Decisions of Interest

Statute of Limitations Tolled During Pendency of EEOC Claim

The filing of a claim with the Equal Employment Opportunity Commission before the limitations period ended tolled the statute of limitations period for filing a lawsuit for intentional infliction of emotional distress. Prevost v. New York, 2004 WL 32860 (S.D.N.Y. 1/6/04) (Motley, D.J.)

The employee's intentional infliction of emotional distress claim was predicated on actions the employer allegedly committed in and prior to January 2002. The applicable statute of limitations is 1 year. The employee filed a charge with the EEOC in May 2002, and received her right to sue letter in January 2003. The employee filed her complaint in the Southern District in April 2003.

The court acknowledged a “clear split of authority in this district on the question of whether filing a charge with the EEOC tolls the statute of limitations for state law claims … ” Nevertheless, the court reasoned that cases that hold that tolling occurs are more persuasive. Therefore, the court held that here the statute of limitations was tolled from the time the employee filed her EEOC charge until the EEOC issued the right to sue letter.

No attorneys listed.

Employee 'Sufficiently Explained' Prior Inconsistent Statements

Employee made an application for disability benefits Material issues of fact regarding the employee's ability to perform the essential functions of her position precluded summary judgment in favor of the employer. James v. The Trustees of Columbia University in the City of New York, 2003 WL 23018797(S.D.N.Y. 12/22/03) (Sand, D.J.)

The employer argued that the employee was precluded from claiming that she could have performed the essential functions of her position based on contrary statements that she made in an application for disability benefits. The court reasoned that there is not an absolute bar to such inconsistent claims, but that an employee must proffer a “sufficient explanation” for any inconsistency in those statements.

The court held that here the employee amply justified the inconsistent statements, on the ground that the employer's failure to provide her with reasonable accommodations in early May 2000 exacerbated her condition and rendered her unable to work later that month when she applied for disability benefits.

No attorneys listed.

New Trial Required Where Jury Award for Front Pay Was Excessive

The jury's miscalculation of damages for future loss of earnings warranted a new trial as to that portion of damages. Boodram v. Brooklyn Dev. Center, 2003 WL 22976562 (Civ. Ct. Kings Co. 12/16/03) (Battaglia, J.)

The jury awarded the employee a total of $798,000 on her hostile work environment claim, which was premised on allegations of sexual harassment that occurred in 1992, when the employee was 37 years old. At the time of the trial, the employee was 48 years old. The jury awarded her $392,000 for loss of future earnings. The court held that the future earnings portion of the award was excessive. The employee's last salary was $25,000, and no evidence was introduced to support an upward adjustment. Therefore, the court reasoned, “the maximum award for the 14 years for which the jury intended to provide compensation would be $350,000, rather than the $392,000 awarded by the jury.” The court granted the employer's motion to the extent of ordering a new trial on future earnings damages unless the employee stipulated to a reduction in her future earnings damages to $350,000.

No attorneys listed.

Veterinary Clinic's Noncompete Agreement Reasonable and Enforceable

A veterinarian was properly enjoined from practicing equine veterinarian medicine within 35 miles of her former employer for 3 years. Battenkill Veterinary Equine P.C. v. Cangelosi, 768 N.Y.S.2d 504 (3d Dep't 11/26/03) (Cardona, P.J., and Peters, Carpinello and Kane, J.J.)

The lower court issued a preliminary injunction prohibiting a former employee from practicing equine veterinary medicine within 35 miles of the employer's clinic, from providing services to any of the employer's former clients in any location, and from using the employer's client list for any purpose.

The Appellate Division, Third Department, affirmed the granting of the preliminary injunction, but modified the order to limit the restriction on services to former clients to a 35-mile area in accordance with the terms of the noncompete agreement. The Appellate Division also held that the employer was not entitled to any protection of its client list because the employer failed to prove that the information contained in its customer list was not available through public sources.

For Plaintiff-Respondent, Beattie Padovano L.L.C., by Vanessa R. Elliott, Montvale, New Jersey, and Cunningham, Reister & Hyde, L.L.P., Albany.

