First Department, September 6, 2018

Morse v Fidessa Corp., 57 Misc 3d 653, affirmed.

Fox Rothschild LLP, New York City (Daniel A. Schnapp and Gregg M. Kligman of counsel), for appellants.

Mark L. Lubelsky & Associates, New York City (Mark L. Lubelsky and Josef K. Mensah of counsel), for respondent.

At issue in this matter of first impression is whether the New York City Human Rights Law's (City HRL) prohibition against discrimination based on "marital status" encompasses a prohibition against discrimination on the basis of the identity of a person's spouse. In light of the uniquely broad and remedial purposes of the City HRL, we hold that "marital status" must be given a broader meaning than simply married or not married, and that it must encompass other factors that may be used to deem the relationship "disqualifying," i.e., unacceptable. Accordingly, the complaint before us, which alleges that defendant Fidessa Corporation terminated plaintiff's employment after an employee who Fidessa believed was married to plaintiff left its employ, states a cause of action for discrimination under the City HRL.

I. Facts

Fidessa Corporation is a financial services company. Plaintiff, a former Fidessa employee, asserted a violation of the New York City Human Rights Law (Administrative Code of City of NY § 8-107 et seq.) by alleging that he was suspended and then fired by Fidessa [*2]because a co-employee, Lael Wakefield, whom Fidessa perceived to be plaintiff's spouse and with whom plaintiff had two children, had left Fidessa to work for another financial services firm. Plaintiff also alleged that he was told that he was fired because of this perceived marital relationship, and that, if he divorced Wakefield, he would be reconsidered{**165 AD3d at 63} for re-employment.^[FN1] Plaintiff identified a comparator: an unmarried couple where both partners initially worked for Fidessa, and one left to work for a different financial services firm, but the partner who remained at Fidessa was neither suspended nor fired.

Defendants moved to dismiss the complaint on the ground that the City HRL's protection did not extend to employment decisions based on the identity of the employee's partner or spouse, but only on the basis of whether he or she was married or not. The motion court denied the motion (57 Misc 3d 653 [2017]). We now affirm.

II. Discrimination on the Basis of Marital Status

The City HRL states, in relevant part:

"It shall be an unlawful discriminatory practice:

"(a) For an employer or an employee or agent thereof, because of the actual or perceived . . . marital status . . . of any person: . . .

"(2) To refuse to hire or employ or to bar or to discharge from employment such person; or

"(3) To discriminate against such person in compensation or in terms, conditions or privileges of employment" (Administrative Code § 8-107 [1]).

From the complaint it appears that Fidessa treated plaintiff and his partner differently from the aforementioned similarly situated couple based on its perception that they were married to one another and the members of the other couple were not. Thus, the question is whether discrimination based on "marital status" encompasses discrimination based on marital status in relation to a person relevant to Fidessa. In other words, is an employer prohibited from discharging an employee because of the employee's marriage to a particular person.

For the purposes of this analysis, the fact that defendant was not alleged to be "biased against" married couples in all circumstances is of no moment: the factor in terminating plaintiff's employment was plaintiff's marital status in relation to the employee who left the company. Thus, plaintiff's termination was based on his marital status.{**165 AD3d at 64}

Before the passage of the Local Civil Rights Restoration Act of 2005 (Local Law No. 85 [2005] of City of NY) (the Restoration Act), the Court of Appeals had resolved the above-stated question—without recourse to liberal construction analysis—by holding that "a distinction must be made between the complainant's marital status as such, and the existence of the complainant's disqualifying relationship—or absence thereof—with another person" (see Levin v Yeshiva Univ., 96 NY2d 484, 490 [2001] [a housing discrimination case]). In Levin, the "disqualifying relationship" was one that was not a "legally recognized, family relationship[ ]" (id. at 490-491). Thus, if a housing provider refused to rent to an unmarried person, regardless of whether the unmarried person was living with another person, its conduct would be actionable. However, if the housing provider treated an unmarried couple disadvantageously, that would not be actionable because the disadvantageous treatment would not be based on the couple's marital status but on the disqualifying relationship (not being a "legally recognized, family relationship[ ]").

[*3]Levin's holding was derived from Matter of Manhattan Pizza Hut v New York State Human Rights Appeal Bd. (51 NY2d 506 [1980]), an employment discrimination case brought under the New York State Human Rights Law, not the City HRL. Manhattan Pizza Hut ruled that the "plain and ordinary meaning of 'marital status' is the social condition enjoyed by an individual by reason of his or her having participated or failed to participate in a marriage" (51 NY2d at 511). That is, "when one is queried about one's 'marital status', the usual and complete answer would be expected to be a choice among 'married', 'single', etc., but would not be expected to include an identification of one's present or former spouse and certainly not the spouse's occupation" (id. at 511-512).

The Restoration Act changed the judicial landscape with respect to the City HRL. A more recent enactment, Local Law No. 35 (2016) of City of New York, went even further. That law amended Administrative Code § 8-130 ("Construction") "to provide additional guidance for the development of an independent body of jurisprudence for the New York city human rights law that is maximally protective of civil rights in all circumstances" (Local Law 35 § 1).

