Father Belle Community Center v. New York State Div. of Human Rights on Complaint of King

• Decision Date: 19 April 1996
• Citation: 642 N.Y.S.2d 739,221 A.D.2d 44
• Parties: Matter of FATHER BELLE COMMUNITY CENTER and Board of Directors, Respondents, v. NEW YORK STATE DIVISION OF HUMAN RIGHTS ON the COMPLAINT OF Deborah A. KING, Deborah Horvatits and Elizabeth A. Hurd, Petitioners.
• Court: New York Supreme Court — Appellate Division

Page 739

642 N.Y.S.2d 739

221 A.D.2d 44

Matter of FATHER BELLE COMMUNITY CENTER and Board of

Directors, Respondents, v. NEW YORK STATE DIVISION OF HUMAN RIGHTS ON the COMPLAINT OF

Deborah A. KING, Deborah Horvatits and Elizabeth

A. Hurd, Petitioners.

Supreme Court, Appellate Division,

Fourth Department.

April 19, 1996.

David J. Seeger, Buffalo, for petitioners.

Deborah A. King, Cheektowaga, pro se.

Elizabeth Hurd, Buffalo, pro se.

Deborah Horvatits, Elma, pro se.

Lawrence Kunin, General Counsel, State Division of Human Rights by Michael Swirsky, New York City, for respondent--State Division of Human Rights.

Before DENMAN, P.J., and LAWTON, WESLEY, BALIO and DAVIS, JJ.

DENMAN, Presiding Justice:

In this CPLR article 78 proceeding, we are asked to consider, among other issues, whether New York's rule against imposing vicarious liability in discrimination cases precludes imposition of liability on a corporate employer for acts of sexual harassment perpetrated by its highest managerial employee. We conclude that it does not.

This proceeding arises out of five human rights complaints that culminated in a determination by the Commissioner of the New York State Division of Human Rights (SDHR) finding the Father Belle Community Center (Center) liable for sexual harassment of the three complainants based on the conduct of the Center's Executive Director, Vito Caruso, and based on the actions of the Center's Board of Directors in its handling of the complaints and in its constructive termination or retaliatory discharge of the three complainants. SDHR awarded each of the complainants $60,000 in damages for mental anguish and humiliation, and awarded two of the complainants back pay in the amounts of $504 and $665.60, respectively.

SDHR filed a petition pursuant to Executive Law § 298 seeking an order of enforcement of its determination. SDHR's petition brings up for review the merits of the Commissioner's determination (see, Executive Law § 298; Matter of State Div. of Human Rights v. Bystricky, 30 N.Y.2d 322, 326, 333 N.Y.S.2d 398, 284 N.E.2d 560), thus requiring us to decide whether the Center may be held directly liable for its Executive Director's sexual harassment of the complainants or for the Board's acts of condonation and retaliatory discharge. We must further decide whether the three awards for mental anguish and humiliation are excessive under the circumstances.

I

The Center is a not-for-profit corporation that provides social, educational, and recreational opportunities at its facilities in Buffalo. It receives nearly all of its funding from Federal, State, and local government, much of it through block grants administered by the City of Buffalo. The Center does not now dispute that Vito Caruso, its Executive Director, subjected the three complainants to constant sexual harassment throughout their employment. Deborah King was employed at the Center briefly in 1982 and from December 1984 until she was fired in October 1987. Elizabeth Hurd worked at the Center from July 1983 until she resigned under duress in September 1987. Deborah Horvatits worked at the Center from June 1986 until her termination in October 1987. All three women worked under the direct supervision of Caruso, the Center's highest ranking employee, who exercised considerable authority in hiring and firing and plenary authority in determining pay, assignments, and other working conditions, subject only to oversight by the Board of Directors. All three women gave testimony, much of it corroborated by one another and by other witnesses, that Caruso subjected them to a similar pattern of inappropriate and demeaning communication, unwelcome sexual overtures, unwanted physical contact, and express and implied threats to fire them or make their jobs more difficult or unpleasant if they did not submit to his advances. Caruso repeatedly begged each of the complainants to be his "girlfriend" or "mistress", and to marry or "sleep" with him. Caruso consistently demanded that the women attend nonwork-related lunches and go on boat rides with him during business hours. On such occasions, Caruso typically would become intoxicated and would become more persistent in his romantic pursuits, frequently hugging and kissing the women and making sexually suggestive remarks. If the complainants refused his invitations to have lunch or to go on his boat, Caruso would become angry, refuse to approve their work, and threaten to fire or demote them. On several occasions, Caruso asked a complainant to share a hotel room with him on a business trip.

