Which State's Anti-Discrimination Law Applies?

It has always been difficult to determine the precise geographic reach of a sovereign's laws. In the context of most federal anti-discrimination laws, Congress recognized this difficulty and expressly addressed it by providing explicit statutory limitations. For instance, Title VII, which prohibits discrimination with respect to employment on the basis of race, color, religion, sex, or national origin, applies outside of the United States only where a U.S. citizen is working abroad for a U.S. company or is working for a foreign company that is “controlled” by a U.S. company. 42 U.S.C. ' 2000e-1. The same extraterritorial limitations exist for the Age Discrimination in Employment Act, see 29 U.S.C. ' 623(h), and the Americans with Disabilities Act, see 42 U.S.C. ' 12111(4).

While the application of these statutes ' especially as it relates to whether a foreign company is “controlled” by a U.S. company ' is often far from clear, the extraterritorial analysis of many state laws is even muddier. This lack of clarity is most pronounced where an employee works in one state for a company that is headquartered in another state (and, often, the law of the second state is more protective than the law in the state where the employee works). In analyzing a lawsuit brought by an employee under the laws of a state where he or she was not employed, the court should begin with the presumption against the extraterritorial application of a state's statute to employees working outside of its borders.

As the United States Supreme Court has explained, “[a] basic principle of federalism is that each State may make its own reasoned judgment about what conduct is permitted or proscribed within its borders, and each State alone can determine what measure of punishment, if any, to impose on a defendant who acts within its jurisdiction. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 422 (2002).

Recent Caselaw

In the last few years, several courts have addressed the extraterritorial application of state anti-discrimination laws. As the three cases detailed below make clear, there is generally a split of authority of whether or when to apply a state's laws to employees working outside of the state. While most courts tend to uphold the presumption against extraterritoriality, enough courts are aggressively applying state laws so as be a great concern to multistate employers.

In Turnley v. Banc of Am. Inv. Servs., Inc., the plaintiffs alleged race discrimination under the Massachusetts human rights statute. While the company was headquartered in North Carolina, the alleged discriminatory actions originated from the company's office in Massachusetts and the plaintiff-employees were based in the company's Georgia office. In analyzing whether the plaintiff could state claims under Massachusetts law, the federal district court in Massachusetts held that the action was permissible under the state statute, finding that “courts have applied [the Massachusetts human rights statute] in situations where the employment decisions at issue were made in Massachusetts, though their effects were felt in another state.” 576 F. Supp. 2d 204 (D. Mass. 2008).

Similarly, in Monteilh v. AFSCME, the plaintiff was employed in California and Georgia by AFSCME, a company headquartered in the District of Columbia. He brought suit in D.C., under the D.C. Human Rights Act (DCHRA), for race and age discrimination, as well as retaliation. While he acknowledged that he was never employed in D.C., he claimed he was protected by the DCHRA because AFSCME was headquartered there and D.C. personnel had approved or endorsed the allegedly discriminatory acts. The district court dismissed the DCHRA claims for lack of subject matter jurisdiction. However, on appeal, the District of Columbia Court of Appeals reversed, holding that an allegation placing the locus of the allegedly discriminatory decision within D.C. is sufficient to support subject matter jurisdiction. 982 A.2d 301 (D.C. 2009).

In contrast, in Judkins v. St. Joseph's College of Me., the federal district court in Maine held that the Maine Human Rights Act could not be applied to a non-resident plaintiff in the absence of clear language indicating that the Maine legislature intended for the Act to have extraterritorial effect. In that case, the plaintiff was a professor at one of the college's satellite campuses. He alleged that the discriminatory decisions at issue were made at the college's flagship campus. However, the court found that, in the absence of clear language providing for extraterritorial application, the general presumption against such application ' which was intended to guard against “possible conflicts with other states' laws and violations of the Commerce Clause” ' provided an insurmountable hurdle for the plaintiff. 483 F. Supp. 2d 60 (D. Me. 2007).