{**165 AD3d at 65}In the March 8, 2016 report of the Committee on Civil Rights that accompanied Local Law 35 (the Committee Report),^[FN2] the Council set forth its concerns:

"Over at least the last 25 years, the Council has sought to protect the HRL from being narrowly construed by courts, particularly through major legislation adopted in 1991 and 2005. These actions have expressed a very specific vision: a Human Rights Law designed as a law enforcement tool with no tolerance for discrimination in public life. The 2005 Restoration Act provided that the HRL is to be interpreted liberally and independently of similar federal and state provisions to fulfill the 'uniquely broad and remedial' purposes of the law. The Act amended the HRL's liberal construction provision, Administrative Code § 8-130, to accomplish this goal. Some courts have recognized and followed this vision, but others have not, and many areas of the law remain as they were before the 2005 Restoration Act because they have not been scrutinized to determine whether they are consistent with the uniquely broad requirements of the HRL" (Committee Report of the Governmental Affairs Division, Committee on Civil Rights at 8 [Mar. 8, 2016] [emphasis added]).

The amendment included ratification of three decisions under the City HRL: Albunio v City of New York (16 NY3d 472 [2011]); Bennett v Health Mgt. Sys., Inc. (92 AD3d 29 [1st Dept 2011], lv denied 18 NY3d 811 [2012]); and Williams v New York City Hous. Auth. (61 AD3d 62 [1st Dept 2009], lv denied 13 NY3d 702 [2009]) (hereinafter the Committee Report cases) (Administrative Code § 8-130 [c]). Each of the cases was described as having "correctly understood and analyzed the liberal construction requirement" of the City HRL, and as having "developed legal doctrines accordingly that reflect the broad and remedial purposes" of the City HRL (id.). To ignore or deviate from any of the Committee Report cases would be to flout the Council's intent as to the City HRL.{**165 AD3d at 66}

The Committee Report elaborated thus:

"These cases do not just establish specific ways in which the HRL differs from its federal and state counterparts; they also illustrate a correct approach to liberal construction analysis and then develop legal doctrine accordingly. It is therefore important for courts to examine the reasoning of the cases—including their extensive discussions of why the U.S. Supreme Court's analysis can be inadequate to serve the purposes of the HRL—and then for courts to employ that [*4]kind of reasoning when tackling other interpretative problems that arise under the HRL. Finally, Int. No. 814-A [an earlier version of the bill] would remind courts that legal doctrine might need to be revised to comport with the requirements of § 8-130 of the Administrative Code" (Committee Report at 12-13).

Among other examples of the correct approach to enhanced liberal construction analysis under the Restoration Act, the Council quoted the following language from Williams:

"[T]he Restoration Act notified courts that (a) they had to be aware that some provisions of the City HRL were textually distinct from its state and federal counterparts, (b) all provisions of the City HRL required independent construction to accomplish the law's uniquely broad purposes, and (c) cases that had failed to respect these differences were being legislatively overruled" (Committee Report at 10-11; see Williams, 61 AD3d at 67-68).

Before the Restoration Act was enacted, there were few cases that distinguished between the City HRL and its state or federal counterpart, and the City HRL was not viewed as having "uniquely" broad purposes. Eleven years later, the Council was insisting that the "legislative overrule" be given effect.

Critically, the Council quoted Williams approvingly with respect to the purpose of the construction provision (Administrative Code § 8-130):

"The [Williams] court wrote that the liberal construction provision was envisioned as 'obviating the need for wholesale textual revision of the myriad specific substantive provisions of the law.' As the court further explained, 'While the specific topical {**165 AD3d at 67}provisions changed by the Restoration Act give unmistakable illustrations of the Council's focus on broadening coverage, section 8-130's specific construction provision required a "process of reflection and reconsideration" that was intended to allow independent development of the local law "in all its dimensions." '

"Thus, 'areas of law that have been settled by virtue of interpretations of federal or state law "will now be reopened for argument and analysis . . . . As such, advocates will be able to argue afresh (or for the first time) a wide range of issues under the City's Human Rights Law . . . ." ' The Williams court found that the HRL's text and legislative history represent a legislative desire that the HRL ' "meld the broadest vision of social justice with the strongest law enforcement deterrent" ' " (Committee Report at 11; see Williams, 61 AD3d at 74, 77 n 24, 68).

Thus, courts must play a highly active role in the development of the City HRL by interpreting all cases in a manner consistent with the goal of providing unparalleled strength in deterring and remedying discrimination. As the Court of Appeals ruled in Albunio (16 NY3d 472), one of the Committee Report cases, all the provisions of the City HRL must be construed "broadly in favor of discrimination plaintiffs, to the extent that such a construction is reasonably possible" (16 NY3d at 477-478).

Our task in construing the term "marital status" is guided by the above-stated history. Levin v Yeshiva Univ. (96 NY2d 484 [2001]) relied in part on an interpretation of the New York State Human Rights Law and failed to engage in liberal construction analysis, let alone the enhanced liberal construction analysis intended by the comprehensive 1991 amendments to the City HRL (Local Law No. 39 [1991] of City of NY) (which were only brought to life in 2005, with the passage of the Restoration Act). Thus, Levin's interpretation of "marital status" cannot be sustained.

