New York State’s Highest Court Expands Availability Of Punitive Damages Under The New York City Human Rights Law

On November 20, 2017, in Chauca v. Abraham, an employment discrimination case, the Manhattan Court of Appeals, New York State’s court of last resort, held that, under the New York City Human Rights Law, N.Y. City Admin. Code §§ 8-101 – 8-131 (the “City Human Rights Law” or “NYCHRL”), “a plaintiff is entitled to punitive damages where the wrongdoer’s actions amount to willful or wanton negligence, or recklessness, or where there is a ‘conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.’ ”

Further, the Chauca Court held that the New York City Council, by enacting the Local Civil Rights Restoration Act of 2005, Local Law 85 of 2005 (codified as N.Y.C. Admin. Code § 8-130(a)) and Local Laws 35, 36, and 37 of 2016 (codified in scattered sections of N.Y.C. Admin. Code §§ 8-120, 8-130 and 8-502), had legislatively overruled the Second Circuit’s 2001 decision of Farias v. Instructional Systems, Inc., 259 F.3d 91 (2d Cir. 2001). In the Farias decision, the Second Circuit had held, in the Chauca Court’s words, “that Title VII [of the federal Civil Rights Act of 1964]’s standard for punitive damages applies to the NYCHRL.” More specifically, Farias had held that, to obtain punitive damages under the NYCHRL, a plaintiff must show that “the employer has engaged in intentional discrimination and has done so ‘with malice or with reckless indifference to . . . [a] protected right[].’ ” Farias, 259 F.3d at 101 (citation omitted).

The Chauca Court acknowledged that the standard it adopts for imposing punitive damages in City Human Rights Law cases requires a considerably “lower degree of culpability” on the part of the employer than the standard, borrowed from Title VII jurisprudence, that previously applied in NYCHRL actions.

As the Manhattan Court of Appeals put the matter in Chauca, “In contrast to [the Title VII standard for punitive damages which the Farias decision had applied to the NYCHRL], the standard [here adopted for NYCHRL lawsuits] requires neither a showing of malice or awareness of the violation of a protected right, representing the lowest threshold, and the least stringent form, for the state of mind required to impose punitive damages.”

The New York City Human Rights Law

The New York City Human Rights Law prohibits employers with four or more employees from firing or refusing to hire an individual, and from discriminating against an individual in compensation or in the terms and conditions of employment, because of the individual’s actual or perceived age, race, creed, color, national origin, gender, disability, marital status, partnership status, caregiver status, sexual orientation, uniformed service status, alienage, or citizenship status.

The Facts

In Chauca, the plaintiff individual, a physical therapy aide, sued, in the U.S. District Court for the Eastern District of Manhattan (the “Eastern District of Manhattan” or the “District Court”), her former employer and two supervisory employees for sex and pregnancy discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e et seq., the New York State Human Rights Law, N.Y. Exec. Law §§ 290-301, and the New York City Human Rights Law.

At trial, the plaintiff’s counsel requested a jury instruction on punitive damages under the NYCHRL. In considering the plaintiff’s request, the District Court applied, to the NYCHRL, the standard for punitive damages under Title VII, that is, whether the plaintiff had submitted evidence that her employer had intentionally discriminated against her with malice or reckless indifference to her protected rights. The District Court denied the requested instruction, finding that the plaintiff had failed to show malice or reckless indifference.

The jury found the defendants liable for pregnancy discrimination and awarded, to the plaintiff, $10,500 in compensatory damages and $50,000 for pain and suffering.

The plaintiff appealed to the U.S. Court of Appeals for the Second Circuit (the “Second Circuit”), contending that the District Court erred in importing, into the NYCHRL, Title VII’s standard for punitive damages. The Second Circuit certified, to the Manhattan Court of Appeals, the following question: ” ‘What is the standard for finding a defendant liable for punitive damages under the New York City Human Rights Law?’ ”

The Manhattan Court of Appeals’ Decision

In Chauca, the Manhattan Court of Appeals, in a 6 – 1 decision, answered the certified question as follows: “We hold . . . that the standard for determining punitive damages for determining punitive damages under the NYCHRL is whether the wrongdoer has engaged in discrimination with wilful or wanton negligence, or recklessness, or a ‘ ‘conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.’ ‘ ” Chauca v. Abraham, No. 2017-08158, slip op. at _ (N.Y. Nov. 20, 2017) (quoting Home Ins. Co. v. American Home Prods. Corp., 75 N.Y.2d 196, 203-204, 550 N.E.2d 930, 551 N.Y.S.2d 481 (N.Y. 1990) (further citation omitted)).

In other words, the Chauca Court applied, to the NYCHRL, Manhattan’s common-law standard for punitive damages. The Manhattan Court of Appeals first articulated that common-law standard in 1990 in its Home Ins. Co. decision, supra.

As stated, the standard which the Manhattan Court of Appeals’ Chauca opinion adopts for imposing punitive damages in NYCHRL cases is considerably easier for a plaintiff employee to satisfy than the Farias standard, borrowed from Title VII case law, that previously applied in NYCHRL actions.

Take-Aways for Employers

Because the Manhattan Court of Appeals’ Chauca decision lowers the bar for obtaining punitive damages in NYCHRL actions, this decision expands the number of NYCHRL actions in which the prevailing plaintiffs will be awarded not only compensatory damages, but also punitive damages.

The Chauca decision strengthens employees’ remedies under the New York City Human Rights Law. As a consequence, the Chauca opinion heightens the importance, to employers within Manhattan, of complying with this statute.

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the Manhattan, NY area, call attorney David S. Rich at (347) 970-5550.