The New York Court of Appeals' Decision in Hoffman

In July 2010, New York State's highest court, the Court of Appeals, entered a 4-3 decision in Hoffman v. Parade Publications, et al., 15 N.Y.3d 285 (2010), holding that non-residents of New York City and New York State alleging claims under the New York City Human Rights Law (NYCHRL) or the New York State Human Rights Law (NYSHRL) must plead and prove that the alleged discriminatory conduct had an impact within those respective boundaries. The Hoffman decision resolved a split among New York's lower and federal courts concerning the extraterritorial reach of the NYCHRL and NYSHRL, where the alleged discriminatory conduct is against a non-resident who does not work in New York. Under Hoffman, the standard is straightforward: A non-resident plaintiff may not invoke the protections of the NYCHRL or the NYSHRL by merely pleading and proving that the alleged discriminatory decision was made in New York City and/or New York State. Rather, a non-resident plaintiff must plead and prove that the discriminatory conduct had an “impact” within those respective boundaries.

Analysis

The Territorial Reach of the NYCHRL and the NYSHRL Prior to the Hoffman Decision

The question presented to the New York Court of Appeals in Hoffman ' whether non-residents of New York City and State must plead and prove that the alleged discriminatory conduct had an impact within New York City and/or State ' emerged from a split among New York lower and federal courts as to the territorial reach of the NYSHRL and NYCHRL. Prior to 2009, New York state and federal courts took the view that a non-resident plaintiff must demonstrate that the alleged discriminatory conduct had an “impact” within the City. See, e.g., Shaw v. Wilco Sys., Inc., 27 A.D.3d 169, 176 (1st Dep't 2005); Pearce v. Manhattan Ensemble Theater, Inc., 528 F. Supp. 2d 175, 184-85 (S.D.N.Y. 2007); Wahlstrom v. Metro-North Comm. R.R. Co., 89 F. Supp. 2d 506, 527-28 (S.D.N.Y. 2000); Duffy v. Drake Beam Morin, 1998 WL 252063, *11 (S.D.N.Y. 1998). Courts adopting the impact requirement had done so out of concern that merely focusing the inquiry on where the termination decision is made ' as opposed to where the impact of that decision is felt ' results in the expansion of these laws to cover any plaintiff who is allegedly discriminated against pursuant to a decision made by an employer from its New York headquarters regardless of where the plaintiff actually works. See Wahlstrom, 89 F. Supp. 2d at 527-28 (citing Duffy, 1998 WL 252063 at *12).

In 2009, however, some New York state and federal courts expanded the circumstances in which these laws could be given extraterritorial application, by concluding that a non-resident plaintiff could invoke the protections of the NYCHRL and the NYSHRL by merely alleging and proving that the discriminatory decision was made in the City and/or State. See, e.g., Hoffman v. Parade Publications, 65 A.D.3d 48, 50, (1st Dep't 2009); Rohn v. Padmore, Inc. v. LC Play Inc., 679 F. Supp. 2d 454, 465 (S.D.N.Y. 2010); see also, Spilkevitz v. Chase Inv. Servs., 2009 WL 2762451, *5 (E.D.N.Y. 2009); Popa v. PriceWaterhouseCoopers, LLP 2009 WL 2524625, *6 (S.D.N.Y. 2009) (both adopting similar analysis).

Accordingly, the question certified to the New York Court of Appeals in Hoffman was whether non-residents of New York City and State must plead and prove that the alleged discriminatory conduct had an impact within those respective boundaries.

Summary of the New York Court of Appeals' Decision In Hoffman

Defendant Parade Publications publishes a nationally syndicated magazine that is distributed in hundreds of American newspapers. Plaintiff Howard Hoffman is a resident of Georgia who worked at Parade's offices in Atlanta. As managing director of Parade's Newspaper Relations Group, Hoffman developed and oversaw accounts relative to the inclusion of Parade in newspapers in 10 states. He did not service any accounts in New York.