For Defendant-Appellant, Kupferman & Fauci P.L.L.C., by James Fauci, Ballston Spa.

Carter Test in Error

The district court erred when it applied the Carter test in concluding that a garment manufacturer, who hired contractors to stitch and finish pieces of cloth, and the contractors were not “joint employers” of the contractors' employees. Zheng v. Liberty Apparel Co. Inc., 2003 WL 23028312 (2d Cir. 12/30/03) (Winter, Leval and Cabranes, Circuit Judges).

The Second Circuit announced a four-factor test to determine whether an employment relationship exists in “economic reality” in Carter v. Dutchess Comm. College, 735 F.2d 8 (2d Cir. 1984). Those factors are whether the purported employer 1) had the power to hire and fire; 2) supervised and controlled employee work schedules or conditions of employment; 3) determined the rate and method of payment; and 4) maintained employment records. The Southern District applied the Carter test here and determined that a garment manufacturer who hired contractors to stitch and finish pieces of cloth was not a “joint employer” together with the contractors of the plaintiffs, who worked directly for the contractors.

The Second Circuit reversed and remanded on the ground that application of the Carter test was error. The Second Circuit cautioned that Carter is limited to its facts and is not a generally applicable test for determining joint employment. The Second Circuit declined to state a generally applicable test to determine joint employment. Instead, it stressed the fact-specific nature of such an inquiry. Nevertheless, it listed six factors that it found pertinent in the circumstances of the instant case: 1) whether the manufacturer's premises and equipment were used for the plaintiffs' work; 2) whether the contractors had a business that that could or did shift as a unit from one putative joint employer to another; 3) the extent to which plaintiffs performed a discrete line-job that was integral to the manufacturer's process of production; 4) whether responsibility under the contracts could pass from one subcontractor to another without material changes; 5) the degree to which the manufacturer or agents supervised the plaintiffs' work; and 6) whether plaintiffs worked exclusively or predominantly for the manufacturer.

No attorneys listed.

Negligent Supervision Claim Survives Summary Judgment

An employer may be liable under the theory of negligent supervision rather than respondeat superior for an employee's assault on a fellow co-employee. Cherry v. Utica Dialysis Center, 1 Misc.3d 906 (Sup. Ct., Kings Cty.12/24/03).

Plaintiff was struck by a co-employee in an altercation that occurred in the workplace in front of other employees. The employer immediately terminated the co-employee under its “no violence policy.” Plaintiff, however, sought damages from the employer both under the theory of respondeat superior and negligent supervision. The employer contended that it had no prior knowledge of the terminated employee's propensity for violence. The court ruled that the employer could not be vicariously liable since the terminated employee clearly acted outside the scope of his employment. However, the court refused to grant the employer summary judgment on the negligent supervision claim. In reliance of the Court of Appeals' decision in N.X. v. Cabrini Medical Center, 97 N.Y.2d 247 (2002), the court held that there is a distinction between an attack that takes place in the absence of an employer's prior knowledge of an employee's dangerous propensities, and misconduct that is actually observed by other employees. In the case of the latter, the employer may be liable for negligent supervision.

No attorneys listed.

Failure to Pay Severance Not Violation of ERISA

A severance plan that involves a one-time lump-sum payment and requires no periodic financial coordination of the employer's assets is not an ERISA plan. Hayles v. Advanced Travel Management Corp., 2004 WL 26548 (S.D.N.Y. 1/5/04)(Jones, J.)

Plaintiff in this case, a terminated employee, brought an ERISA claim against her former employer for unpaid severance allegedly due her. Plaintiff contended that the employer had an unwritten severance policy that provided terminated employees with 4 months' salary for every year of service. The court rejected the employee's argument and held that a severance plan that uses a simple arithmetic calculation or clerical determination that requires no managerial discretion is not an ERISA plan. Here, the alleged severance plan required no periodic demands on an employer's assets and there was no need for financial coordination and control to implicate an ongoing administrative scheme. Summary judgment was granted to the employer on this basis.

