Decisions of Interest

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Indemnity Action Against Employer's Insurer Limited

An employee lacks standing to bring a direct action against her former employer's insurance carrier without first obtaining a judgment against the employer. Vargas v. Boston Chicken, Inc., 2003 WL 21488656 (E.D.N.Y. 6/27/03) (Spatt, J.)

Defendant Boston Market filed for bankruptcy subsequent to a sexual harassment action filed by one of its former employees. The employee had the automatic bankruptcy stay lifted to allow her to proceed “to the extent of any liability coverage provided by any liability insurance policy which was in effect at the time of the incident.” The employee then filed a complaint against Boston Market's insurance carriers seeking a declaratory judgment that the insurers must indemnify Boston Market for damages, fees, and costs related to her sexual harassment claim. With no Court of Appeals decision on point, Judge Spatt was called on to analyze Section 3420 of the New York State Insurance Law. The court ruled that, absent a judgment against the employer, the former employee had no rights against the employer's insurance carrier. Judge Spatt held that the employee was a third party who had no justiciable controversy against the insurer since she had not been awarded a judgment against the insured, her former employer. The employee's request for declaratory relief against the insurer here was premature and contingent upon a future event that may or may not occur.

For Plaintiff, Gary W. Gramer, Lake Grove, NY.

For Defendant Boston Market, Feder, Goldstein, Tanenbaum & D'Errico, LLP, by Steven F. Goldstein;

For Defendant Insurers, Goodman & Jacobs, LLP by Sue C. Jacobs and Jaffe & Asher, LLP, by Marshal T. Potashner and Mark P. Monack.

Color-blind Bus Driver Not Otherwise Qualified for Position

A city bus driver's inability to distinguish the colors of traffic lights rendered him unqualified to perform an essential function of the position, which was fatal to his claim under the Americans With Disabilities Act. Shannon v. New York City Transit Auth., 332 F.3d 95 (2d Cir. 6/13/03) (Jacob and Sack, Circuit Judges, and Trager, District Court Judge for the Eastern District of New York, sitting by designation).

The Second Circuit held that the employer could legitimately deem the ability to differentiate colors an essential function of the bus driver position because “it conduces to the safety of passengers and because it serves to limit NYCTA's tort liability in situations where color-blindness might cause an accident as well as where it may be alleged to have done so.” The Second Circuit also affirmed the district court's dismissal on summary judgment of the employee's State and City Human Rights Law claims that he was “regarded as” disabled. The Second Circuit noted that even assuming the employee was “regarded as” disabled, he failed to identify any reasonable accommodation, and therefore, his claim must be dismissed.

For Plaintiff-Appellant, Thomas & Associates, by Donna Thomas, New York.

For Defendants-Appellees, Berke-Weiss & Pechman, LLP, by Louis Pechman, New York.

Plaintiff Who Obtains Consent Decree Is Prevailing Party

An employee who obtains a consent decree that materially changes her relationship with her employer is a prevailing party for purposes of obtaining attorney fees under the Americans With Disabilities Act. Lazarus v. County of Sullivan, 2003 WL 21511950 (S.D.N.Y. 6/30/03) (Fox, M.J.)

The employee, a civil servant, was terminated from her position as an investigator. She then filed a complaint in the Southern District, which alleged that she was unlawfully terminated due to her blindness. The complaint sought reinstatement to her position as an investigator, and compensatory and punitive damages. The parties entered into a consent decree, under which she did not receive any of the relief sought in the complaint. Instead, the employee received a promotion to the position of case supervisor, and agreed not to seek the investigator position again.

The employee moved for an award of her attorney fees as a prevailing party in the litigation. The employer argued that her promotion was simply her natural progression under the Civil Service System and unrelated to the lawsuit. The court disagreed: “It is undisputed that, under the Civil Service Law, any of the top three candidates for the Case Supervisor, Grade B who passed the Civil Service Exam could have been appointed to the position. Under the decree, once [the employee] entered the top three, she was to be promoted. Without the decree, the County was not obligated to appoint her, and could have appointed either of the two remaining candidates on the list.”

For Plaintiff, Robert N. Isseks, Middletown.

