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Court September 30, 2008

PUNITIVE DAMAGES IN NEW YORK EMPLOYMENT DISCRIMINATION CASES


Posted by Marc Rapaport

In employment discrimination cases, punitive damages play an unusually prominent role. In many instances, the amount of punitive damages awarded by juries exceeds the amount of compensatory damages. This is particularly true under the New York City Human Rights Law, which is among the most liberal anti-discrimination statutes in the United States.

Although a defendant may mitigate punitive damages by proving to a jury that it had an effected anti-harassment policy which it effectively communicated to plaintiffs, unlike federal law, there is no special state of mind under the New York City Human Rights Law that must be proved to hold defendant liable for punitive damages.

In Kolstad case, the Supreme Court construed the meaning of 42 USC §1981a(b)(1) which provides that punitive damages may only be awarded under Title VII when "respondent engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual."

The City Law does not contain such a requirement. Instead, it sets out a set of criteria which "shall be considered in mitigation of the amount of...punitive damages which may be imposed..." 8-107(13)(e). Those criteria are that the defendant:
  1. Established and complied with policies, programs and procedures for the prevention and detection of unlawful discriminatory practices by employees, agents and persons employed as independent contractors, including but not limited to:
    1. A meaningful and responsive procedure for investigating complaints of discriminatory practices by employees, agents and persons employed as independent contractors and for taking appropriate action against those persons who are found to have engaged in such practices;

    2. A firm policy against such practices which is effectively communicated to employees, agents and persons employed as independent contractors;

    3. A program to educate employees and agents about unlawful discriminatory practices under local, state and federal law; and

    4. Procedures for the supervision of employees and agents and for the oversight of persons employed as independent contractors specifically directed at the prevention and detection of such practices; and

  2. A record of no, or relatively few, prior incidences of discriminatory conduct by such employee, agent or person employed as an independent contractor or other employees, agents or persons employed as independent contractors.
These criteria are for the jury to weigh. There is no safe harbor under which a defendant may remove punitive damages from a case. The New York City Council gave the NYC Human Rights Commission the power to create a safe harbor by establishing "policies, programs and procedures" for the "prevention and detection of discrimination by employees," 8-107(13)(f), but the Commission has never utilized such power.

The author of the City Law and the Restoration Act, Prof. Craig Gurian, noted:

Given the City Human Rights Law's overriding concern that covered entities be made to recognize the seriousness with which they must take their obligations, advocates will likely question why a defendant who recklessly disregards the risk that its conduct will harm the plaintiff should not, as a matter of local law, be liable for punitive damages. Such conduct is blameworthy regardless of whether the defendant is disregarding, as required by Kolstad, a known risk of violating the law.

A Return to Eyes on the Prize: Litigating Under the Restored New York City Human Rights Law, 33 Fordham Urb.L.J.255, 318 (2006).

Since the passage of the Restoration Act in 2005 it has been widely accepted that the City Law should be interpreted more liberally than similar federal statutes. Simmons v. New York City Transit Authority, 2008 WL 2788755, 2 (E.D.N.Y.) (E.D.N.Y., 2008) ("should be 'construed independently from similar or identical provisions of New York State or federal statutes.' N.Y.C. Local Law No. 85 § 1 (Oct 3, 2005); Hanna v. New York Hotel Trades Council, 18 Misc.3d 436, 438, 851 N.Y.S.2d 818, 822 (N.Y.Sup. 2007)("The Court notes the New York City Council policy that NYCHRL is to be liberally and independently construed with the aim of making it more protective than its federal (Title VII of the Civil Rights Act of 1964)...counterpart..."); Krist v. OppenheimerFunds, Inc., 2007 WL 4624023, 4 (N.Y.Sup.) (N.Y. Sup.,2007)("NYCHRL § 8-107, et seq., as amended by the Local Civil Rights Restoration Act of 2005, is required to be construed liberally").

In actual practice, most judges in NewYork are skeptical of a jury award of punitive damages in excess of a multiple of four times compensatory plus economic damages in the absence of conduct which is extremely reprehensible. However, there are cases which have upheld awards of close to the maximum of a ten-to-one ratio.

A case which involves a seriously abusive hostile work environment can produce a constitutionally permissible seven figure punitive damages award for a single plaintiff. In Gallegos v. Elite Model Mgmt. Corp., 781 N.Y.S. 2d 624, 2004 WL 51604, 2004 N.Y. Slip Op. 50000(U), 5 (N.Y. Sup. 2004) (discussed above), the trial court sustained a $2.6 million punitive damages award under the City Law. The court explained:

The evidence adduced at trial was certainly sufficient to justify an award of punitive damages. Under State Farm v. Campbell, 538 US 408, 155 L.Ed2d 585 [ 2003], due process considerations make it necessary to consider the fairness of the awards. The most important consideration is the reprehensibility of the conduct. The repeated failure to observe the non-smoking law in the light of petitioner's [asthma] and the tolerance of cruel practical jokes evinced a reckless disregard for the plaintiff's physical health and was reprehensible, We are also instructed to consider the disparity between the harm endured by plaintiff and the difference between the punitive damages awards and the civil damages awards in similar cases. The Court holds that the reprehensibility of the defendants' conduct, combined with a $2.6 million award for punitive damages as compared to a $1.1 million dollar award for pain and suffering fully satisfied due process.

Most recently, in August, 2008, a jury hearing a religious discrimination in the Southern District of New York awarded punitive damages in the amount of $500,000, where the compensatory damages totaled $735,000.00

In summary, it is essential to consider punitive damages in assessing the value of a discrimination cases. This is particularly true in harassment cases that involve egregious misconduct, and willful disregard of an employee's rights. The Human Rights Law, and its provision for punitive damages, offers considerable protection for New York victims of discrimination.

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oHzdGWvfMiv Says:
January 03,2013 06:54 pm

The french-canadians have a wonurefdl word for this concept, "priorite" (the e has an accent egu so that it is pronounced pree-or-ee-tay). In practical terms, french citizens believe they should get priority over the fellow Canadians, business class for me vs. economy class for you. What can you say about a province in a bi-lingual country that outlaws one of the official languages and where french citizens refer to themselves as "pur lain" meaning "pure wool". Vive le quebec libre! When one man's freedom is another man's externality, is not the very concept of freedom diminished.

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RAPAPORT LAW FIRM, PLLC.
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Marc A. Rapaport is the founder and principal of Rapaport law Firm, PLLC, a New York City civil litigation law firm. Rapaport Law Firm provides legal representation in all employment law matters, including claims involving discrimination, wrongful discharge, and unpaid wages.

If you have suffered from discrimination at your job, call Mr. Rapaport today: (212) 382-1600.
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