Author: Michael C. Jacobson, XpertHR Legal Editor

June 14, 2013

New York City employers may be exposed to increased discrimination claims after a recent Second Circuit Court of Appeals ruling that relaxed the standard for employees to prove a discrimination claim under the New York City Human Rights Law (NYCHRL). See Mihalik v. Credit Agricole Cheuvreux North America, Inc., +2013 U.S. App. LEXIS 8494 (2nd Cir. 2013).

The new standard is a departure from the standard used to analyze federal and state discrimination claims. Employees claiming discrimination in the city now need only show they were treated "less well" than other employees due to discrimination.

In Mihalik, the employee claimed she was hired into a "boys' club" atmosphere, subjected to inappropriate sexual comments and was propositioned by her manager for sex. She rejected his advances and then suffered retaliation in the form of isolation and verbal reprimands in front of other employees, was excluded from meetings and was criticized for the quality of her work.

She complained about her manager's behavior twice prior to being discharged for alleged performance deficiencies. Thereafter, she filed a complaint alleging gender discrimination and retaliation under the NYCHRL. She alleged the termination was retaliation for her refusal to engage in sex with her manager.

The federal district court analyzed the employee's claims under the federal severe or pervasive standard and dismissed the employee's claims, finding that the employer's behavior did not amount to actionable discrimination.

The employee appealed the decision to the Second Circuit.

The Second Circuit reversed the district court's decision, ruling that the employee "need only demonstrate...that she has been treated less well than other employees because of her gender."

The federal severe or pervasive standard is not relevant in terms of liability under the NYCHRL, only to measure damages. The "less well" standard certainly opens the door for more claims, as potential employee plaintiffs need only demonstrate differential treatment because of a discriminatory intent.

The Court permitted the employee's retaliation claim to continue, however, finding that she took action to oppose the discrimination by complaining to her employer and that her employer's conduct, if left unchecked, would likely deter other employees from reporting improper conduct in the future.

Importantly, the court stated that it is unclear whether the McDonnell Douglas burden-shifting framework - one of the employer's best litigation tools to defend against discrimination claims - will be effective against NYCHRL claims. Instead, employers may have to show that discrimination played no role whatsoever in the discipline or termination to defend a NYCHRL claim.

That is a much higher burden of proof for employers making it easier for employees to prevail on their discrimination claims under the NYCHRL. However, it remains uncertain at this time which standard applies, suggesting a potentially bleak future in NYCHRL litigation for employers.

In light of this ruling, employers that are exposed to NYCHRL claims must be extra-vigilant in educating their HR managers and supervisors regarding discrimination and retaliation in the workplace and must react swiftly and efficiently to discrimination complaints.

Additional Resources

Organizational Exit > Involuntary Terminations: New York > New York City Human Rights Law

Employee Management > EEO - Discrimination: New York > Discrimination Under New York City Law

How to Prevent Discrimination in the Workplace