Employment Law Daily Federal punitive damages standard should not have been applied to NYCHRL pregnancy bias claim
Tuesday, March 20, 2018

Federal punitive damages standard should not have been applied to NYCHRL pregnancy bias claim

By Kathleen Kapusta, J.D., Lorene D. Park, J.D., and Marjorie Johnson, J.D.

Vacating a federal district court’s denial of a plaintiff’s request for a jury instruction on punitive damages for pregnancy discrimination under the New York City Human Rights Law (NYCHRL), the Second Circuit explained that because the state’s highest court, on certified question, expressly rejected application of the federal standard for punitive damages under the NYCHRL, the lower court erred in applying the federal test. The case was remanded for further proceedings consistent with the opinion (Chauca v. Abraham, March 16, 2018, per curiam).

Fired after maternity leave. According to the employee, when she tried to return from maternity leave, she got the “runaround” from several managers and was eventually told by the office manager that “we no longer need your services.” Her supervisors later claimed that she was not brought back because of a business slowdown and changes following healthcare reform. She countered, however, that nobody else had been laid off and that at least three other pregnant women had been unlawfully terminated. After she filed her EEOC charge, the office manager explained that she was not invited back because “she decide[d] to sue me.”

Jury instruction, verdict. The employee filed suit for sex and pregnancy discrimination under Title VII, state law, and the NYCHRL, and her case went to trial. Before it was submitted to the jury, the district court denied her request for a jury instruction on punitive damages under the NYCHRL based on its determination that she failed to show her employer intentionally discriminated against her with malice or reckless indifference to her protected rights, thus impliedly applying the standard under Title VII. The jury returned a verdict in her favor, $10,500 in compensatory damages and $50,000 in pain and suffering.

Certified question on punitives. On appeal to the Second Circuit, the employee argued that the district court erred in importing the Title VII standard. Noting the NYCHRL “does not articulate a standard for a finding of employer or employee liability for punitive damages,” the federal appeals court acknowledged that passage of the 2005 Local Civil Rights Restoration Act and subsequent related amendments, which called for a liberal construction of all provisions of the NYCHRL in all circumstances, called into question its 2001 holding in Farias v. Instructional Systems, Inc., that Title VII’s standard for punitive damages applies to the NYCHRL.

Accordingly, the Second Circuit certified to New York’s highest court the following question: “What is the standard for finding a defendant liable for punitive damages under the New York City Human Rights Law?” The state high court responded that the standard for punitive damages under the NYCHRL is whether the wrongdoer has engaged in discrimination with willful or wanton negligence, or recklessness, or a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.

Vacated and remanded. This response, noted the federal appeals court, “expressly rejected the application of the federal standard for punitive damages, explaining that the NYCHRL ‘requires neither a showing of malice nor awareness of the violation of a protected right’ because ‘implementing a lower degree of culpability and eschewing the knowledge requirement’” adheres to the city council’s liberal construction mandate that the provisions of the NYCHRL “shall be construed liberally… regardless of whether federal or New York state civil and human rights laws… have been so construed.”

In light of the state high court’s response, the Second Circuit held that the federal district court did not apply the proper standard in declining to submit the question of punitive damages to the jury. Accordingly, the judgment was vacated and the case remanded for further proceedings consistent with the appellate court’s decision.

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