Former Employee’s Retaliation Claim Sufficiently Alleged, Court Holds

In a recent decision, captioned Calhoun v. Laidlaw & Company, 20-CV-6174 (S.D.N.Y. Dec. 18, 2020) (provided via teleconference; here is the transcript), the court held that plaintiff sufficiently alleged retaliation under the New York State and City Human Rights Laws.

It was undisputed that the plaintiff sufficiently alleged that he engaged in “protected activity”, namely, that he “reported on the discriminatory conduct that led to his termination and filed a lawsuit that was the subject of his settlement with the defendant.”

It also explained that the anti-retaliation provisions of the statutes apply to former employees, such as the plaintiff here.

The court explained that for a retaliation claim, an “adverse employment action” is one that “is any action that could well dissuade a reasonable worker from making or supporting a charge of discrimination” (and not a “materially adverse change in the terms and conditions of employment”, which is the standard applicable for so-called “status based” discrimination claims).

Here, plaintiff sufficiently pleaded an “adverse employment action”:

The complaint pleads that defendant withheld $125,000 that was otherwise due to him. Being deprived of a six-figure payment to which a worker is otherwise entitled is something that well might deter that reasonable worker from making or supporting a charge of discrimination. Defendant argues that “plaintiff has not alleged, argued, or even identified a single manner by which the withholding would deter anyone else from engaging in the protected activity of complaining of discrimination.” Reply at 5. But it is not difficult to infer how being deprived of $125,000 or the threat of being deprived of such an amount would affect a worker’s willingness to engage in protected activity. That’s a lot of money to lose as a result of challenging discrimination — even in the finance industry — separate and apart from the cost and strain of continuing litigation to seek its repayment. To plausibly plead a retaliation claim under the NYCHRL, the plaintiff must plausibly allege that “the employer engaged in conduct that was reasonably likely to deter a person from engaging in such action.” Mihalik, 715 F.3d at 112 (citing Albunio, 16 N.Y.3d at 479; Williams, 872 N.Y.S.2d at 33–34). “The NYCHRL imposes an identical standard to that of the NYSHRL, except that the plaintiff need not [allege] any ‘adverse’ employment action; instead, she must prove that something happened that would be reasonably likely to deter a person from engaging in protected activity.” Benzinger v. Lukoil Pan Americas, LLC, 447 F. Supp. 3d 99, 129 (S.D.N.Y. 2020) (quotation and brackets omitted). For the same reasons that the allegations in the complaint satisfy this requirement of the NYSHRL, they are sufficient to satisfy the pleading requirement under the NYCHRL.

Finally, the court explained that plaintiff sufficiently alleged a causal connection between the “protected activity” and the “adverse action”, even under the higher “but for” causation standard applicable under Title VII. (The court specifically declined to hold what standard – the higher “but for” standard or the lower “motivating factor” standard applicable under the NYC Human Rights Law – applies to the New York State Human Rights Law, which was amended in 2019 to broaden its scope.)

Applying the law to the facts, the court explained:

First off, plaintiff’s complaint describes the fact that he reached a settlement of allegations that the company had discriminated against him as an employee. Complaint paragraph 6. Those facts support a causal inference based on the discriminatory motivations of defendant’s management — the discriminatory conduct that was the basis for the lawsuit and the substantial settlement that resulted from it.

Second, the retaliatory conduct took place approximately seven months after plaintiff’s protected activity — close enough in time to give rise to an inference of a causal connection.

Third, the nature of defendant’s conduct itself strongly supports a causal link. As alleged, defendant negotiated a settlement. During the discussions, the prospect of a holdback for the client claim was specifically discussed and rejected. Id. at paragraphs 13, 17-42.

On December 20, 2019, less than one month after the parties finalized their agreement, defendant reneged on the deal point that was the subject of direct negotiation and withheld $125,000 from Plaintiff. Id. at paragraph 62.

It is easy to draw the inference from this set of facts that but for an intention to retaliate, defendant would not have acted as it did. What legitimate reason was there for defendant to renege on its contractual obligation? The justification asserted by defendant for its conduct as pleaded — a desire to cash collateralize the contingent obligation for a settlement in principle with the client — is weak tea, particularly given the other facts pleaded, including the nature of defendant’s business and the fact that plaintiff would have been flush with cash to make good on his obligations after payment of the settlement amount.

Defendant’s intentional decision to violate a contractual obligation, coupled with its weak justification, further demonstrate that plaintiff sufficiently pleaded the conduct was, in fact, a reaction to plaintiff’s protected activity.

This decision is also noteworthy because it expresses the Judge’s observation that “Defendant’s motion is profoundly flawed” and “[t]he opening brief ignored and misstated basic principles of law”, leading the Court to decline to “conclude that the motion was frivolous” (and that sanctions were not warranted) but that “it came close to the line.”

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