Each of the complainants periodically received verbal and written notices of termination, and complainant Horvatits' pay and benefits were cut. The firings typically were rescinded by Caruso when the complainants acted contrite and promised to "cooperate" with him. Additionally, Caruso left each of the complainants suggestive or threatening notes, including, on one occasion, a copy of Caruso's pistol permit reproduced under the heading, "You Asked For It." With respect to complainant Hurd, Caruso threatened to "kill" her if she were lying when she denied reporting the harassment. That threat prompted Hurd to resign her position the next day, September 8, 1987. At about the same time, Caruso's conduct became so intolerable to King and Horvatits that they complained to City officials and the Board of Directors. Complainants first disclosed the harassment to Mary Rizzo, a Board member, but initially refrained from taking the matter before the entire Board because it was composed mainly of Caruso's cronies.

Nonetheless, members of the Board of Directors became aware of the allegations of sexual harassment no later than September 14, 1987. The personnel committee of the Board met with the complainants between September 14 and 18 and, between then and late October 1987, the personnel committee and the full Board convened several times to discuss the matter. Several of those meetings included Caruso and City officials who oversaw funding of the Center. The initial response of Caruso to the allegations was to assert that he had done nothing wrong because his treatment of the complainants was no different from his treatment of the rest of the staff. On September 15, in the interim complainant Horvatits received a termination notice. She contacted a City official, who interceded with the Board, which restored Horvatits to her job. Thereafter, King and Horvatits were harassed and intimidated by other employees of the Center, including relatives of Caruso. Eventually, retaliatory complaints of poor performance and insubordination were filed against King and Horvatits.

On October 2, 1987, the Board took up the complaints, but soon terminated its investigation and opted to refer the matter to an arbitrator. The Board placed Caruso on paid leave of absence, but allowed him to report daily for work at the Center. Over the next several weeks, King and Horvatits continued to be harassed and intimidated by other employees. Moreover, they were repeatedly asked to resign. On October 13, 1987, King and Horvatits filed complaints with SDHR, and Hurd filed her complaint one week later. The next day, complainants attended a meeting at the Center at which they were advised that Caruso would be reinstated to his position. The Chairman of the Board asked King and Horvatits why they did not take a leave of absence or quit if they could not get along with Caruso, and informed them that, if it were up to him, they would be fired. On October 23, 1987, King received a letter threatening immediate termination, and Horvatits received a similar letter on October 26. On October 28, through intervention of City officials, King was transferred from the Center's payroll to the City's payroll, but was still employed at the Center. King was terminated by the Board on October 30, 1987 for insubordination and poor performance. That same day, Horvatits was informed by the Board that she was being terminated in an ouster of all City-affiliated workers. Like King, Horvatits was told that she had an hour to leave the premises. Many of the City-affiliated workers were later rehired by the Center, but Horvatits was not among those rehired. King and Horvatits each filed a second complaint alleging retaliatory discharge.

The complaints against the Center and Board were the subject of SDHR hearings that culminated in an order of the Commissioner dated March 12, 1993. The Commissioner found that Caruso had created a hostile work environment and that his conduct constituted quid pro quo harassment both on and off the work premises under circumstances in which Caruso was exercising his authority as chief executive officer for the Center, including his authority to supervise, direct, and oversee the employees and to make decisions with respect to hiring, firing, and conditions of employment. Further, the Commissioner found that the Center was responsible for the actions of Caruso because they had been undertaken within the scope of his authority.

Additionally, the Commissioner found the Center responsible for condonation and retaliation based on the actions or omissions of the Board and supervisory employees in failing to establish policies concerning sexual harassment or mechanisms to pursue sexual harassment grievances in confidence; failing vigorously to investigate the complaints; pressuring the complainants to resign or take leaves of absence; threatening the complainants with termination; failing to protect the complainants from acts of harassment by other employees; failing to reinstate Hurd following her constructive discharge; and ultimately terminating King and Horvatits.

Based on the testimony of the complainants concerning their feelings of stress, powerlessness, fear, anger, nervousness, humiliation, and lack of self worth, together with their testimony concerning the adverse physical effects of such mental distress, the Commissioner...