Margaret Doe v. Bloomberg, L.P.

• Decision Date: 11 February 2021
• Docket Number: No. 8,8
• Citation: 36 N.Y.3d 450,143 N.Y.S.3d 286,167 N.E.3d 454
• Court: New York Court of Appeals Court of Appeals
• Parties: Margaret DOE, Appellant, v. BLOOMBERG, L.P., et al., Defendants, Michael Bloomberg, Respondent.

36 N.Y.3d 450

167 N.E.3d 454

143 N.Y.S.3d 286

Margaret DOE, Appellant,

v.BLOOMBERG, L.P., et al., Defendants,Michael Bloomberg, Respondent.

No. 8

Court of Appeals of New York.

February 11, 2021

Law Office of Niall Macgiollabhuí, New York City (Niall Macgiollabhuí of counsel), and The Clancy Law Firm, P.C., New York City (Donna H. Clancy of counsel), for appellant.

Proskauer Rose LLP, New York City (Elise M. Bloom, Rachel S. Philion and Andrew A. Smith of counsel), for respondent.

Ritz Clark & Ben-Asher LLP, New York City (Miriam F. Clark of counsel), for National Employment Lawyers Association- New York, amicus curiae.

Debevoise & Plimpton LLP, New York City (Jyotin Hamid, Morgan A. Davis, Malini Malhorta and Jonathan B. Mangel of counsel), for Partnership for New York City, amicus curiae.

OPINION OF THE COURT

GARCIA, J.

Plaintiff, an employee of Bloomberg L.P. using the pseudonym "Margaret Doe," brought suit against defendants Bloomberg L.P., her supervisor Nicholas Ferris, and Michael Bloomberg, asserting several causes of action arising from alleged discrimination, sexual harassment, and sexual abuse. The question before us is whether Bloomberg, in addition to Bloomberg L.P., may be held vicariously liable as an employer under the New York City Human Rights Law (Administrative Code of City of NY, title 8 [City HRL]) based on his status as "owner" and officer of the company. We hold that Bloomberg is not an "employer" within the meaning of the City HRL and accordingly, we affirm the dismissal of plaintiff's claims that seek to hold Bloomberg vicariously liable for Ferris's offending conduct.

I.

Plaintiff's complaint asserted various causes of action, including sex discrimination and hostile work environment claims under the City HRL.¹ Plaintiff alleged that Ferris, her direct supervisor at Bloomberg L.P., engaged in a continuous pattern of sexual harassment, including rape. She alleged that Bloomberg, in addition to Bloomberg L.P., was her "employer" and as a result was subject to vicarious liability under the City HRL. Plaintiff asserted that "[a]t all relevant times" Bloomberg was the "Co–Founder, Chief Executive Officer, and President of Bloomberg[ L.P.]," and that he had fostered an environment that accepted and encouraged "sexist and sexually-charged behavior." She does not claim that Bloomberg had any "personal participation" in the specific offending conduct.

Bloomberg moved to dismiss the claims against him. Supreme Court, after first granting the motion to dismiss, granted reargument and denied the motion. The Appellate Division, with two Justices dissenting, reversed and dismissed the causes of action against Bloomberg ( 178 A.D.3d 44, 109 N.Y.S.3d 254 [1st Dept. 2019] ). Plaintiff appealed to this Court as of right pursuant to CPLR 5601(a).

II.

"When reviewing a defendant's motion to dismiss a complaint for failure to state a cause of action, a court must give the complaint a liberal construction, accept the allegations as true and provide plaintiffs with the benefit of every favorable inference" ( Cortlandt St. Recovery Corp. v. Bonderman, 31 N.Y.3d 30, 38, 73 N.Y.S.3d 95, 96 N.E.3d 191 [2018] [internal quotation marks omitted]). The ultimate question is whether, accepting the allegations and affording these inferences, "plaintiff can succeed upon any reasonable view of the facts stated" ( Aristy–Farer v. State of New York, 29 N.Y.3d 501, 509, 58 N.Y.S.3d 877, 81 N.E.3d 360 [2017] [internal quotation marks omitted]). Applying this standard, we conclude that the claims against Bloomberg must be dismissed, but our reasoning differs from that of the courts below.

A.

The City HRL makes it unlawful for "an employer or an employee or agent thereof" to discriminate on the basis of gender (Administrative Code of City of N.Y. § 8–107[1][a] ). The statute also prohibits "any person" from aiding and abetting discrimination (id. § 8–107[6] ) or from retaliating against another person for engaging in certain protected activities (id. § 8–107[7] ).

In addition, the City HRL imposes vicarious liability on employers in the following circumstances:

"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 one or two of this section only where:

"(1) the employee or agent exercised managerial or supervisory responsibility; or

"(2) the employer knew of the employee's or agent's discriminatory conduct, and acquiesced in such conduct or failed to take immediate and appropriate corrective action; an employer shall be deemed to have knowledge of an employee's or agent's discriminatory conduct where that conduct was known by another employee or agent who exercised managerial or supervisory responsibility; or

"(3) the employer should have known of the employee's or agent's discriminatory conduct and failed to exercise reasonable diligence to prevent such discriminatory conduct" (Administrative Code of City of N.Y. § 8–107[13][b] ).

