Employment Law – Page 19 – New York Appellate Digest

CORPORATE SHAREHOLDERS AND OFFICERS MAY ONLY BE LIABLE FOR LABOR LAW (WAGE-PAYMENT-RELATED) VIOLATIONS IF THEY EXERCISE CONTROL OVER THE DAY-TO-DAY OPERATIONS OF THE CORPORATION, WHICH WAS ALLEGED HERE (SECOND DEPT).

The Second Department, reversing Supreme Court and reinstating defendants’ counterclaims alleging violations of the Labor Law, noted that corporate shareholders and officers can only be liable for Labor Law (wage-payment-related) violations if they exercise control of a corporation’s day-to-day operations, which was alleged here:

“[C]orporate shareholders and officers generally may not be subjected to civil liability for corporate violations of the Labor Law absent allegations that such persons exercised control of the corporation’s day-to-day operations by, for example, hiring and firing employees, supervising employee work schedules, and determining the method and rate of pay” … . Here, the defendants adequately alleged, inter alia, that the additional defendants controlled the day-to-day operations of the plaintiff, including the plaintiff’s payment practices. Interstate Home Loan Ctr., Inc. v United Mtge. Corp., 2022 NY Slip Op 03715, Second Dept 6-8-22

Practice Point: Corporate shareholders and officers may be liable for Labor Law (wage-payment-related) violations only if they exercise control over the day-to-day operations of the corporation.

June 8, 2022

Employment Law, Negligence, Workers' Compensation

DEFENDANT PROPERTY OWNER FAILED TO DEMONSTRATE IT WAS THE ALTER EGO OF PLAINTIFF’S EMPLOYER OR THAT PLAINTIFF WAS DEFENDANT’S SPECIAL EMPLOYEE; THEREFORE PLAINTIFF’S PERSONAL INJURY ACTION WAS NOT PRECLUDED BY THE EXCLUSIVE REMEDY ASPECT OF THE WORKERS’ COMPENSATION LAW (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant Zorn Realties, the owner of the property, did not demonstrate it was the alter ego of plaintiff’s employer, Zorn Poultry Farm, and did not demonstrate plaintiff was a special employee of Zorn Realties. Therefore, the negligence action stemming from plaintiff’s fall through a chute or a hole on defendant’s property was not precluded by the exclusive-remedy aspect of the Workers’ Compensation Law:

“‘A defendant moving for summary judgment based on the exclusivity defense of the Workers’ Compensation Law under this theory must show, prima facie, that it was the alter ego of the plaintiff’s employer'” … . “A defendant may establish itself as the alter ego of a plaintiff’s employer by demonstrating that one of the entities controls the other or that the two operate as a single integrated entity” … . However, “a mere showing that the entities are related is insufficient where a defendant cannot demonstrate that one of the entities controls the day-to-day operations of the other” … .

… Although the defendant presented evidence that the two entities were related inasmuch as they shared an address and a liability insurance policy, the defendant failed to establish that the entities shared officers or had identical owners. Additionally, the evidence showed that the entities served different purposes, had separate bank accounts, filed separate tax returns, and did not have a shared workers’ compensation policy … . …

“Many factors are weighed in deciding whether a special employment relationship exists, and generally no single one is decisive . . . Principal factors include who has the right to control the employee’s work, who is responsible for the payment of wages and the furnishing of equipment, who has the right to discharge the employee, and whether the work being performed was in furtherance of the special employer’s or the general employer’s business . . . The most significant factor is who controls and directs the manner, details, and ultimate result of the employee’s work'” … .

… [T]he defendant failed to establish … that the plaintiff was its special employee at the time of the accident because it did not submit sufficient evidence to establish, inter alia, that it controlled and directed the manner, details, and ultimate result of the plaintiff’s work, nor did it establish that the plaintiff had knowledge of and consented to a special employment relationship … . Mauro v Zorn Realties, Inc., 2022 NY Slip Op 03509, Second Dept 6-1-22

Practice Point: Here the defendant property owner was not able to take advantage of the exclusive-remedy aspect of the Workers’ Compensation Law in this personal injury action. Plaintiff’s employer was not the alter ego of defendant and plaintiff was not defendant’s special employee.