In October 2007, Parade's President and Publisher called Hoffman in Atlanta from Parade's New York City headquarters and advised Hoffman that his employment was being terminated. Hoffman brought an age discrimination action against Parade and affiliated entities, asserting that his termination of employment violated the NYCHRL and NYSHRL.

Defendants moved to dismiss the complaint for, among other things, lack of subject matter jurisdiction. In opposition, Hoffman alleged that he attended quarterly meetings in New York City, that his department was managed from ' and all corporate contracts were negotiated through ' Parade's headquarters in New York City, and that the decision to end his employment was made and executed in New York City.

The trial court dismissed the complaint for lack of subject matter jurisdiction, holding that neither the
NYCHRL nor the NYSHRL applied to a plaintiff who does not reside in New York because the “impact” of defendants' alleged discriminatory conduct was not felt within those boundaries. The Appellate Division reversed and reinstated Hoffman's complaint, holding that a non-resident employee's allegation that a discriminatory decision to terminate was made in New York City, if proved, was enough to demonstrate that New York has subject matter jurisdiction over the claims. See Hoffman v. Parade Publications, et al., 65 A.D.3d 48, 56-57 (1st Dep't 2009).

In its decision, the New York Court of Appeals addressed: 1) whether non-residents of New York City bringing claims under the NYCHRL must plead and prove that the alleged discriminatory conduct had an impact within the City; and 2) whether non-residents of New York State bringing claims under the NYSHRL must plead and prove that the alleged discriminatory conduct had an impact within the State. The majority's answer was “yes” on both fronts.

First considering the territorial reach of the NYCHRL, the court emphasized that the statute's language makes clear that “its protections are afforded only to those who inhabit or are 'persons in' the City of New York.” Relying on this statutory language and the pre-2009 decisions adopting the “impact requirement,” the court held that “the impact requirement is appropriate where a non-resident plaintiff invokes the protection of the City Human Rights Law.”

In doing so, the court rejected Hoffman's argument that the application of the impact requirement excludes all non-residents from NYCRHL protection. Rather, the court noted that application of the impact requirement “expands NYCHRL protections to non-residents who work in the City, while concomitantly narrowing the class of non-resident plaintiffs who may invoke its protection.”

The court similarly rejected the Appellate Division's analysis that a plaintiff need only plead and prove that the employer's discriminatory decision was made in the City. According to the court:

Indeed, the permutations of such a rule are endless, and, although the locus of the decision to terminate may be a factor to consider, the success or failure of an NYCHRL claim should not be solely dependent on something as arbitrary as where the termination decision was made. In contrast, the impact requirement is relatively simple for courts to apply and litigants to follow, leads to predictable results, and confines the protections of the NYCHRL to those who are meant to be protected ' those who work in the City.

The court next turned to the territorial reach of the NYSHRL. Relying on the NYSHRL's statutory language, the court found that the “obvious intent of the State Human Rights Law is to protect 'inhabitants' and persons 'within' the State.” Noting that application of the impact requirement to the NYSHRL achieves the same ends as is the case with its NYCHRL counterpart, the court held that a non-resident bringing NYSHRL claims must plead and prove that the alleged discriminatory conduct had an impact in New York.

Applying the impact requirement to Hoffman, the court noted that: 1) he was neither a resident of, nor employed in, New York City or New York State; and 2) he did not state a claim that the alleged discriminatory conduct had any impact in either of those locations. Accordingly, the court held that the trial court properly dismissed Hoffman's age discrimination claims for want of subject matter jurisdiction.

Cases Analyzing Hoffman's Impact Requirement

Only one post-Hoffman case, Doner-Hendrick v. N.Y. Institute of Technology, analyzes the Hoffman impact requirement. In Doner-Hendrick, the plaintiff brought claims on the basis of race, religion, sex, and national origin against her former employer, the New York Institute of Technology, under both Title VII and the New York State Human Rights Law. She was a resident of Kansas and had signed a three-year contract with NYIT to teach at its campus in Amman, Jordan. Her employment was terminated a little over one year into the three-year term.