No attorneys listed.

Statute of Limitations Tolled During Pendency of EEOC Claim

The filing of a claim with the Equal Employment Opportunity Commission before the limitations period ended tolled the statute of limitations period for filing a lawsuit for intentional infliction of emotional distress. Prevost v. New York, 2004 WL 32860 (S.D.N.Y. 1/6/04) (Motley, D.J.)

The employee's intentional infliction of emotional distress claim was predicated on actions the employer allegedly committed in and prior to January 2002. The applicable statute of limitations is 1 year. The employee filed a charge with the EEOC in May 2002, and received her right to sue letter in January 2003. The employee filed her complaint in the Southern District in April 2003.

The court acknowledged a “clear split of authority in this district on the question of whether filing a charge with the EEOC tolls the statute of limitations for state law claims … ” Nevertheless, the court reasoned that cases that hold that tolling occurs are more persuasive. Therefore, the court held that here the statute of limitations was tolled from the time the employee filed her EEOC charge until the EEOC issued the right to sue letter.

No attorneys listed.

Employee 'Sufficiently Explained' Prior Inconsistent Statements

Employee made an application for disability benefits Material issues of fact regarding the employee's ability to perform the essential functions of her position precluded summary judgment in favor of the employer. James v. The Trustees of Columbia University in the City of New York, 2003 WL 23018797(S.D.N.Y. 12/22/03) (Sand, D.J.)

The employer argued that the employee was precluded from claiming that she could have performed the essential functions of her position based on contrary statements that she made in an application for disability benefits. The court reasoned that there is not an absolute bar to such inconsistent claims, but that an employee must proffer a “sufficient explanation” for any inconsistency in those statements.

The court held that here the employee amply justified the inconsistent statements, on the ground that the employer's failure to provide her with reasonable accommodations in early May 2000 exacerbated her condition and rendered her unable to work later that month when she applied for disability benefits.

No attorneys listed.

New Trial Required Where Jury Award for Front Pay Was Excessive

The jury's miscalculation of damages for future loss of earnings warranted a new trial as to that portion of damages. Boodram v. Brooklyn Dev. Center, 2003 WL 22976562 (Civ. Ct. Kings Co. 12/16/03) (Battaglia, J.)

The jury awarded the employee a total of $798,000 on her hostile work environment claim, which was premised on allegations of sexual harassment that occurred in 1992, when the employee was 37 years old. At the time of the trial, the employee was 48 years old. The jury awarded her $392,000 for loss of future earnings. The court held that the future earnings portion of the award was excessive. The employee's last salary was $25,000, and no evidence was introduced to support an upward adjustment. Therefore, the court reasoned, “the maximum award for the 14 years for which the jury intended to provide compensation would be $350,000, rather than the $392,000 awarded by the jury.” The court granted the employer's motion to the extent of ordering a new trial on future earnings damages unless the employee stipulated to a reduction in her future earnings damages to $350,000.

No attorneys listed.

Veterinary Clinic's Noncompete Agreement Reasonable and Enforceable

A veterinarian was properly enjoined from practicing equine veterinarian medicine within 35 miles of her former employer for 3 years. Battenkill Veterinary Equine P.C. v. Cangelosi , 768 N.Y.S.2d 504 (3d Dep't 11/26/03) (Cardona, P.J., and Peters, Carpinello and Kane, J.J.)

The lower court issued a preliminary injunction prohibiting a former employee from practicing equine veterinary medicine within 35 miles of the employer's clinic, from providing services to any of the employer's former clients in any location, and from using the employer's client list for any purpose.

The Appellate Division, Third Department, affirmed the granting of the preliminary injunction, but modified the order to limit the restriction on services to former clients to a 35-mile area in accordance with the terms of the noncompete agreement. The Appellate Division also held that the employer was not entitled to any protection of its client list because the employer failed to prove that the information contained in its customer list was not available through public sources.

For Plaintiff-Respondent, Beattie Padovano L.L.C., by Vanessa R. Elliott, Montvale, New Jersey, and Cunningham, Reister & Hyde, L.L.P., Albany.