June 1, 2022

Employment Law, Human Rights Law

PLAINTIFF’S CAUSES OF ACTION FOR CONSTRUCTIVE DISCHARGE AND HOSTILE WORK ENVIRONMENT SHOULD HAVE BEEN DISMISSED, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court determined plaintiff’s causes of action for constructive discharge and hostile work environment should have been dismissed. The court laid out the criteria for those causes of action:

“An employee is constructively discharged when her or his employer, rather than discharging the plaintiff directly, deliberately created working conditions so intolerable that a reasonable person in the plaintiff’s position would have felt compelled to resign” … . Here, the defendants established, prima facie, that the plaintiff’s complaints were insufficient to show an intolerable work environment that would lead a reasonable person in that position to feel compelled to resign … . …

A hostile environment claim “involves repeated conduct,” not “[d]iscrete acts such as termination, failure to promote, denial of transfer, or refusal to hire” … . Here, the two discrete acts alleged by the plaintiff were insufficient to create a hostile work environment … . Blackman v Metropolitan Tr. Auth., 2022 NY Slip Op 03490, Second Dept 6-1-22

Practice Point: A “constructive discharge” employment-discrimination cause of action requires the deliberate creation of intolerable working conditions designed to force the plaintiff to quit (not demonstrated here). A “hostile work environment” employment-discrimination cause of action requires “repeated conduct” which is not demonstrated discrete acts such as termination, failure to promote, denial of transfer or refusal to hire.

June 1, 2022

Civil Procedure, Employment Law, Negligence, Privilege

PLAINTIFF IN THIS NEGLIGENT-HIRING ACTION AGAINST THE HOSPITAL WHICH EMPLOYED A DOCTOR WHO ALLEGEDLY SEXUALLY ASSAULTED HER AND OTHER PATIENTS SOUGHT DISCOVERY; THE IDENTITIES OF THE OTHER ASSAULTED PATIENTS WERE NOT PROTECTED BY THE DOCTOR-PATIENT PRIVILEGE; PARTY STATEMENTS WERE NOT PROTECTED BY THE QUALITY ASSURANCE PRIVILEGE; AND PLAINTIFF WAS ENTITLED TO THE NAMES OF THE DOCTOR’S COWORKERS (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined plaintiff, who, along with other patients, was allegedly sexually assaulted by a doctor, Newman, employed by defendant hospital (Mount Sinai), was entitled to certain discovery. Plaintiff sought discovery of party statements, incident reports, the identities of the other assaulted patients, and the names of the doctor’s coworkers at the time of each assault. Plaintiff was entitled to documents not protected by the quality assurance privilege. The doctor-patient privilege did not extend to the identities of the other assaulted patients. And the names of the doctor’s coworkers were in a statement prepared by the Health and Human Services Department to which plaintiff was entitled:

We reject Mount Sinai’s assertion that privilege excuses it from complying with plaintiff’s discovery demands regarding the identities of the other three patients that defendant Newman assaulted. The doctor-patient privilege provided for by CPLR 4504(a) protects information relevant to a patient’s medical treatment, but the privilege does not cover incidents of abuse not part of a patient’s treatment … . Moreover, while the court stated that disclosure would violate HIPAA, federal regulations provide for disclosure of HIPAA-protected documents subject to a showing that the party seeking disclosure has made a good faith effort to secure a qualified protective order, and plaintiff has done so in each of her motions (45 CFR 164.512[e][ii], [v] …).

… [T]he identities of defendant Newman’s coworkers at the times of each of the assaults are relevant and must be disclosed, as those coworkers may have information concerning his conduct … . The names of the coworkers were contained in a statement of deficiencies prepared by Department of Health and Human Services, Center for Medicare and Medicaid Services, and plaintiff is entitled to production of that statement, redacted to remove conclusions of law and opinions of the Department of Health and Human Services … . Newman v Mount Sinai Med. Ctr., Inc., 2022 NY Slip Op 03327, First Dept 5-19-22

Practice Point: Here plaintiff was allegedly sexually assaulted by a doctor who pled guilty to assaulting other patients. Plaintiff sued the hospital which employed the doctor under a negligent hiring and retention theory. The names of the other assaulted patients were not protected by the physician-patient privilege. Party statements were not protected by the quality assurance privilege. And plaintiff was entitled to the names of the doctor’s coworkers.

May 19, 2022

Arbitration, Contract Law, Employment Law

TO BE ENFORCABLE, AN AGREEMENT TO ARBITRATE MUST BE CLEAR, EXPLICIT AND UNEQUIVOCAL; HERE THE WORD “DISAGREEMENTS” IN THE ARBITRATION CLAUSE WAS TOO VAGUE AND AMBIGUOUS TO REQUIRE PLAINTIFF TO ARBITRATE HER CLAIMS OF UNPAID COMMISSIONS AND WRONGFUL TERMINATION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the arbitration clause in the employment agreement was ambiguous and vague. The clause could not be the basis for forcing plaintiff to arbitrate her claims that she was not paid commissions owed to her and was wrongfully terminated:

… “[A] party will not be compelled to arbitrate and, thereby, to surrender the right to resort to the courts, absent ‘evidence which affirmatively establishes that the parties expressly agreed to arbitrate their disputes'” … . “The agreement must be clear, explicit and unequivocal and must not depend upon implication or subtlety” … .

