Doe v. Bloomberg, L.P.

• Citation: 178 A.D.3d 44,109 N.Y.S.3d 254
• Decision Date: 24 September 2019
• Docket Number: 9405,Index 28254/16E,9404,9406
• Parties: Margaret DOE, Plaintiff–Respondent, v. BLOOMBERG, L.P., et al., Defendants, Michael Bloomberg, Defendant–Appellant.
• Court: New York Supreme Court Appellate Division

178 A.D.3d 44

109 N.Y.S.3d 254

Margaret DOE, Plaintiff–Respondent,

v. BLOOMBERG, L.P., et al., Defendants, Michael Bloomberg, Defendant–Appellant.

9404

9405

9406

Index 28254/16E

Supreme Court, Appellate Division, First Department, New York.

ENTERED: SEPTEMBER 24, 2019

Proskauer Rose LLP, New York (Elise M. Bloom and Rachel S. Philion of counsel), for appellant.

The Clancy Law Firm, P.C., New York (Niall MacGiollabhui of counsel), for respondent.

Dianne T. Renwick, J.P., Sallie Manzanet–Daniels, Marcy L. Kahn, Cynthia S. Kern, Peter H. Moulton, JJ.

KERN, J.

On this appeal, we are asked to determine when an individual owner or officer of a corporate employer may be held strictly liable as an employer under the New York City Human Rights Law (City HRL)(Administrative Code of City of N.Y. § 8–107[13][b] ). We find that an individual owner or officer of a corporate employer may be held strictly liable as an employer under the City HRL, in addition to the corporate employer, only if the plaintiff sufficiently alleges that the individual encouraged, condoned or approved the specific discriminatory conduct giving rise to the claim. As the plaintiff in this case failed to allege that individual defendant Michael Bloomberg encouraged, condoned or approved the specific discriminatory conduct she alleges in the complaint, we find that the complaint should be dismissed as against Mr. Bloomberg in its entirety.

The allegations in the complaint are as follows. In September 2012, plaintiff began working in the marketing department at defendant Bloomberg L.P. as a temporary employee selling subscription services to various newsletters. At that time, she was a 22–year–old recent college graduate and had never before held a professional job. Defendant Nicholas Ferris was the Global Business Director of the Bloomberg Brief Newsletter Division and was plaintiff's direct supervisor.

Mr. Ferris allegedly began making unwanted advances toward plaintiff a few weeks into her employment at Bloomberg L.P. In or around January 2013, Mr. Ferris inappropriately touched plaintiff during a Bloomberg L.P. radio event. Mr. Ferris continued to regularly send plaintiff inappropriate and offensive emails and "Instant Bloomberg" (IB) messages throughout 2013. He invited plaintiff to lunches and "quick drinks" during and after work, which plaintiff often attended. Plaintiff alleges that she was concerned Mr. Ferris would retaliate if she rejected his advances as he held the decision-making authority to hire her as a permanent employee. Mr. Ferris allegedly raped plaintiff on two occasions, once in February 2013 and once in March 2013, while she was intoxicated. Plaintiff states that Mr. Ferris caused her to become dependent on drugs that he hid in various locations throughout the Bloomberg L.P. office.

Plaintiff alleges that she did not report Mr. Ferris's conduct to Bloomberg L.P.'s Human Resources Department because she thought the complaint would be ignored or trivialized and would subject her to retaliation. Although plaintiff requested that the HR Department move her desk away from Mr. Ferris's desk, she did not state the basis for her request.

Plaintiff alleges that by October 2015, her mental and physical health had deteriorated and she was placed on indefinite medical leave for major depressive disorder

and anxiety disorder. In or around December 2015, Bloomberg L.P. terminated Mr. Ferris.

With respect to Mr. Bloomberg, the allegations in the complaint are as follows. Following Mr. Bloomberg's example and leadership, Bloomberg L.P. bred a hostile work environment that led to the type of discrimination plaintiff experienced. Mr. Bloomberg was sued in a class action brought by female employees who alleged sexual harassment and creation of a hostile work environment while he was CEO of Bloomberg L.P. Mr. Bloomberg was also accused of condoning systemic top-down discrimination against female employees in a sexual harassment suit brought by the U.S. Equal Employment Opportunity Commission on behalf of 58 female employees, not including the plaintiff. The complaint also cites various magazine articles and statements by public figures describing unsavory conduct and comments made by Mr. Bloomberg, directed at or regarding women other than plaintiff.

