Employment Law – Page 58 – New York Appellate Digest

QUESTION OF FACT WHETHER THE TERM “INSURANCE” IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS.

The First Department, over an extensive dissent, determined the word “insurance” in a noncompete agreement was susceptible of two meanings, thereby precluding summary judgment. Defendant signed a noncompete agreement which prohibited the “brokering or placement of insurance.” After plaintiff started a new job during the time-period covered by the noncompete agreement with his previous employer, he brokered two “surety bonds” for two companies which had been clients of his former employer. Plaintiff argued the term “insurance” encompassed “surety bonds.” Defendants argued the term “insurance” did not encompass “surety bonds:”

… [T]the evidence produced by each side does not show that the interpretation urged by each is inevitable; rather, it shows that the language of the letter agreement is “on its face . . . reasonably susceptible of more than one interpretation” … . Accordingly, the motion court properly denied the motions for summary judgment. Frenkel Benefits, LLC v Mallory, 2016 NY Slip Op 06109, 1st Dept 9-21-16

INSURANCE LAW (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/CONTRACT LAW (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/NONCOMPETE AGREEMENTS (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/SURETY BONDS (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/EMPLOYMENT LAW (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)

September 21, 2016

Civil Procedure, Civil Rights Law, Employment Law

COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT.

The Second Department, reversing Supreme Court, determined plaintiff stated causes of action for sexual harassment and retaliatory firing. The Second Department noted that Supreme Court erred by relying on defenses to action, which are relevant only to a summary judgment motion, not a motion to dismiss. The Second Department further explained how a motion to dismiss is to be handled when (as here) documentary evidence is submitted in opposition:

The court erred in determining that the subject cause of action must be dismissed because the plaintiff failed to show that the behavior of her supervisor constituted more than a petty slight or trivial inconvenience. The plaintiff does not have this burden. Rather, a contention that the behavior was a petty slight or trivial inconvenience constitutes an affirmative defense … , which should be raised in the defendants’ answer, and does not lend itself to a pre-answer motion to dismiss … . A motion to dismiss merely addresses the adequacy of the pleading, and does not reach the substantive merits of a party’s cause of action. “Therefore, whether the pleading will later survive a motion for summary judgment, or whether the party will ultimately prevail on the claims, is not relevant on a pre-discovery motion to dismiss” … . * * *

“When evidentiary material is considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion has not been converted to one for summary judgment, the criterion is whether the plaintiff has a cause of action, not whether he or she has stated one, and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate” .. .

Kaplan v New York City Dept. of Health & Mental Hygiene, 2016 NY Slip Op 06063, 2nd Dept 9-21-16

EMPLOYMENT LAW (SEXUAL HARASSMENT AND RETALIATION, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)/CIVIL RIGHTS LAW (EMPLOYMENT LAW, SEXUAL HARASSMENT, SEXUAL HARASSMENT AND RETALIATION, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)/SEXUAL HARASSMENT (EMPLOYMENT LAW, SEXUAL HARASSMENT AND RETALIATION, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)/RETALIATION (EMPLOYMENT LAW, SEXUAL HARASSMENT AND RETALIATION, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)/SEXUAL HARASSMENT EMPLOYMENT LAW, SEXUAL HARASSMENT AND RETALIATION, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)/CIVIL PROCEDURE (MOTION TO DISMISS, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)/DISMISS, MOTION TO (CIVIL, COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)SUMMARY JUDGMENT (COURT SHOULD NOT CONSIDER DEFENSES TO AN ACTION ON A MOTION TO DISMISS, WHETHER THE ACTION WOULD SURVIVE A MOTION FOR SUMMARY JUDGMENT IS NOT BEFORE THE COURT)

September 21, 2016

Employment Law, Human Rights Law, Municipal Law

EMPLOYMENT DISCRIMINATION CLAIMS UNDER STATE AND CITY HUMAN RIGHTS LAW SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY.

The First Department determined plaintiff stated causes of action for employment discrimination and retaliation under both the state and city (NYC) Human Rights Law. The court noted that claims after 2011 were time-barred under the state law, but claims going back to 2007 were timely under the city law, which allows otherwise time-barred claims which are part of a continuing course of conduct:

