex, and retaliated against her for taking action against such discrimination, in violation of Title VII and parallel provisions of New York State law and New York City law; (2) interfered with her exercise of rights under the FMLA; and (3) defamed her in violation of New York state law. Defendants moved to dismiss each claim under Federal Rule of Civil Procedure 12(b)(6). In an Opinion and Order dated August 15, 2016, the district court granted that motion, dismissing Plaintiff's federal claims for failure to state a claim and declining to exercise supplemental jurisdiction over her claims under state and city law. This appeal followed.

DISCUSSION

We "review[ ] de novo a district court's grant of a motion under Rule 12(b)(6) to dismiss a complaint for failure to state a claim upon which relief can be granted." Doe , 831 F.3d at 53 (internal quotation marks omitted).

I. Discriminatory Termination

Shultz's principal claim is that the notice of termination she received was itself an adverse employment action, despite its later revocation. We agree.

867 F.3d 304

Title VII makes it unlawful for an employer to discriminate on the basis of sex with regard to the "terms, conditions, or privileges of employment" and prohibits an employer from depriving "any individual of employment opportunities or otherwise adversely affect[ing] his status as an employee" on the basis of sex. 42 U.S.C. § 2000e-2(a)(1)-(2). "Title VII's prohibition against sex discrimination applies to discrimination based on pregnancy." Young v. United Parcel...