Mihalik v. Credit Agricole Cheuvreux: Second Circuit Clarifies Standard of Review of New York City Human Rights Law Claims

by Proskauer Rose LLP
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On April 26, 2013, the Second Circuit held that New York City Human Rights Law ("NYCHRL") claims must be analyzed separately from federal and state discrimination claims and that the severe or pervasive standard of liability no longer applies to NYCHRL claims. Mihalik v. Credit Agricole Cheuvreux N. Am., Inc., No. 11-3361-cv (2d Cir. Apr. 26, 2013).

Background

In July 2007, Credit Agricole Cheuvreux North America, Inc. ("Cheuvreux") hired plaintiff-appellant Renee Mihalik into a position that reported to Cheuvreux's Chief Executive Officer, Ian Peacock. Mihalik alleged that Peacock encouraged a "boys['] club" atmosphere in the office and subjected her to sexually suggestive conduct, including commenting on her appearance, telling her that she looked "sexy," showing her pornography "once or twice a month," and twice propositioning her for sex. When Mihalik rejected his advances, Peacock allegedly stopped sitting next to her at the trading desk and began treating her differently, including yelling at her in front of her colleagues. Mihalik allegedly first complained about this behavior at the end of 2007, and again at the beginning of 2008.

In April 2008, after months of unsatisfactory performance, Mihalik was discharged for failing to complete an assignment for Peacock. The day of her dismissal, Peacock met with Mihalik to discuss the assignment. Peacock entered the meeting intending to only give her a performance warning but ended up discharging her. The parties dispute what happened during the meeting, but Mihalik testified that she was fired only after she asked, "What's not working out[?] Me and you or me at the company?"

The District Court Action

Mihalik filed a lawsuit asserting claims of gender discrimination and retaliation under the New York City Human Rights Law, Administrative Code of the City of New York § 8-107 et seq. Cheuvreux moved for summary judgment at the close of discovery. Relying on the federal standards for evaluating such claims, yet noting that it was "incorporat[ing] the special considerations" for NYCHRL claims under Williams v. New York City Housing Authority, 872 N.Y.S.2d 27 (1st Dep't 2009), the district court granted summary judgment to Cheuvreux.

The Second Circuit's Decision

The Second Circuit, rejecting the district court's focus on the traditional quid pro quo and hostile work environment analyses, concluded that the federal standards no longer may direct a review of discrimination and retaliation claims under City law. Instead, a separate and independent analysis of whether disparate treatment occurred must be undertaken.

            Gender Discrimination Claim

Relying upon the First Department's decision in Williams (the first court to apply the Restoration Act's new rules of construction), the Second Circuit held that a plaintiff asserting gender discrimination claims under the NYCHRL "need only demonstrate 'by a preponderance of the evidence that she has been treated less well than other employees because of her gender.'" Mihalik, No. 11-3361-cv, slip op. at 18 (quoting Williams, 872 N.Y.S.2d at 39). The Second Circuit thus rejected the applicability of the federal "severe or pervasive" test in the context of liability, finding severity and pervasiveness relevant only to the issue of damages.

The Second Circuit noted that the NYCHRL is not a "general civility code." Mihalik, No. 11-3361-cv, slip op. at 19. Further, a defendant may assert an affirmative defense that the alleged conduct consisted of nothing more than what a reasonable person would consider "petty slights and trivial inconveniences." Id. at 20-21 (internal citations omitted). The employer, however, bears the burden of proving triviality.

Notably, the Second Circuit declined to address whether and to what extent the McDonnell Douglas burden-shifting framework still applies to NYCHRL claims. Compare Bennett v. Health Mgmt. Sys., Inc., 936 N.Y.S.2d 112, 116 (1st Dep't 2011) (suggesting McDonnell Douglas framework should be modified for NYCHRL claims) with Melman v. Montefiore Med. Ctr., 946 N.Y.S.2d 27, 30 (1st Dep't 2012) (narrowly construing Bennett). The Second Circuit found it was unnecessary to resolve this conflict because the key is whether the employee can show "that her employer treated her less well, at least in part for a discriminatory reason." Mihalik, No. 11-3361-cv, slip op. at 20 n.8. Although an employer may provide evidence of its legitimate, non-discriminatory reasons, summary judgment may only be granted in the employer's favor on this basis if "the record establishes as a matter of law that 'discrimination play[ed] no role' in its actions." Id. (internal citations omitted; emphasis in original).

Considering the totality of the circumstances, the Second Circuit held that a jury could reasonably find Peacock's sexually-charged conduct subjected Mihalik to a different set of employment conditions than her male colleagues, and thus denied summary judgment. The Second Circuit was careful to point out that Mihalik did not need to connect the offensive behavior to her discharge: "Peacock's alleged mistreatment of Mihalik would be actionable under the NYCHRL even if it was unrelated to her discharge and was neither severe nor pervasive." Mihalik, No. 11-3361-cv, slip op. at 30. All she had to show was that a reasonable jury could find that she was treated differently because of her gender.

            Retaliation Claim

The Second Circuit held that a plaintiff asserting a retaliation claim under the NYCHRL must show that she "took an action opposing her employer's discrimination . . . and that, as a result, the employer engaged in conduct that was reasonably likely to deter a person from engaging in such action." Mihalik, No. 11-3361-cv, slip op. at 24 (internal citations omitted). In this case, the Second Circuit emphasized that Mihalik did not have to show that she was discharged for opposing Peacock's alleged behavior. Because "a jury could reasonably find that publicly humiliating Mihalik in front of her male counterparts and otherwise shunning her was likely to deter a reasonable person from opposing his harassing behavior in the future," the Second Circuit held that summary judgment was not appropriate. Id. at 36.

Implications

As summarized by the Second Circuit, the following six considerations guided its decision in Mihalik and will guide future courts' evaluations of NYCHRL claims on summary judgment:

  1. NYCHRL claims must be analyzed separately and independently from federal and state discrimination claims.
  2. The totality of the circumstances must be considered in evaluating the alleged unlawful conduct.
  3. The federal "severe or pervasive" standard of liability does not apply to the NYCHRL claims.
  4. A defendant will not be liable if the plaintiff fails to prove the conduct is caused at least in part by discriminatory or retaliatory motives, or if the defendant proves the conduct was nothing more than "petty slights or trivial inconveniences."
  5. While courts may still dismiss "truly insubstantial cases" on summary judgment, even a single comment may be actionable in the proper context.
  6. Summary judgment is appropriate in NYCHRL cases only if the record establishes as a matter of law that a reasonable jury could not find the employer liable under any theory.

Mihalik, No. 11-3361-cv, slip op. at 25-27 (internal citations omitted).

Although it still is unclear whether courts may apply the McDonnell Douglas burden-shifting framework to NYCHRL claims, regardless of what framework is applied, as a practical matter employers should expect to see far fewer NYCHRL claims dismissed on summary judgment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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