Complaint by London-based trader alleging harassment by London and U.S. colleagues largely dismissed
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Monday, October 5, 2020

Complaint by London-based trader alleging harassment by London and U.S. colleagues largely dismissed

By Wayne D. Garris Jr., J.D.

During work trips to the United States, the employee alleged that her London and U.S. colleagues made inappropriate comments and sexual advances towards her.

A federal district court in New York dismissed the majority of claims brought by a London-based brokerage firm employee who alleged she was subjected to discrimination and harassment by her colleagues in London and the United States. The employee claimed that her supervisor and coworkers in London harassed her from the very beginning of her tenure and that her U.S. colleagues joined in the mistreatment during work trips to New York, Texas, and Connecticut and while she was back in London. The court held that a forum selection clause prevented the employee from seeking redress against her London employer and colleagues in federal district court; however, the employee’s state law discrimination claims arising from harassment during a week-long work trip to New York City could proceed against the employer’s sales director as well as her employer’s U.S. based subsidiary (Kraiem v. JonesTrading Institutional Services LLC, September 30, 2020, Carter, A.).

The employee worked as a trader for JonesTrading International Limited (JTIL), a foreign broker-dealer incorporated in England and Wales. JTIL is a wholly-owned subsidiary of JonesTrading Institutional Services (JTIS), a U.S. based company that does business in New York. The employee primarily worked for JTIL in its London office, but her employment contract indicated that she might be required to work outside of the U.K., however, for no more than one month.

Harassment. The employee alleged that from the beginning of her employment with JTIL, she was subjected to repeated sexual harassment from male colleagues, including senior managers. Her direct supervisor in the London office purportedly regularly made inappropriate comments about the employee, accused her of using her appearance to advance at work, and refused to assign her to U.S. clients despite assigning U.S. clients to her male colleagues. She also accused employees in the New York office of sharing photographs and videos that were sexual in nature.

Dallas. The employee attended a company event in Dallas, Texas, in April 2017. She alleged that during the trip, the sales director grabbed her, hugged her, made comments to other employees about her appearance, and tried to go to her hotel room. The employee complained to her supervisor about the director’s conduct but her supervisor allegedly "brushed off" her complaints.

Greenwich. About two weeks after the Dallas trip, the sales director told an employee in the Greenwich, Connecticut, office that the employee "was not his type." The employee’s supervisor allegedly said to the sales director that he "had heard otherwise" because the director had followed the employee to her hotel room.

New York. From July 10 to 16, 2017, the employee was on a trip to New York. She alleged that she was ostracized by her coworkers because of her complaint about the sales director and because her prior relationship with another coworker had become public knowledge. At a client dinner during the trip, the employee alleged that her supervisor introduced her to the client as "head of ‘fashion’ and ‘entertainment’ and ‘occasionally a trader.’" He also made inappropriate remarks about her dress. Later that week, the employee alleged that a client propositioned her while they were at a bar. The employee complained to the employer’s managing director who allegedly made jokes about the incident and took no action.

Termination. The employee asserted that her supervisor became more hostile after they returned to London from New York. In December 2017, the employer announced its plans to move to an office two hours away from London. The employee contended that this moved was initiated in order to constructively discharge her. On January 31, 2018, the employer sent the employee a revised contract stating its plans to relocate and conditioning her continued employment on her agreement to move. The employee refused to sign the contract and the employer terminated her employment.

Lawsuit. The employee filed suit against JTIS and JTIL alleging sex discrimination, hostile work environment, and retaliation in violation of Title VII and state law. The employee also brought claims against several JTIS and JTIL employees in their individual capacities. The defendants moved to dismiss.

Time-barred. As an initial matter, the court dismissed the employee’s Title VII claims for discrete acts of discrimination and relation arising from incidents in Dallas and Greenwich as untimely. However, her claim that the incidents in Dallas and Greenwich were part of a hostile work environment could proceed under the continuing violation doctrine.

