At the end of a trial last month, a federal jury found Equinox Holdings Inc. (Equinox) liable for maintaining a hostile work environment and discriminating against a former employee on the basis of race and gender in violation of the New York City Human Rights Law (NYCHRL). The jury awarded the plaintiff damages totaling $11.25 million, plus attorneys’ fees, costs and interest.

The case serves as a cautionary tale to all New York City employers. Given the risk of significant financial liability resulting from NYCHRL violations, employers must take proactive measures to ensure that: (1) all employees understand the expectations for workplace conduct and are aware of how to submit a complaint about any inappropriate conduct; and (2) all managers are properly trained on how to respond to complaints from subordinates, and understand the consequences for failing to properly report any complaints.

This lawsuit began back in September 2020, when plaintiff Röbynn Europe, a Black woman who worked at the Equinox gym location on East 92nd Street in Manhattan for ten months, filed a federal lawsuit against Equinox in the United States District Court for the Southern District of New York. The plaintiff alleged that Equinox had violated Title VII, Section 1981, the Americans with Disabilities Act, the New York State Human Rights Law and the NYCHRL by, among other things, maintaining a hostile work environment on the basis of her race, sex/gender, and disability, and retaliating against her. Specifically, she alleged:

• She was employed as the Personal Training Manager. However, one of her supervisees, a white man employed as the gym’s Fitness Manager, refused to accept her as his supervisor and treated her in a disrespectful manner.
• The Fitness Manager made objectifying comments about the physical appearance of Black, female clients and others in the workplace and would attempt to talk with the plaintiff about which ones were the most sexually attractive.
• The Fitness Manager referred to Black and other non-white staff as lazy and expressed an intent to get them fired.
• The Fitness Manager asked the plaintiff to wait outside with him one evening after their shift to assist him with hitting on a Black woman who worked at a café near the gym.
• The plaintiff repeatedly complained to the General Manager orally, in-person about the Fitness Manager’s behavior, comments, insubordination, and treatment of other employees, but no remedial action was taken.
• The General Manager warned the plaintiff that all complaints must be addressed with him first before she could report anything to Human Resources.
• The General Manager honored a client’s request to have a white personal trainer, even after the plaintiff complained about the discriminatory nature of the request in writing.
• Despite the fact that managers were not required to record their actual starting and ending times, the plaintiff was disciplined for tardiness on the same day and/or shortly after she made complaints about discrimination and harassment to the General Manager. The plaintiff was ultimately discharged for time/attendance issues.

The Court dismissed the plaintiff’s ADA and retaliation claims against Equinox on summary judgment, but all the other claims against Equinox proceeded to trial. The jury found Equinox liable for race and gender discrimination and hostile work environment in violation of the NYCHRL. On May 16, 2023, the jury awarded the plaintiff $1.25 million in compensatory damages and $10 million in punitive damages, totaling $11.25 million plus attorneys’ fees, costs and interest.

As expected, Equinox has filed post-trial motions challenging the damages awards, seeking to have them reduced or a new trial on the issue of damages. As of the writing of this Alert, such motions remain pending.

Key Takeaway

The proper training of managers at every level is crucial. Anti-harassment training is not a one-size-fits-all construct. The general anti-harassment training provided to non-supervisory employees once a year is simply not enough to teach managers about their responsibilities and how their action or inaction can lead to substantial and often devastating results, including personal liability.

Effective and timely training is particularly vital for service industries, such as retail and hospitality, where turnover at every level is substantial and managers can have widely varying degrees of experience. As managers come and go, the message from even a great annual anti-harassment training gets diluted and often forgotten.

To avoid the severe consequences resulting from NYCHRL violations, employers should explore appropriate training for management and supervisory teams. This training will likely need to be more frequent than the annual training provided to non-supervisory employees. It should include in depth discussions about the burden on managers to take appropriate and timely action, which is something that managers too often do not understand. The training should also include discussions on the best ways to apprise human resources of a situation or a complaint and other practices to help both them and the employer avoid liability. Managers must understand the need for a paper trail and appropriate remedial action; simply “telling someone” is not going to fly in litigation.

In sum, employers need to take frequent, proactive action to make sure that their managers are provided with appropriate anti-harassment trainings, that the policies and procedures taught at such trainings are implemented, and the purpose of anti-harassment training remains of heightened importance throughout each year.

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