Foley v. Mobil Chemical Co.

• Decision Date: 31 May 1996
• Citation: 170 Misc.2d 1,647 N.Y.S.2d 374
• Parties: Ramona L. FOLEY, Plaintiff, v. MOBIL CHEMICAL COMPANY, et al., Defendants.
• Court: New York Supreme Court

Page 374

647 N.Y.S.2d 374

170 Misc.2d 1

Ramona L. FOLEY, Plaintiff, v. MOBIL CHEMICAL COMPANY, et al., Defendants.

Supreme Court, Monroe County.

May 31, 1996.

Steven E. Malone, Victor, for Jose Calle, defendant.

Michael J. Kieffer, Rochester, for Steve Barnett, defendant.

Osborn, Reed, Burke & Tobin, Rochester (Thomas C. Burke, of counsel), for Paul Miller, defendant.

Patterson, Belknap, Webb & Tyler, New York City (Ellen M. Martin, of counsel), for Mobil Chemical Company, defendant.

Merkel & Merkel, Rochester (David A. Merkel, of counsel), for plaintiff.

KENNETH R. FISHER, Justice.

Defendants Calle and Barnett move for summary judgment on plaintiff's State Human Rights Law (SHRL) claim for sexual harassment. They contend that, as employees of defendant Mobil Chemical Company, they are not "employers" within the meaning of N.Y. Executive Law § 296(1)(a), as defined in § 292(5). Defendant Calle was plaintiff's immediate supervisor and is the primary object of her sexual harassment claim. Defendant Barnett was employed in the Employee Relations Department of Mobil's Label Materials Division, and is not a direct object of her claims of harassment. Plaintiff claims that Barnett became aware of Calle's harassment and did nothing to remedy it.

After reading the applicable statute, which provides that "employer[s]" are the proper subject of SHRL claims of discrimination in employment under N.Y. Executive Law § 296(1)(a) ("unlawful discriminatory practice ... [f]or an employer" to engage in the enumerated acts of discrimination) (emphasis supplied), and that "[t]he term 'employer' does not include any employer with fewer than four persons in his employ," N.Y. Executive Law § 292(5), the answer to this question would seem naturally to flow from a plain reading. Neither Calle nor Barnett employed four persons; accordingly, they may not be held liable as "employers" under the statute. Because the Legislature failed expressly to provide for individual employee/supervisor liability, such failure "may be construed as an indication that its exclusion was intended." McKinney's Cons.Laws of N.Y., Book 1, Statutes § 74; Estate of Cowart But the Court of Appeals opined in Patrowich v. Chemical Bank, 63 N.Y.2d 541, 483 N.Y.S.2d 659, 473 N.E.2d 11 (1984) that the statutory definition of an employer "provides no clue to whether individual employees of a corporate employer may be sued under its provisions," id. 63 N.Y.2d at 543, 483 N.Y.S.2d 659, 473 N.E.2d 11, and held "that 'economic reality' governs who may be sued." Id. 63 N.Y.2d at 543, 483 N.Y.S.2d 659, 473 N.E.2d 11. The court elaborated this "economic reality" test only by reference to (A) whether the individual employee in question is "shown to have any ownership interest or power to do more than carry out personnel decisions made by others," id. 63 N.Y.2d at 542, 543-44, 483 N.Y.S.2d 659, 473 N.E.2d 11, and by reference (B) to the holdings of a number of federal cases that it approved or disapproved. Id. 63 N.Y.2d at 544, 483 N.Y.S.2d 659, 473 N.E.2d 11 (collecting cases).

v. Nicklos Drilling Company, 505 U.S. 469, 475, 112 S.Ct. 2589, 2594, 120 L.Ed.2d 379 (1992) ("In a statutory construction case, the beginning point must be the language of the statute, and when a statute speaks with clarity to an issue judicial inquiry into the statute's meaning, in all but the most extraordinary circumstance, is finished."); Matter of Board of Higher Education of the City of New York v. Carter, 14 N.Y.2d 138, 147, 250 N.Y.S.2d 33, 199 N.E.2d 141 (1964) (applying the ordinary dictionary definition of the term "employer" under the SHRL).

No subsequent explication of this economic reality standard has been attempted by the Court of Appeals, and the available cases do not provide a reliable measure of the ownership/power criterion or the "power to do more than carry out personnel decisions made by others" test. For example, it was not revealed in Patrowich whether the vice president sought to be held liable held any stock in Chemical Bank, or whether stock ownership at any identified level might satisfy the generic "economic interest" test or the more particular ownership/power test. Similarly, the court did not give guidance on what "more" power or authority in the corporate scheme was required to satisfy the control/power test than the simple power to carry out personnel decisions made by others that the court found insufficient to trigger individual liability. Nor did the court identify how the control or power aspect of its analysis was a more particularized version of the "economic reality" test.