Indeed, Levin was cited in connection with the passage of the Restoration Act as illustrative of the cases that had " 'either failed to interpret the City Human Rights Law to fulfill its{**165 AD3d at 68} uniquely broad purposes, ignore [sic] the text of specific provisions of the law, or both' " (Williams, 61 AD3d at 67 [quoting from transcript of Council debate]). With the passage of the [*5]Restoration Act, Levin " 'and others like [it] . . . will no longer hinder the vindication of our civil rights' " (id. [quoting from debate transcript]).

Plainly, the Council rejected the "plain and ordinary" meaning of "marital status" as set forth in Manhattan Pizza Hut (51 NY2d at 511-512) and consequently the distinction between marital status as such and marital status as a "disqualifying relationship."

"Marital status" may refer to whether an individual is married or not married. It may also refer to whether two individuals are married to each other or not married to each other. In the instant case, it refers to the latter: the marital status of two people in relation to each other.

Enhanced liberal construction analysis is not only required to fulfill the intent of the City HRL but also aids in determining the "plain meaning" of the statutory language.

Encompassing the marital status of two people vis-…-vis one another within the meaning of the term "marital status" is, at minimum, a reasonable construction (see e.g. Smith v Fair Empl. & Hous. Commn., 12 Cal 4th 1143, 1155, 913 P2d 909, 915 [1996] [according to "(t)he usual and ordinary meaning of the words 'marital status,' as applied to two prospective tenants, (the rule) is that a landlord may not ask them whether they are married or refuse to rent to them because they are, or are not" (footnote omitted)], cert denied 521 US 1129 [1997]). As the most plaintiff-friendly reasonable interpretation, it is the one that must be adopted (Albunio, 16 NY3d at 477-478).

It is also the interpretation that accords with the purposes of the City HRL and the best means of achieving those purposes. Looking to Williams for guidance, as required by Local Law 35, we find that Williams concluded that it was not appropriate to require sexual harassment to be "severe or pervasive" before it could be actionable under the City HRL, in contrast to federal and state human rights laws, because that would mean that discrimination was "allowed to play some significant role in the workplace" (61 AD3d at 76), and that state of affairs would run counter to the City HRL's mandate that discrimination be allowed to play no role.

Applying that reasoning to discrimination based on marital status, a narrow interpretation of "marital status" would allow {**165 AD3d at 69}a wide range of discriminatory conduct—including conduct arising out of assumptions based on stereotypes—to continue unabated. Only a broader interpretation of marital status will further the "play no role" standard.

Williams also reasoned that a broader liability standard (i.e., not excusing harassment that was less than "severe or pervasive") would maximize the deterrent effect of the law, a required consideration (id.). Indeed, this consideration was reemphasized by Local Law 35, which provided that exemptions from and exceptions to the law shall be construed narrowly "in order to maximize deterrence of discriminatory conduct" (Administrative Code § 8-130 [b]). Similarly, interpreting "marital status" to include the marital status of two people in relation to one another will maximize deterrence of discrimination based on marital status.

It is important to think in terms of the City HRL's ultimate object. The goal of discrimination law is to move decision-makers away from using protected class status as a proxy for rules unrelated to such status and toward determinations that can properly be made. For example, an employer can, within limits not relevant here, prohibit business-related communications between any of its employees and any employees of another employer in the same field. If marital status ever was a legitimate proxy for a rule for protecting company secrets,^[FN3] it is not an acceptable proxy now given today's social reality, as reflected in a variety of [*6]intimate relationships, including those of unmarried couples. The broader interpretation of marital status that we adopt today will encourage covered entities to think seriously about their substantive concerns and tailor their policies to those legitimate concerns and not implicate protected class status.

Finally, the testimony of the Anti-Discrimination Center of Metro New York, Inc. was described by a council member at the time of the consideration and passage of the Restoration Act as "an excellent guide to the intent and consequences" of the Restoration Act (Williams, 61 AD3d at 68 n 7 [internal quotation marks omitted]).^[FN4] This testimony provides important confirmation that enhanced liberal interpretation was contemplated to yield the result that a couple's marital status in relation{**165 AD3d at 70} to one another should not be permitted to be a basis for action by a covered entity. The testimony expressly cited Levin, describing it as "the case that held that discrimination against unmarried couples somehow does not constitute intentional discrimination on the basis of marital status" (Testimony of Craig Gurian regarding Intro 22A, the Local Civil Rights Restoration Act Comm on Gen Welfare, Apr. 14, 2005, at 1-2, available at http://www.antibiaslaw.com/sites/default/files/all/CenterTestimony041405.pdf, cached at http://www.nycourts.gov/reporter/webdocs/CenterTestimony041405.pdf), as a reason for amending the City HRL to insure its independent construction with a view toward how best to further the "especially broad purposes" of the law (id. at 1).