For Defendant Appelbaum, Bauman, Appelbaum & Frey, by Michael Frey, Liberty.

Retaliation Claim Survives Despite Dismissal of Discrimination Claim

An employee whose claim that he was unlawfully terminated in violation of the Age Discrimination in Employment Act (ADEA) was dismissed on summary judgment was nevertheless able to establish his retaliation claim. Spiegler v. Israel Discount Bank of New York, 2003 WL 21488040 (S.D.N.Y. 6/25/03) (Knapp, D.J.)

The employee was terminated by the same supervisor who hired him. The employee was a member of the protected class at the time he was hired. The person who hired and fired the employee was older than the employee, and the person who replaced the employee was also over the age of 40. Accordingly, the employee failed to raise an inference of discrimination.

However, the employee's complaints to management that he believed he was being replaced with a younger worker constituted protected activity. Because he was discharged within a few hours of his most recent complaint, he established a causal connection between his protected activity and his termination, the court reasoned. Finally, his supervisors' statements that they could not speak to the employee if he was obtaining legal counsel, and that he would have difficulty gaining future employment if he obtained counsel, constituted direct evidence of retaliatory animus: “It is possible that these statements were simply those of cautious employees seeking to limit liability in a future action, or in the case of [a management representative's] statements about future employment, what he believed to be the truth. Nonetheless, a reasonable jury could find instead that these statements reflect discriminatory animus.”

For Plaintiff, Vladeck, Waldman, Elias & Engelhard, P.C., New York.

For Defendant, Epstein Becker & Green, P.C., by Barry Asen, Alesia J. Kantor, New York.

Parens Patriae Standing for Attorney General Confirmed

The Attorney General of the State of New York has parens patriae standing to bring discrimination cases against an employer on behalf of the people of New York. EEOC v. Federal Express Corp., 2003 WL 21397657 (E.D.N.Y. 6/17/03) (Garaufis, J.)

In a Title VII action involving the right of employees to wear dreadlocks for religious reasons, employer Federal Express challenged the authority of the Attorney General's Office to prosecute the action on behalf of the State. The court rejected Federal Express's challenge, and held that not only did the Attorney General have authority to prosecute the case under New York Executive Law '63(1), but also that the State had parens patriae standing as an “aggrieved person” within the meaning of Title VII. The court ruled that Title VII's standing provision clearly envisioned civil suits by a government or a government agency. Moreover, parens patriae standing was consistent with the remedial purposes of Title VII, which is to eradicate employment discrimination from the national economy.

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Indemnity Action Against Employer's Insurer Limited

An employee lacks standing to bring a direct action against her former employer's insurance carrier without first obtaining a judgment against the employer. Vargas v. Boston Chicken, Inc., 2003 WL 21488656 (E.D.N.Y. 6/27/03) (Spatt, J.)

Defendant Boston Market filed for bankruptcy subsequent to a sexual harassment action filed by one of its former employees. The employee had the automatic bankruptcy stay lifted to allow her to proceed “to the extent of any liability coverage provided by any liability insurance policy which was in effect at the time of the incident.” The employee then filed a complaint against Boston Market's insurance carriers seeking a declaratory judgment that the insurers must indemnify Boston Market for damages, fees, and costs related to her sexual harassment claim. With no Court of Appeals decision on point, Judge Spatt was called on to analyze Section 3420 of the New York State Insurance Law. The court ruled that, absent a judgment against the employer, the former employee had no rights against the employer's insurance carrier. Judge Spatt held that the employee was a third party who had no justiciable controversy against the insurer since she had not been awarded a judgment against the insured, her former employer. The employee's request for declaratory relief against the insurer here was premature and contingent upon a future event that may or may not occur.

For Plaintiff, Gary W. Gramer, Lake Grove, NY.

For Defendant Boston Market, Feder, Goldstein, Tanenbaum & D'Errico, LLP, by Steven F. Goldstein;

For Defendant Insurers, Goodman & Jacobs, LLP by Sue C. Jacobs and Jaffe & Asher, LLP, by Marshal T. Potashner and Mark P. Monack.