For Defendant-Appellant, Kupferman & Fauci P.L.L.C., by James Fauci, Ballston Spa.

Carter Test in Error

The district court erred when it applied the Carter test in concluding that a garment manufacturer, who hired contractors to stitch and finish pieces of cloth, and the contractors were not “joint employers” of the contractors' employees. Zheng v. Liberty Apparel Co. Inc., 2003 WL 23028312 (2d Cir. 12/30/03) (Winter, Leval and Cabranes, Circuit Judges).

The Second Circuit announced a four-factor test to determine whether an employment relationship exists in “economic reality” in Carter v. Dutchess Comm. College , 735 F.2d 8 (2d Cir. 1984). Those factors are whether the purported employer 1) had the power to hire and fire; 2) supervised and controlled employee work schedules or conditions of employment; 3) determined the rate and method of payment; and 4) maintained employment records. The Southern District applied the Carter test here and determined that a garment manufacturer who hired contractors to stitch and finish pieces of cloth was not a “joint employer” together with the contractors of the plaintiffs, who worked directly for the contractors.

The Second Circuit reversed and remanded on the ground that application of the Carter test was error. The Second Circuit cautioned that Carter is limited to its facts and is not a generally applicable test for determining joint employment. The Second Circuit declined to state a generally applicable test to determine joint employment. Instead, it stressed the fact-specific nature of such an inquiry. Nevertheless, it listed six factors that it found pertinent in the circumstances of the instant case: 1) whether the manufacturer's premises and equipment were used for the plaintiffs' work; 2) whether the contractors had a business that that could or did shift as a unit from one putative joint employer to another; 3) the extent to which plaintiffs performed a discrete line-job that was integral to the manufacturer's process of production; 4) whether responsibility under the contracts could pass from one subcontractor to another without material changes; 5) the degree to which the manufacturer or agents supervised the plaintiffs' work; and 6) whether plaintiffs worked exclusively or predominantly for the manufacturer.

No attorneys listed.

Negligent Supervision Claim Survives Summary Judgment

An employer may be liable under the theory of negligent supervision rather than respondeat superior for an employee's assault on a fellow co-employee. Cherry v. Utica Dialysis Center , 1 Misc.3d 906 (Sup. Ct., Kings Cty.12/24/03).

Plaintiff was struck by a co-employee in an altercation that occurred in the workplace in front of other employees. The employer immediately terminated the co-employee under its “no violence policy.” Plaintiff, however, sought damages from the employer both under the theory of respondeat superior and negligent supervision. The employer contended that it had no prior knowledge of the terminated employee's propensity for violence. The court ruled that the employer could not be vicariously liable since the terminated employee clearly acted outside the scope of his employment. However, the court refused to grant the employer summary judgment on the negligent supervision claim. In reliance of the Court of Appeals' decision in N.X. v. Cabrini Medical Center , 97 N.Y.2d 247 (2002), the court held that there is a distinction between an attack that takes place in the absence of an employer's prior knowledge of an employee's dangerous propensities, and misconduct that is actually observed by other employees. In the case of the latter, the employer may be liable for negligent supervision.

No attorneys listed.

Failure to Pay Severance Not Violation of ERISA

A severance plan that involves a one-time lump-sum payment and requires no periodic financial coordination of the employer's assets is not an ERISA plan. Hayles v. Advanced Travel Management Corp., 2004 WL 26548 (S.D.N.Y. 1/5/04)(Jones, J.)

Plaintiff in this case, a terminated employee, brought an ERISA claim against her former employer for unpaid severance allegedly due her. Plaintiff contended that the employer had an unwritten severance policy that provided terminated employees with 4 months' salary for every year of service. The court rejected the employee's argument and held that a severance plan that uses a simple arithmetic calculation or clerical determination that requires no managerial discretion is not an ERISA plan. Here, the alleged severance plan required no periodic demands on an employer's assets and there was no need for financial coordination and control to implicate an ongoing administrative scheme. Summary judgment was granted to the employer on this basis.

No attorneys listed.