The statute is clear as to when an employer is liable: for the employer's own offending conduct and vicariously for some actions of others. But the term "employer" is undefined, generating confusion as courts have endeavored to determine who is an employer in the context of the extensive—and at times strict—liability imposed.

B.

We do not find persuasive the analysis adopted by the Appellate Division majority. That court held that "some participation in the specific conduct committed against the plaintiff is required to hold an individual owner or officer of a corporate employer personally liable in his or her capacity as an employer" ( 178 A.D.3d at 50, 109 N.Y.S.3d 254 ). Because plaintiff failed to allege that Bloomberg "encouraged, condoned or approved of the specific discriminatory conduct allegedly committed by Ferris," the court dismissed the complaint against Bloomberg (id. at 50, 52, 109 N.Y.S.3d 254 ).

The Appellate Division majority's test is derived from our case law interpreting the New York State Human Rights Law (Executive Law art 15 [State HRL]). In Matter of Totem Taxi v New York State Human Rights Appeal Bd., we held that a common carrier or place of public accommodation, like a typical private employer, could not be held liable under the State HRL for an employee's discriminatory act "unless the employer became a party to it by encouraging, condoning, or approving it" ( 65 N.Y.2d 300, 305, 491 N.Y.S.2d 293, 480 N.E.2d 1075 [1985] ; see also Matter of State Div. of Human Rights v St. Elizabeth's Hosp., 66 N.Y.2d 684, 687, 496 N.Y.S.2d 411, 487 N.E.2d 268 [1985] ; Hart v. Sullivan, 84 A.D.2d 865, 866, 445 N.Y.S.2d 40 [3d Dept. 1981], affd 55 N.Y.2d 1011, 449 N.Y.S.2d 481, 434 N.E.2d 717 [1982] ). In Totem Taxi, the Court was not considering who was an employer under the State HRL—it was the corporation that employed the driver who engaged in offensive conduct. Rather, the issue was whether, under that statute, the corporate employer could be liable under a respondeat superior theory for the acts of an employee. Concluding that the State HRL did not impose vicarious liability on employers, the Court held that only an employer who "became a party to" the discriminatory act could be held liable ( Totem Taxi, 65 N.Y.2d at 305, 491 N.Y.S.2d 293, 480 N.E.2d 1075 [statute did not provide "that a person who employs one who commits a discriminatory act is also guilty of a violation irrespective of fault"]). By contrast, this Court held in Zakrzewska v. New School that City HRL section 8–107(13)(b)(1), unlike any provision in the State HRL, is a vicarious liability provision which imposes strict liability on an employer—the employer need not have "participated" in the offending conduct ( 14 N.Y.3d 469, 480–481, 902 N.Y.S.2d 838, 928 N.E.2d 1035 [2010] ). Accordingly, in Zakrzewska, we made clear that the State HRL's minimum culpability standard was irrelevant to assessing whether an employer is liable under this provision of the City HRL ( id. at 481, 902 N.Y.S.2d 838, 928 N.E.2d 1035 ["we may not apply cases under the State Human Rights Law imposing liability only where the employer encourages, condones or approves the unlawful discriminatory acts"]).

Nonetheless, some courts have applied the State HRL's culpability standard to determine whether individuals are employers under the City HRL because of their relationship to the business entity employing the perpetrator of the offending conduct (see Boyce v. Gumley–Haft, Inc., 82 A.D.3d 491, 492, 918 N.Y.S.2d 111 [1st Dept. 2011] [defendant who was the 50% owner of an LLC with the power to hire and fire employees, could be held liable as an employer under section 8–107(13)(b) provided that "he encouraged, condoned or approved (the) alleged discriminatory conduct"]; McRedmond v Sutton Place Rest. & Bar, Inc., 95 A.D.3d 671, 673, 945 N.Y.S.2d 35 [1st Dept. 2012] [the general manager of a restaurant "can be held liable (under the State HRL) as an employer if, as the record suggests, he had the authority to do more than carry out personnel decisions and he ... participated in the conduct (and)(f)or the same reasons, (he) may also be held liable under the City HRL"]). However, the Totem Taxi test for determining whether an employer is liable under the State HRL has no application in determining who is an employer for purposes of the City HRL.

The test proposed by the dissent below, purportedly drawn from our decision in Patrowich v. Chemical Bank (63 N.Y.2d 541, 483 N.Y.S.2d 659, 473 N.E.2d 11 [1984] ), is even less suitable. According to the dissent an individual qualifies as an employer under the City HRL when shown to have either (1) an ownership interest in the organization or (2) the power to do more than carry out personnel decisions made by others ( Doe, 178 A.D.3d at 53, 109 N.Y.S.3d 254 [Manzanet–Daniels, J., dissenting]). This is a misreading of Patrowich.

In Patrowich, the Court considered whether a corporate officer or employee could be an "employer"...