Color-blind Bus Driver Not Otherwise Qualified for Position

A city bus driver's inability to distinguish the colors of traffic lights rendered him unqualified to perform an essential function of the position, which was fatal to his claim under the Americans With Disabilities Act. Shannon v. New York City Transit Auth. , 332 F.3d 95 (2d Cir. 6/13/03) (Jacob and Sack, Circuit Judges, and Trager, District Court Judge for the Eastern District of New York, sitting by designation).

The Second Circuit held that the employer could legitimately deem the ability to differentiate colors an essential function of the bus driver position because “it conduces to the safety of passengers and because it serves to limit NYCTA's tort liability in situations where color-blindness might cause an accident as well as where it may be alleged to have done so.” The Second Circuit also affirmed the district court's dismissal on summary judgment of the employee's State and City Human Rights Law claims that he was “regarded as” disabled. The Second Circuit noted that even assuming the employee was “regarded as” disabled, he failed to identify any reasonable accommodation, and therefore, his claim must be dismissed.

For Plaintiff-Appellant, Thomas & Associates, by Donna Thomas, New York.

For Defendants-Appellees, Berke-Weiss & Pechman, LLP, by Louis Pechman, New York.

Plaintiff Who Obtains Consent Decree Is Prevailing Party

An employee who obtains a consent decree that materially changes her relationship with her employer is a prevailing party for purposes of obtaining attorney fees under the Americans With Disabilities Act. Lazarus v. County of Sullivan, 2003 WL 21511950 (S.D.N.Y. 6/30/03) (Fox, M.J.)

The employee, a civil servant, was terminated from her position as an investigator. She then filed a complaint in the Southern District, which alleged that she was unlawfully terminated due to her blindness. The complaint sought reinstatement to her position as an investigator, and compensatory and punitive damages. The parties entered into a consent decree, under which she did not receive any of the relief sought in the complaint. Instead, the employee received a promotion to the position of case supervisor, and agreed not to seek the investigator position again.

The employee moved for an award of her attorney fees as a prevailing party in the litigation. The employer argued that her promotion was simply her natural progression under the Civil Service System and unrelated to the lawsuit. The court disagreed: “It is undisputed that, under the Civil Service Law, any of the top three candidates for the Case Supervisor, Grade B who passed the Civil Service Exam could have been appointed to the position. Under the decree, once [the employee] entered the top three, she was to be promoted. Without the decree, the County was not obligated to appoint her, and could have appointed either of the two remaining candidates on the list.”

For Plaintiff, Robert N. Isseks, Middletown.

For Defendant Appelbaum, Bauman, Appelbaum & Frey, by Michael Frey, Liberty.

Retaliation Claim Survives Despite Dismissal of Discrimination Claim

An employee whose claim that he was unlawfully terminated in violation of the Age Discrimination in Employment Act (ADEA) was dismissed on summary judgment was nevertheless able to establish his retaliation claim. Spiegler v. Israel Discount Bank of New York, 2003 WL 21488040 (S.D.N.Y. 6/25/03) (Knapp, D.J.)

The employee was terminated by the same supervisor who hired him. The employee was a member of the protected class at the time he was hired. The person who hired and fired the employee was older than the employee, and the person who replaced the employee was also over the age of 40. Accordingly, the employee failed to raise an inference of discrimination.

However, the employee's complaints to management that he believed he was being replaced with a younger worker constituted protected activity. Because he was discharged within a few hours of his most recent complaint, he established a causal connection between his protected activity and his termination, the court reasoned. Finally, his supervisors' statements that they could not speak to the employee if he was obtaining legal counsel, and that he would have difficulty gaining future employment if he obtained counsel, constituted direct evidence of retaliatory animus: “It is possible that these statements were simply those of cautious employees seeking to limit liability in a future action, or in the case of [a management representative's] statements about future employment, what he believed to be the truth. Nonetheless, a reasonable jury could find instead that these statements reflect discriminatory animus.”

For Plaintiff, Vladeck, Waldman, Elias & Engelhard, P.C., New York.

For Defendant, Epstein Becker & Green, P.C., by Barry Asen, Alesia J. Kantor, New York.