Here, the provision, “[t]hird party in case of a disagreement: Rabbi Shlomo Gross (Belze Dayan) or Rabbi Meir Labin,” does not expressly and unequivocally establish that the parties agreed to arbitrate the plaintiffs’ claims for unpaid commissions or wrongful termination … . Moreover, this provision ambiguously refers to a disagreement, but does not specify the types of disagreements to which it applies … . Rubinstein v C & A Mktg., Inc., 2022 NY Slip Op 03136, Second Dept 5-11-22

Practice Point: Plaintiff alleged the defendant employer did not pay her commissions she was owed and wrongfully terminated her. Although the employment contract called for the arbitration of “disagreements,” that term was not specific enough to serve as a basis for forcing plaintiff to arbitrate her unpaid-commission and wrongful-termination claims.

May 11, 2022

Civil Procedure, Employment Law, Labor Law

ACTION AGAINST AMAZON ALLEGING RETALIATION AGAINST WORKERS WHO PROTESTED COVID-RELATED WORKING CONDITIONS PREEMPTED BY NATIONAL LABOR RELATIONS ACT (NLRA) (FIRST DEPT).

The First Department, reversing Supreme Court, determined this action by the NYS Attorney General against Amazon alleging retaliation against workers for protesting COVID-related working conditions was preempted by the National Labor Relations Act (NLRA):

… [W]e find that the Labor Law §§ 215 and 740 claims alleging retaliation against workers based, in part, on their participation in protests against unsafe working conditions plainly relate to the workers’ participation in “concerted activities for the purpose of . . . mutual aid or protection,” i.e., activities that are protected by the NLRA … , and therefore that the claims are preempted … . Where conduct is clearly protected or prohibited by the NLRA, the NLRB, and not the states, should serve as the forum for disputes arising out of the conduct … . People v Amazon.com, 2022 NY Slip Op 03081, First Dept 5-10-22

Practice Point: Here a state action, brought by the NYS Attorney General, against Amazon alleging retaliation against workers for protesting COVID-related working conditions was deemed preempted by the National Labor Relations Act (NLRA).

May 10, 2022

Attorneys, Contract Law, Employment Law, Labor Law-Construction Law

PLAINTIFF RAISED A QUESTION OF FACT WHETHER HE WAS INDUCED TO SIGN RELEASES BY FRAUD, DURESS AND/OR MUTUAL MISTAKE; PLAINTIFF WAS APPROACHED BY HIS EMPLOYER’S LAWYER AND ALLEGEDLY BELIEVED HE WOULD LOSE HIS JOB IF HE DIDN’T SIGN (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined plaintiff raised a question of fact about whether the releases were signed by plaintiff because of fraud, duress and/or mutual mistake. The facts are not described. Apparently plaintiff was injured at work and he alleged that he believed he would lose his job if he didn’t sign the releases:

“A release, even though properly executed, may nonetheless be void. Where fraud or duress in the procurement of a release is alleged, a motion to dismiss should be denied” … . Specifically, plaintiff alleged that Selina Maddock, a lawyer, was sent by their employer Navillus to secure plaintiff’s signature on the release, before he retained counsel, and made both the promise that he would have a job if he signed the releases, and the implicit threat that he would not have a job in the future if he failed to sign. He further alleged that Maddock advised plaintiff that he did not need to consult counsel and misrepresented to plaintiff that he was only releasing claims against his employer, Navillus. Consistent with this, plaintiff testified that he did not understand that he was releasing anyone besides his employer. Furthermore, “a mistaken belief as to the nonexistence of presently existing injury is a prerequisite to avoidance of a release”; here, while defendants argue that plaintiff is merely mistaken as to the sequelae of a known injury, plaintiff raises a factual issue as to whether the additional injuries he claims to suffer from were a sequelae of his right knee injury. Forcing a Hobbesian choice on injured workers to accept a small settlement or else lose their job before they can ascertain the nature and scope of their injury is contrary to the strong public policy of New York state to protect injured workers, as reflected in the Labor Law…. . Dolcimascolo v 701 7th Prop. Owner, LLC, 2022 NY Slip Op 02944, First Dept 5-3-22

Practice Point: Plaintiff was apparently injured at work. A lawyer for his employer approached him about signing releases. Plaintiff signed, allegedly because he believed he would lose his job if he didn’t. Therefore there was a question of fact about whether fraud, duress or mutual mistake invalidated the releases.