Constructive discharge. The court then turned to the employee’s claim that JTIL constructively terminated her by moving its office outside of London. At issue was whether the employee was employed in the United States and, thus, protected by Title VII. Courts apply two tests to determine whether a non-U.S. citizen is employed in the United States. Under the "center of gravity" test, a court considers whether any employment relationship had, in fact, been created at the time of the alleged discrimination, and if so, "where that employment relationship was created and the terms of employment were negotiated; the intent of the parties concerning the place of employment; the actual or contemplated duties, benefits, and reporting relationships for the position at issue; the particular locations in which the plaintiff performed those employment duties and received those benefits; the relative duration of the employee's assignments in various locations; the parties' domiciles; and the place where the allegedly discriminatory conduct took place." Under the "primary workstation test" the court examines where the employee was specifically hired to work and perform primary work-related duties.

Although the Second Circuit has not yet adopted either test, the court found the employee failed to show she was employed in the United States under either. She was hired in London and based in the London office. While her contract acknowledged that she may be required to work outside of the United Kingdom, she would not be required to work outside of the United Kingdom, continuously, for more than one month. Furthermore, the majority of her contacts with the United States were via the Internet except for a few special events.

Harassment during New York trip. The employee brought claims under New York state and municipal law alleging harassment and retaliation during her July 2017 trip to New York City; harassment from colleagues located in New York City while she was in London; and the alleged negative effects on her future career prospects in New York. Allowing claims to proceed based on the employee’s hope to work in New York or on conduct by New York employees when the employee was not present would impermissibly broaden the scope of the NYSHRL and NYCHRL. The employee’s claims of harassment arising from incidents during her July 2017 trip could proceed as she was within the state and with employees who worked in New York. The court also dismissed the state and municipal law claims against individual JTIS and JTIL employees against whom the employee did not make specific allegations of harassment or retaliation. Thus, only her claims against her supervisor and the sales director remained.

Single employer. Next, the court examined whether the employee had adequately pled that JTIS was her employer despite the lack of a formal employment relationship. The employee alleged that JTIS was a single employer with JTIL; JTIS and JTIL employees worked closely together on a daily basis, supported the same clients and accounts, and reported to the same supervisors; the companies had the same HR consultant; JTIS employees were involved in JTIL personnel decisions; and the JTIS and JTIL are owned by the same holding company. Based on this evidence, the court was persuaded that JTIL and JTIS were a single employer at the motion to dismiss stage.

Retaliation. At issue in her retaliation claim was whether the employee sufficiently pleaded retaliation as to each of the remaining defendants. She alleged that after she complained about the sales director’s conduct at the Dallas meeting, she was ostracized by her colleagues and that her supervisor and sales director mistreated her during client meetings in New York. The court found that the allegations of mistreatment by her colleagues were sufficient to sustain her retaliation claim against JTIS and JTIL. However, the allegations against her supervisor and sales director were indicative of the discrimination and harassment that she had been subjected to prior to her complaint so there was no evidence of a causal connection between her complaints about the Dallas trip. Thus, the court dismissed the retaliation claims against the individual defendants.

Forum Non-Conveniens. The employee’s contract with JTIL stated that the law of England and Wales governed and that the parties agreed to "submit to the exclusive jurisdiction of the English courts." In order to determine the impact of the forum selection clause, the court had to consider (1) whether the clause covers the employee’s discrimination and retaliation claims; (2) if so, which defendants may enforce the clause, and; (3) whether enforcing the clause would violate an important public policy of this forum.

The court concluded that the clause covered the employee’s claims because there was no dispute that the clause was reasonably communicated to her or that it was mandatory. Further, there was nothing in the contract that expressly excluded harassment, discrimination, or retaliation claims from the forum selection clause, thus the employee’s claims were included. However, only JTIL and its employees could invoke the forum selection clause as JTIS was not a party to the contract. Lastly, the court found that no public policy violation would result from enforcement of the clause. As a result, the claims against JTIL and its employees were dismissed on forum non-conveniens grounds.

The case is No. 1:19-cv-05160.

Attorneys: Zachary Russell Bergman (Stulberg & Walsh) for Nefissa Kraiem. Joan M. Gilbride (Kaufman, Borgeest & Ryan) for JonesTrading Institutional Services LLC and JonesTrading International Ltd.

Companies: JonesTrading Institutional Services LLC; JonesTrading International Ltd.

Cases: Discrimination SexDiscrimination SexualHarassment Retaliation Procedure GCNNews NewYorkNews

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