… [P]laintiff’s claims under the New York State HRL for failure to promote after May 23, 2011 are timely and should not have been dismissed, as plaintiff alleged sufficient facts to meet his pleading burden for purposes of this motion to dismiss … . Plaintiff’s claims for failure to promote under the City HRL were also improperly dismissed because plaintiff has adequately alleged “a single continuing pattern of unlawful conduct [starting from his first promotion rejection in 2007] extending into the [limitations] period immediately preceding the filing of the complaint” … , which permits consideration under the City HRL of all actions relevant to that claim, including those that would otherwise be time-barred … . Moreover, while, as plaintiff concedes, the continuing violations doctrine only applies to his claims of failure to promote under the City HRL … , even under the State HRL, he “is not precluded from using the prior acts as background evidence in support of a timely claim'” … . St. Jean Jeudy v City of New York, 2016 NY Slip Op 06045, 1st Dept 9-15-16

EMPLOYMENT LAW (EMPLOYMENT DISCRIMINATION CLAIMS UNDER STATE AND CITY HUMAN RIGHTS LAW SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY)/HUMAN RIGHTS LAW (EMPLOYMENT DISCRIMINATION CLAIMS UNDER STATE AND CITY HUMAN RIGHTS LAW SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY)/DISCRIMINATION (EMPLOYMENT DISCRIMINATION CLAIMS UNDER STATE AND CITY HUMAN RIGHTS LAW SHOULD NOT HAVE BEEN DISMISSED AS UNTIMELY)/

September 15, 2016

Employment Law, Municipal Law

COUNTY HAD AUTHORITY TO IMPOSE A WAGE FREEZE TO ADDRESS A FINANCIAL CRISIS.

MUNICIPAL LAW, EMPLOYMENT LAW.

The Second Department, interpreting the Public Authorities Law, determined Nassau County had the authority to impose a wage freeze on county employees to address a financial crisis:

… [W]e find that, contrary to the … petitioners’ contention, the Supreme Court correctly determined that NIFA [Nassau County Interim Finance Authority] was authorized under the NIFA Act to impose the subject wage freezes (see Public Authorities Law § 3669[3]). Public Authorities Law § 3669(3) expressly provides for NIFA’s authority to declare a control period by enacting a resolution finding a fiscal crisis, and upon such finding, order that all increases in salary or wages of county employees be suspended. Control periods may be declared “at any time” (Public Authorities Law § 3669[1]). Matter of Carver v Nassau County Interim Fin. Auth., 2016 NY Slip Op 05995, 2nd Dept 9-14-16

MUNICIPAL LAW (COUNTY HAD AUTHORITY TO IMPOSE A WAGE FREEZE TO ADDRESS A FINANCIAL CRISIS)/EMPLOYMENT LAW (MUNICIPAL LAW, COUNTY HAD AUTHORITY TO IMPOSE A WAGE FREEZE TO ADDRESS A FINANCIAL CRISIS)/WAGE FREEZE (COUNTY HAD AUTHORITY TO IMPOSE A WAGE FREEZE TO ADDRESS A FINANCIAL CRISIS)

September 14, 2016

Employment Law, Negligence

QUESTION OF FACT WHETHER EMPLOYER VICARIOUSLY LIABLE FOR NEGLIGENCE OF AN INDEPENDENT CONTRACTOR.

The Second Department determined there was a question of fact whether the employer, Vertical, could be held vicariously liable for the actions of an independent contractor, On Guard. On Guard provided security for a parking lot owned by Vertical. Plaintiff was injured when struck by a remote-controlled toy car which was apparently being operated in the parking lot with a security guard’s knowledge:

“Generally, a party who retains an independent contractor, as distinguished from a mere employee or servant, is not liable for the independent contractor’s negligent acts'” … . “One of the exceptions to this general rule is the nondelegable duty exception, which is applicable where the party is under a duty to keep premises safe'” … . In such instances, the party ” is vicariously liable for the fault of the independent contractor because a legal duty is imposed on it which cannot be delegated'” … .

Here, the evidence submitted by the moving defendants raised triable issues of fact regarding whether On Guard was negligent in performing its security duties, and whether the moving defendants were vicariously liable for On Guard’s negligence based on their nondelegable duty to keep the premises safe… . Pesante v Vertical Indus. Dev. Corp., 2016 NY Slip Op 05854, 2nd Dept 8-24-16

NEGLIGENCE (QUESTION OF FACT WHETHER EMPLOYER VICARIOUSLY LIABLE FOR NEGLIGENCE OF AN INDEPENDENT CONTRACTOR)/EMPLOYMENT LAW (QUESTION OF FACT WHETHER EMPLOYER VICARIOUSLY LIABLE FOR NEGLIGENCE OF AN INDEPENDENT CONTRACTOR)/INDEPENDENT CONTRACTORS (QUESTION OF FACT WHETHER EMPLOYER VICARIOUSLY LIABLE FOR NEGLIGENCE OF AN INDEPENDENT CONTRACTOR)

August 24, 2016

Employment Law

PROVISIONS OF POLICY MANUAL DID NOT CONSTITUTE ENFORCEABLE OBLIGATIONS.