Plaintiff commenced this action against Bloomberg L.P., Mr. Bloomberg and Mr. Ferris. In a decision dated December 5, 2017, the motion court granted a motion by Mr. Bloomberg to dismiss the complaint against him in its entirety. However, upon reargument by the plaintiff, the motion court held that plaintiff sufficiently stated claims against Mr. Bloomberg as an employer under the City HRL.¹

We now reverse and find that the complaint should be dismissed as against Mr. Bloomberg in its entirety. On a motion to dismiss pursuant to CPLR 3211(a)(7), "[w]e accept the facts as alleged in the complaint as true, accord plaintiff[ ] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" ( Leon v. Martinez , 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] ). "However, factual allegations that do not state a viable cause of action, that consist of bare legal conclusions ... are not entitled to such consideration" ( Skillgames, LLC v. Brody , 1 A.D.3d 247, 250, 767 N.Y.S.2d 418 [1st Dept. 2003] ).

The City HRL imposes strict liability on an "employer" for the discriminatory acts of the employer's managers and supervisors (see Administrative Code of the City of New York § 8–107[13][b][1]; Zakrzewska v. New School , 14 N.Y.3d 469, 480–481, 902 N.Y.S.2d 838, 928 N.E.2d 1035 [2010] ).² Specifically, Administrative Code § 8–107(13)(b) provides:

"An employer shall be liable for an unlawful discriminatory practice based upon the conduct of an employee or agent which is in violation of subdivision 1 or 2 of this section only where:

(1) The employee or agent exercised managerial or supervisory responsibility ...."

However, the statute does not provide a definition of "employer" and the legislature has not provided guidance as to how "employer" should be defined under the statute. The legislature has also not provided guidance as to when an individual, in addition to the corporate employer, may be held strictly liable under the statute.

The Court of Appeals has held that section 8–107(13)(b)(1) of the Administrative Code holds corporate employers strictly liable for the discriminatory acts of their managers and supervisors (see Zakrzewska , 14 N.Y.3d at 469, 902 N.Y.S.2d 838, 928 N.E.2d 1035 ). Additionally, pursuant to the plain language of the statute, where the only employer is an individual and there is no corporate employer, the individual may be held strictly liable for the discriminatory acts of his or her managers and supervisors as such individual is the only possible employer under the statute. However, the Court of Appeals has never addressed the issue of when an individual, in addition to the corporate employer, may be held strictly liable under section 8–107(13)(b)(1) of the Administrative Code.

Based on a review of the cases that have addressed the issue, we find that in order to hold an individual owner or officer of a corporate employer, in addition to the separately charged corporate employer, strictly liable under section 8–107(13)(b)(1) of the Administrative Code, a plaintiff must allege that the individual has an ownership interest or has the power to do more than carry out personnel decisions made by others and must allege that the individual encouraged, condoned or approved the specific conduct which gave rise to the claim.³

This Court has twice explicitly addressed the issue of when an individual may be held strictly liable, in addition to the corporate employer, under section 8–107(13)(b)(1) of the Administrative Code, and held that an individual will be held strictly liable under the statute if he or she encouraged, condoned or approved the specific discriminatory behavior alleged in the complaint. In Boyce v. Gumley–Haft, Inc., 82 A.D.3d 491, 492, 918 N.Y.S.2d 111 [1st Dept. 2011], this Court denied summary judgment to the individual owner of the corporate employer under section 8–107(13)(b)(1) of the Administrative Code because there were issues of fact as to whether he "encouraged, condoned or approved" the specific discriminatory conduct alleged by the plaintiff ( 82 A.D.3d at 492, 918 N.Y.S.2d 111 ). This Court reiterated this standard in McRedmond v. Sutton Place Rest. & Bar, Inc., 95 A.D.3d 671, 673, 945 N.Y.S.2d 35 [1st Dept. 2012], a case in which we denied summary judgment to the individual officers of the corporate employer under section 8–107(13)(b)(1) of the Administrative Code because there were issues of fact as to whether they condoned or participated in the discriminatory conduct complained of by the plaintiff.

All of the federal cases cited by the parties which have addressed the specific issue before us now have also held that an individual will only be held strictly liable under section 8–107(13)(b)(1) of the Administrative Code if he or she participated, in some way, in the specific discriminatory conduct alleged in the complaint (see Marchuk v. Faruqi & Faruqi, LLP , 100 F. Supp. 3d 302, 309 [S.D. N.Y.2015] [a plaintiff must establish "at least some minimal culpability on the part of (the company's individual shareholders)" in order to hold them liable as employers under the City HRL]; Zach v. East Coast Restoration & Constr. Consulting Corp. , 2015 WL 5916687, *1, 2015 U.S. Dist LEXIS 138334 *1 [S.D. N.Y.2015] [denying plaintiff's motion to add the president of the corporate employer as an individual defendant under the City HRL because the proposed amended complaint failed to "allege any knowledge, participation, or involvement whatsoever" in the discriminatory conduct detailed in the complaint]; Burhans v. Lopez , 24 F. Supp. 3d 375, 385 [S.D. N.Y.2014] [allowing plaintiffs' claims to...