Patrowich thus may properly be read as providing examples of a threshold below which, in the corporate scheme or hierarchy, an individual employee may not be held liable under the SHRL, but not an articulation of the precise standard above which Special Term must find that a question of fact exists that the individual defendant is liable under the State Human Rights Law. This distinction is not important for Barnett's motion, because, for the reasons stated below, Patrowich clearly compels a grant of summary judgment in his favor. But it is important for Calle's motion, because Calle may well have had the power to do something more in the corporate hierarchy than carry out someone else's personnel decisions. ¹

Turning to the facts, defendant Barnett's motion for summary judgment, presented by leave of the Appellate Division after Barnett's deposition, Foley v. Mobil Chemical Company, 214 A.D.2d 1005, 1006, 626 N.Y.S.2d 908 (4th Dept.1995), is resolved readily under the Patrowich test. Plaintiff alleges only that Barnett was in the Employee Relations Department, that he "was part of the process" of Mobil's hiring, firing, and evaluation of employees, and that he signed personnel action forms recording personnel actions originating elsewhere. Barnett is entitled to summary judgment because he had no ownership of Mobil or power to do more than process and record Mobil's personnel decisions made by other employees.

Concerning Calle's motion, defendants established without contradiction in their motion papers that personnel decisions at Mobil were actually made by two layers of line management personnel before they are carried out by Calle. Interpreting the evidence in plaintiff's favor, as is required on motions for summary judgement, it is fair to conclude that, in Mobil's scheme, Calle made hiring and firing proposals for approval by others, and that he exercised day-to-day control of plaintiff's work schedule and job functions as her supervisor. Calle conceded in his deposition that he hired and trained most of the people in Mobil's Label Materials Group, albeit with approval from his in line supervisor, Jim Lambert, and the Employee Relations Department. Indeed, he hired plaintiff, presumably with those two approvals, and evaluated her performance on a yearly basis. According to Calle, she reported to him. According to plaintiff, Calle "ran the whole marketing operation[,] ... [and] often bragged that he could do what he wanted to do and that he had the power to do so because he had the Employee Relations Department in his back pocket."

But plaintiff's effort to avoid summary judgment with such allegations is unavailing, because Patrowich disapproved of the holding in Koster v. Chase Manhattan Bank, 554 F.Supp. 285 (S.D.N.Y.1983), in which virtually identical allegations by the plaintiff in that case, that her supervisor's recommendations "were usually 'rubber stamped,' " were held sufficient to raise an issue of fact precluding summary judgement on the individual liability issue. Id. 554 F.Supp. at 290. Indeed, Calle's alleged power to recommend personnel actions and his day-to-day control over plaintiff as her supervisor mirror the pleadings in Patrowich itself. Accordingly, Calle appears to be entitled to summary judgment notwithstanding plaintiff's averments of his supposed autonomy. ²

This conclusion is consistent with an analysis of the generic "economic reality" test embraced by Patrowich, which was drawn largely from a line of Fair Labor Standards Act (FLSA) cases. In Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir.1984), cited with approval in Patrowich, 63 N.Y.2d at 544, 483 N.Y.S.2d 659, 473 N.E.2d 11, the court held that "[t]he 'economic reality' test ... has been refined and ... is understood to include inquiries into: 'whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.' " Carter, 735 F.2d at 12 (quoting Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1470 (9th Cir.1983)). The multi-factor test of State Div. of Human Rights v. GTE Corporation, 109 A.D.2d 1082, 487 N.Y.S.2d 234 (4th Dept.1985) appears to be a similar approach, though not in terms identical. See also, Samper v. University of Rochester Strong Mem. Hosp., 139 Misc.2d 580, 583, 528 N.Y.S.2d 958 (Sup.Ct. Monroe Co.1987), mod. on other grounds and otherwise aff'd, 144 A.D.2d 940, 535 N.Y.S.2d 281 (4th Dept.1988).

In Danneskjold v. Hausrath, 82 F.3d 37 (2d Cir.1996), however, which like Carter involved a claim by a prison inmate seeking unpaid minimum wages under the FLSA, the court substantially revised its approach to the economic reality test, and rejected the applicability of the four part test of Carter Concluding that the four factor test of GTE Corporation and Samper is inapt to this case leaves for consideration whether a question of fact exists under the generic "economic reality" test. A review of the other cases approved in Patrowich, and an examination whether the SHRL would be undermined by denying coverage, shows that plaintiff has failed to raise such an issue of fact with respect to Calle. Beginning with the cases, in Donovan v. Agnew, 712 F.2d 1509 (1st Cir.1...