The Second Department, reversing Supreme Court, determined defendants’ summary judgment motion should have been granted. Plaintiff employee’s argued they were entitled to severance pay in accordance a policy manual. Policy manuals which can be amended or withdrawn unilaterally do not obligate the employer unless there is a regular practice and reliance:

Provisions contained in company policy manuals which, like the one in this case, can be amended or withdrawn unilaterally, do not constitute enforceable obligations owing from an employer to its employees absent a showing of a regular practice by the employer to provide the benefits now claimed, the employee’s knowledge of the practice, and his or her reliance upon such practice as evidenced by accepting or continuing employment as a result thereof … . Cohen v National Grid USA, 2016 NY Slip Op 05786, 1st Dept 8-17-16

EMPLOYMENT LAW (PROVISIONS OF POLICY MANUAL DID NOT CONSTITUTE ENFORCEABLE OBLIGATIONS)/POLICY MANUAL (EMPLOYMENT LAW, PROVISIONS OF POLICY MANUAL DID NOT CONSTITUTE ENFORCEABLE OBLIGATIONS)

August 17, 2016

Employment Law

OSTENSIBLE NON EMPLOYER WAS NOT A JOINT EMPLOYER SUBJECT TO EMPLOYMENT DISCRIMINATION LIABILITY; CRITERIA FOR JOINT EMPLOYER STATUS EXPLAINED.

The First Department determined defendant non employer was not a “joint employer” such that defendant could be liable for employment discrimination under the Human Rights Law. The court explained the “joint employer” criteria:

In determining whether an ostensible non employer is actually a “joint employer” for purposes of employment discrimination claims under the State and City Human Rights Laws (HRLs), numerous Federal District Courts have applied the “immediate control” test … . Under the “immediate control” formulation, a “joint employer relationship may be found to exist where there is sufficient evidence that the defendant had immediate control over the other company’s employees,” and particularly the defendant’s control “over the employee in setting the terms and conditions of the employee’s work.” “Relevant factors” in this exercise “include commonality of hiring, firing, discipline, pay, insurance, records, and supervision.” Of these factors, “the extent of the employer’s right to control the means and manner of the worker’s performance is the most important factor.” If such control is established, other factors “are then of marginal importance” … . Brankov v Hazzard, 2016 NY Slip Op 05778, 1st Dept 8-11-16

EMPLOYMENT LAW (DISCRIMINATION, OSTENSIBLE NON EMPLOYER WAS NOT A JOINT EMPLOYER SUBJECT TO EMPLOYMENT DISCRIMINATION LIABILITY; CRITERIA FOR JOINT EMPLOYER STATUS EXPLAINED)/JOINT RMPLOYER (EMPLOYMENT DISCRIMINATION, OSTENSIBLE NON EMPLOYER WAS NOT A JOINT EMPLOYER SUBJECT TO EMPLOYMENT DISCRIMINATION LIABILITY; CRITERIA FOR JOINT EMPLOYER STATUS EXPLAINED)/HUMAN RIGHTS LAW (DISCRIMINATION, OSTENSIBLE NON EMPLOYER WAS NOT A JOINT EMPLOYER SUBJECT TO EMPLOYMENT DISCRIMINATION LIABILITY; CRITERIA FOR JOINT EMPLOYER STATUS EXPLAINED)

August 11, 2016

Employment Law, Municipal Law

NO NOTICE OF CLAIM REQUIRED FOR RETALIATORY TERMINATION CLAIM PURSUANT TO CIVIL SERVICES LAW 75-b.

The First Department, reversing Supreme Court, determined (1) a retaliatory termination claim pursuant to Civil Services Law Section 75-b seeking only monetary damages is not subject to the notice of claim requirement of General Municipal Law Sections 50-e and 50-i; and (2), even if a notice of claim were required, the notice was adequate despite the failure to specifically mention a violation Civil Services Law Section 75-b:

… [W]e now find that a notice of claim is not required for a Civil Service Law § 75-b claim. As with the Human Rights Law claims that were the subject of Margerum, Civil Service Law § 75-b claims are not tort actions under 50-e and are not personal injury, wrongful death, or damage to personal property claims under 50-i, and there is no reason to encumber the filing of a retaliatory termination claim. * * *

Even if [a notice of claim] was required, the notice of claim filed by plaintiff was sufficient to allow the City to investigate his Civil Service Law § 75-b claim, even though it did not cite the section. Castro v City of New York, 2016 NY Slip Op 05615, 1st Dept 7-21-16

