The New York City Human Rights Law specifically says that an employer’s agent can be held liable for discrimination, but its liability provision doesn’t address the circumstances under which that agent may be held liable for the discriminatory actions of the agent’s employee.  A New York Federal Court has now addressed this gap in the law.

Background

In Suarez v. City of New York, the New York City Department of Transportation (the DOT or City) hired the plaintiff as a deckhand on the Staten Island Ferry.  The plaintiff complained to her immediate DOT supervisor about sexual harassment by a security guard employed by Allied Security Services, which had contracted with the DOT to provide security services on the ferry.  The DOT alerted Allied about the complaint, but rebuffed Allied’s efforts to participate in the investigation.  Allied still reminded the security guard about its harassment policy, warned him that “future instances [of inappropriate behavior] would constitute harassment,” and reassigned him to a different part of the ferry so he wouldn’t cross paths with the plaintiff.  The City later fired the plaintiff and she subsequently sued both the City and Allied alleging, among other things, a hostile work environment.

Allied eventually asked the Court to enter summary judgment in its favor because (1) Allied didn’t employ the plaintiff and therefore she lacked standing to sue Allied under the New York City Human Rights Law; and (2) even if she did have standing, the alleged conduct did not amount to a hostile work environment.  The Court obliged Allied, but not for the reasons Allied said were applicable.

The Eastern District Court Finds That Allied Is Not Liable to Plaintiff For Its Security’s Guard’s Discriminatory Actions

The Court quickly brushed aside Allied’s “standing” argument since the Human Rights Law explicitly provides for liability by employers and their employees and agents (§8-107(1)).  As the City’s agent, the court found, Allied could be held liable.  But should it?  This is where this decision caught my eye.

Employers, employees and agents are held liable where they actually participate in the discriminatory acts.  The City Human Rights Law has an explicit provision (§8-107(13)(b)) that defines when anemployer is considered to have “participated” in the discrimination based on the actions of the employer’s employees and agents.  It identifies three ways:

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; 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.

Curiously though, while the law makes “agents” potentially liable (§8-107(1)), this specific provision (§8-107(13)(b)) only references when employers can be held liable for the actions of their employees and agents, and it doesn’t reference when agents can be held liable for the actions of their own employees.  And that is where we come back to Suarez where the court spotted this statutory gap, but quickly concluded that §8-107(13)(b) should apply with “equal force” to agents like Allied because it “would make little sense” to hold Allied “strictly liable for the conduct of its non-supervisory employees.”

Having filled in this statutory gap, the court then analyzed whether the plaintiff could show that Allied knew or should have known of its security guard’s unlawful discriminatory conduct and acquiesced in it or failed to exercise reasonable diligence to prevent it in the first place.  The Court found that the plaintiff could not make this showing because, in fact, Allied didn’t know and couldn’t have known about the alleged harassment until the plaintiff complained, and once she did complain, Allied sought to fix the problem by warning the security guard and moving him to another part of the ferry.

Takeaways

Allied got away unscathed here – legally, that is.  It had an anti-harassment policy in place, and once it heard about the problem, it took steps to eliminate it.  Had Allied turned a blind eye and relied on the DOT to solve this problem or had the harasser been in a supervisory position, the story may have had a different ending.  The lesson here is that employers and their corporate agents should be proactive about instituting broad-based anti-discrimination/harassment policies and training their staff members to understand these policies (including the complaint reporting mechanism) and that violations thereof will not be tolerated. By taking proactive measures, they can stop discrimination or harassment from happening in the first place, especially by supervisors or managers since employers and their corporate agents can be held strictly liable for their actions under the City Human Rights Law. And if for some reason it still happens, they will be well-positioned to quickly address and eliminate the problem and reduce and corresponding exposure.