May 3, 2022

Administrative Law, Employment Law, Negligence

PLAINTIFF DANCER STATED CAUSES OF ACTION AGAINST DEFENDANT DANCER AND THEIR EMPLOYER, THE NEW YORK CITY BALLET (NYCB), IN CONNECTION WITH INTIMATE IMAGES ALLEGEDLY DISCLOSED BY THE DEFENDANT DANCER (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Singh, over an extensive dissenting opinion, determined plaintiff, Waterbury, stated causes of action for: (1) violation of the NYC Administrative Code provision which prohibits the disclosure of intimate images without consent; (2) intentional infliction of emotional distress; and (3) negligent hiring, supervision and retention. The plaintiff (Waterbury) was a dancer with the defendant New York City Ballet (NYCB). The defendant Finlay, who allegedly disclosed the images, was also a NYCB dancer. The negligent hiring cause of action is against NYCB as the defendant-dancer’s employer:

Waterbury’s allegations that images depict her engaged in sexual activity suffice (see Administrative Code § 10-180 [a] …). Construing the complaint liberally and according Waterbury “the benefit of every possible favorable inference” … , the allegations that Finlay shared images of her breasts are also sufficient (see Administrative Code § 10-180 [a] …). …

Waterbury also sufficiently alleges that Finlay intended to cause her economic, physical, or substantial emotional harm. “A result is intended if the act is done with the purpose of accomplishing such a result or with knowledge that to a substantial certainty such a result will ensue” … . …

Waterbury alleges that NYCB dancers and others affiliated with NYCB shared images and commentary regarding other women and that NYCB knew that Finlay and other dancers were degrading and exploiting young women. She asserts that NYCB implicitly encouraged this behavior. Waterbury states that NYCB knew of Finlay’s sexual conduct towards young women and took no steps to prevent such conduct. Waterbury v New York City Ballet, Inc., 2022 NY Slip Op 02890, First Dept 4-28-22

Practice Point: The NYC Administrative Code prohibits the disclosure of intimate images without consent. Here the complaint stated a cause of action based on an alleged violation of that code provision.

April 28, 2022

Employment Law

PETITIONER WAS CHARGED WITH MAKING A COMMENT TO A FELLOW EMPLOYEE AT A SOCIAL GATHERING, WAS FOUND GUILTY AND WAS TERMINATED; THE EMPLOYEE TESTIFIED THE REMARK WAS MADE AT THE WORKPLACE; THEREFORE PETITIONER WAS FOUND GUILTY OF CONDUCT THAT WAS NEVER CHARGED; DETERMINATION ANNULLED (THIRD DEPT).

The Third Department, annulling the determination terminating petitioner’s employment with the state, found that petitioner’s due process rights were violated because he was found guilty of conduct that was never charged. Petitioner was charged with making a comment to a fellow employee at a social gathering. But the employee testified the remark was made at the workplace:

Pursuant to Civil Service Law § 75 (1), a civil service employee “shall not be removed or otherwise subjected to any disciplinary penalty . . . except for incompetency or misconduct shown after a hearing upon stated charges.” “The standard of review of such a determination made after a disciplinary hearing is whether it is supported by substantial evidence” … . “The first fundamental of due process is notice of the charges made. This principle equally applies to an administrative proceeding for even in that forum no person may lose substantial rights because of wrongdoing shown by the evidence, but not charged” … Fundamentally, the determination made in a disciplinary proceeding “must be based on the charges made” and it is error to find a public employee guilty of uncharged specifications of misconduct and impose a penalty thereon … . Matter of Kiyonaga v New York State Justice Ctr. for the Protection of People with Special Needs, 2022 NY Slip Op 02850, Third Dept 4-28-22

Practice Point: Pursuant to the Civil Service Law, a state employee charged with official misconduct is entitled to due process, including notice of the charges. Here the petitioner was charged with making a comment to a fellow employee at a social gathering. The employee testified the remark was made in the workplace, conduct that was never charged. Petitioner was improperly found guilty of misconduct that was never charged and was terminated. The determination was annulled.

April 28, 2022

Employment Law

VAGUE, CONCLUSORY ALLEGATIONS WILL NOT SUPPORT A CONSTRUCTIVE DISCHARGE CAUSE OF ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff did not state a cause of action for constructive discharge from his employment as a civil engineer for the City of New York:

The plaintiff was employed by the New York City Department of Transportation (hereinafter DOT) as an assistant civil engineer from 1997 until 2014, when he resigned. He commenced this action in 2017 alleging, inter alia, that he had been constructively discharged because he had reported other employees’ misconduct … . * * *

“An employee is constructively discharged when her or his employer, rather than discharging the plaintiff directly, deliberately created working conditions so intolerable that a reasonable person in the plaintiff’s position would have felt compelled to resign” … . Here, affording the complaint a liberal construction, accepting the facts as alleged to be true, and according the plaintiff the benefit of every possible favorable inference … , the complaint fails to state a cause of action alleging constructive discharge, as the allegations are either vague and conclusory … , or pertain to events that occurred after the plaintiff resigned. Dhar v City of New York, 2022 NY Slip Op 02779, Second Dept 4-27-22

Practice Point: Vague and conclusory allegations will not support a cause of action for constructive discharge, i.e., working conditions which are intolerable, “forcing” plaintiff to resign.

April 27, 2022