United States: New York Appellate Court Defines Summary Judgment Standard For New York City Human Rights Law Claims

For the first time, a New York appellate court has outlined the evidentiary burden an employer must satisfy to win a New York City Human Rights Law claim at summary judgment. The result: more employees will have the opportunity to proceed to trial.

The New York City Human Rights Law (NYCHRL), which is applicable to New York City employers with four or more employees, is often considered the broadest anti-discrimination statute in the nation, and it explicitly requires courts to apply an independent liberal analysis in interpreting its provisions to fulfill its uniquely broad and remedial purposes. This requirement has led courts to construe the NYCHRL's provisions "broadly in favor of discrimination plaintiffs" by allowing their NYCHRL claims to survive an employer's attack even where their state and federal discrimination claims fail. Summary judgment is key to litigating these claims because, if granted, an employer may avoid trial, a particularly valuable strategic tool for an employer facing an unpredictable jury.

In the typical employment discrimination case, a court on summary judgment will apply the three-step burden-shifting approach set forth in the United States Supreme Court's McDonnell-Douglas case. This approach requires that an employee make a prima facie (initial, but rebuttable) case of discrimination, which includes a demonstration that the employee is part of a class protected from discrimination and that the employer took an adverse action against the employee under circumstances giving rise to an inference of discrimination (e.g., termination because of race). Once an employee meets this burden, the burden then shifts to the employer to demonstrate a legitimate, non-discriminatory reason or reasons for the adverse action (e.g., termination for poor performance, not because of race). If the employer satisfies its burden, then the burden shifts back to the employee to show that (1) the employer's reason was pretextual — that is, the employer's reason was false, incomplete, or misleading; or (2) in "mixed motive" discrimination cases — cases where the employer has multiple motives for its adverse action — at least one of the employer's motives was discriminatory.

Last week, in Bennett v. Health Management Systems, Inc., the First Department (a New York State intermediary appeals court, which has been the leading voice on the interpretation of the NYCHRL), examined, for the first time, an employer's evidentiary burden at the summary judgment stage of an NYCHRL claim. This analysis included whether the First Department needed to modify the McDonnell-Douglas burden-shifting framework to ensure that courts would apply the framework in a way — "especially in the summary judgment context" — that would not "undercut the [NYCHRL's] intent to maximize the opportunities for discrimination to be exposed." Such an examination was long overdue, the First Department stated, especially in light of the "growing emphasis on using summary judgment in discrimination cases to promote 'judicial efficiency'" — a goal that runs contrary to the NYCHRL's central purpose to "resist efforts to ratchet down or devalue the means by which those intended to be protected by the [NYCHRL] could be most strongly protected."

Ultimately, the First Department left the burden-shifting framework intact, choosing instead to craft an opinion that acts as a guide for courts attempting to apply that framework on NYCHRL summary judgment motions.

The appeals court essentially directed courts not to focus on the first step — the employee's prima facie case. All the court has to ask is whether the initial facts set forth by the employee, even if not otherwise explained, gives rise to an inference of discrimination. If the answer to that question is yes, then the employee has made a prima facie case and the court may move on to the next step.

After the employer satisfies the second step — that is, it demonstrates a legitimate, non-discriminatory reason for the adverse action, the Bennett court cautioned courts against revisiting the plaintiff's prima facie case, and instead directed them to focus on whether the employee can thereafter meet his or her evidentiary burden to show that that the reason the employer offered was pretextual or that discrimination was a motivating factor in the employer's decision.

If an employee makes this final showing, it "should in almost every case indicate to the court that a motion for summary judgment must be denied." This result, the First Department concluded, comports with the notion that summary judgment is an "extraordinary remedy" in anti-discrimination cases because the employer's intent is ordinarily at issue and proof of such intent is typically indirect.

Applying these principals to the claims in Bennett, the appellate court affirmed the trial court's order granting summary judgment because the employee in that case failed to offer any evidence of pretext or any evidence that the employer's decision was at least in part motivated by discrimination. The practical effect of the First Department's decision, however, will likely result in courts granting fewer employer summary judgment motions on NYCHRL claims.

Given the broad NYCHRL interpretations, and the litigation value of winning discrimination cases at the summary judgment stage, employers should consider the following:

• Document, document, document. Documenting employee performance issues remains the employer's best chance of succeeding on a summary judgment motion and, if necessary, at trial. Employers should not wait until an employee's annual performance review to document and communicate performance issues; rather, they should also do so when setting performance goals for the employee, and then periodically revisit those goals. Employers should document performance issues on an as-needed basis throughout the year and not wait for an annual review to do so. That way, if litigation should arise, an employer will be armed with the evidence necessary to prevail.
• Given the likelihood that employment discrimination claims under the NYCHRL will move beyond the summary judgment stage, employers should strongly consider obtaining pre-dispute jury waivers (or arbitration agreements) from their employees, because trying a case before a judge (or arbitrator, if an arbitration agreement is in place) instead of a jury has several advantages for employers: they take less time and money, and studies suggest that employers are twice as likely to prevail, and if they lose, the employee typically will likely receive a substantially lower damage award.
• And, of course, the best way to avoid discrimination claims is to prevent discrimination in the first place. To do so, employers should create broad, or broaden their existing, non-discrimination/non-harassment policies, distribute these policies (at least annually) to new hires and existing employees, require in-person review and acknowledgement of these policies, provide the employee with the opportunity to ask questions regarding these policies; and ensure that these policies include workable complaint mechanisms and investigation procedures.
• A key to prevention is training: employers should also develop and implement comprehensive and regular non-discrimination/non-harassment training programs for all employees, managerial, supervisory or otherwise, and ensure that managers and supervisors can recognize, process and correct discriminatory behavior.

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