MUNICIPAL LAW (NO NOTICE OF CLAIM REQUIRED FOR RETALIATORY TERMINATION CLAIM PURSUANT TO CIVIL SERVICES LAW 75-b)/EMPLOYMENT LAW (MUNICIPAL LAW, NO NOTICE OF CLAIM REQUIRED FOR RETALIATORY TERMINATION CLAIM PURSUANT TO CIVIL SERVICES LAW 75-b)/RETALIATORY TERMINATION (MUNICIPAL LAW, NO NOTICE OF CLAIM REQUIRED FOR RETALIATORY TERMINATION CLAIM PURSUANT TO CIVIL SERVICES LAW 75-b)

July 20, 2016

Employment Law, Municipal Law, Negligence

NEGLIGENT RETENTION CAUSE OF ACTION PROPERLY DISMISSED.

The Fourth Department, over an extensive dissent, determined plaintiffs’ negligent hiring/retention cause of action against the city and city police department was properly dismissed. The action stemmed from incidents of sexual abuse by a police officer (O’Shei). It was alleged the officer should not have been retained after suffering brain injury:

Plaintiffs contend that the City defendants failed to do an appropriate evaluation of O’Shei’s neuropsychological status after the second motor vehicle accident. Recovery on a negligent retention theory “requires a showing that the employer was on notice of the relevant tortious propensit[y] of the wrongdoing employee” … , i.e., “that the employer knew or should have known of the employee’s propensity for the conduct which caused the injury” … . Thus, contrary to plaintiffs’ contention, the City defendants were under no common-law duty to institute specific procedures for supervising or retaining O’Shei inasmuch as they did not know of facts that would lead a reasonably prudent person to investigate the employee … .

* * * …[T]his is a retention case, and it is well settled that the common-law duty for retention does not require as high a degree of care as does hiring … . Pater v City of Buffalo, 2016 NY Slip Op 05462, 4th Dept 7-8-16

NEGLIGENCE (EMPLOYMENT LAW, NEGLIGENT RETENTION CAUSE OF ACTION PROPERLY DISMISSED)/EMPLOYMENT LAW (EMPLOYMENT LAW, NEGLIGENT RETENTION CAUSE OF ACTION PROPERLY DISMISSED)/MUNICIPAL LAW (POLICE OFFICERS, NEGLIGENT RETENTION CAUSE OF ACTION PROPERLY DISMISSED)/NEGLIGENT RETENTION (EMPLOYMENT LAW, NEGLIGENT RETENTION CAUSE OF ACTION PROPERLY DISMISSED)

July 8, 2016

Arbitration, Employment Law, Municipal Law

ARBITRATOR EXCEEDED HIS POWERS BY REFUSING TO REVIEW THE ENTIRE RECORD OF THE PROCEEDINGS, AWARD PROPERLY VACATED.

The Fourth Department, affirming Supreme Court, determined the arbitrator exceeded his powers vacation of the award was therefore proper. The arbitration concerned the termination of a deputy sheriff for driving while intoxicated and related charges. The arbitrator refused to consider some of the evidence (finding it inadmissible) and reinstated the deputy:

“Under CPLR 7511 (b) an arbitration award must be vacated if, as relevant here, a party’s rights were impaired by an arbitrator who exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made’ ” … . “It is well settled that a court may vacate an arbitration award only if it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power” … . “Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact’ ” … .

Here, we conclude that the arbitrator clearly exceeded his authority as provided by the CBA [collective bargaining agreement]. The CBA mandated that “[t]he arbitrator shall review the record of the disciplinary hearing and determine if the finding of guilt was based upon clear and convincing evidence.” Rather than comply with that mandate and review the record from the hearing, the arbitrator considered a portion of the record only, deciding to exclude certain evidence from his review. Having failed to review that which he was required to review, the court properly concluded that the arbitrator exceeded his authority and vacated the arbitration award … . Matter of O’Flynn (Monroe County Deputy Sheriffs’ Assn., Inc.), 2016 NY Slip Op 05261, 4th Dept 7-1-16

ARBITRATION (ARBITRATOR EXCEEDED HIS POWERS BY REFUSING TO REVIEW THE ENTIRE RECORD OF THE PROCEEDINGS, AWARD PROPERLY VACATED)/MUNICIPAL LAW (ARBITRATOR EXCEEDED HIS POWERS BY REFUSING TO REVIEW THE ENTIRE RECORD OF THE PROCEEDINGS, AWARD PROPERLY VACATED)/EMPLOYMENT LAW (ARBITRATOR EXCEEDED HIS POWERS BY REFUSING TO REVIEW THE ENTIRE RECORD OF THE PROCEEDINGS, AWARD PROPERLY VACATED)

July 1, 2016