In granting NYIT's Motion to Dismiss Plaintiff's NYSHRL claim for lack of jurisdiction, the district court for the Southern District of New York began by stating that as a non-New York resident, the plaintiff was required by Hoffman to plead facts that would support a reasonable inference that NYIT's alleged discriminatory behavior had an actual impact in New York. According to the court, the plaintiff's only allegation of an impact in New York was that her dismissal “certainly [had] a profound impact on the entire faculty,” including those in New York, because they saw their administration “'behave in such a wanton and unlawful way' toward” her. The court concluded that this allegation was insufficient, stating that, even assuming this was true, “[t]he relevant 'impact' within the State that a plaintiff must plead (and later prove) is the direct effect of a discriminatory act on a protected individual ' giving rise to a cause of action for that individual ' not the attenuated reaction of third parties to such an individual's circumstance.” The court went on to say that “[t]he Hoffman court adopted the impact requirement partly to simplify the application of the NYSHRL. An extension of the impact requirement to include third parties' reactions to experiences of discrimination elsewhere in the world would make application of the NYSHRL vague and impracticable.” No. 11-civ-121, 2011 WL 2652460 (S.D.N.Y. July 6, 2011).

Conclusion

To apply a state's anti-discrimination statute to employees working outside of its borders without requiring a showing of significant impact within the state represents a departure from the longstanding presumption against extraterritoriality. This presumption guards against inadvertent clashes between various states' laws, and recognizes that the state legislatures generally legislate with domestic concerns in mind. Furthermore, applying the statute extraterritorially without any showing of a domestic impact creates a great deal of uncertainty for multistate employers.

Rather than create such uncertainties, courts should, at a minimum, apply an impact analysis as the Hoffman court did, ensuring that an allegedly discriminatory act has a direct impact in the state before applying that state's laws. However, until the cases reflect a better consensus on this issue, employers must monitor the jurisdictional decisions in their headquarter state, especially if the employer is located in an employee-friendly jurisdiction.

William C. Martucci, a member of this newsletter's Board of Editors, is a corporate defense lawyer in the National Employment Litigation and Policy Group at Shook, Hardy & Bacon, L.L.P. in Washington, DC. He may be reached at [email protected]; 202-783-8400. Jennifer K. Oldvader is a staff attorney for the Federal Reserve Bank of Kansas City. The views expressed herein are those of the authors and not those of the Federal Reserve.

For today's multistate employer, it is rare to see a set of case facts that touches on only one jurisdiction. Take the example set by a 2010 age discrimination case out of New York. In Hoffman v. Parade Publications, the plaintiff worked and resided in Georgia; the decision to end his employment was made in New York at the defendant's New York headquarters, and he received news of his termination while in West Virginia. Such a factual scenario begs the question: Which state's law applies? Is it the law of the state where the allegedly discriminatory decision is made? Where the company is headquartered? Or the law of the state where the impact of any allegedly discriminatory decision is felt (generally, where the plaintiff resides)?

This article addresses recent case law on this issue, ending with an analysis of the New York Court of Appeals' decision in Hoffman. It concludes that the application of a state's laws beyond its borders conflicts with the longstanding and well-accepted principle that a state's law should only be given effect within its boundaries. Therefore, states should not extend their anti-discrimination statutes to those working outside their borders unless the employee can plead and prove that the alleged discrimination had an actual impact within the jurisdiction.

The General Presumption Against Extraterritoriality

It has always been difficult to determine the precise geographic reach of a sovereign's laws. In the context of most federal anti-discrimination laws, Congress recognized this difficulty and expressly addressed it by providing explicit statutory limitations. For instance, Title VII, which prohibits discrimination with respect to employment on the basis of race, color, religion, sex, or national origin, applies outside of the United States only where a U.S. citizen is working abroad for a U.S. company or is working for a foreign company that is “controlled” by a U.S. company. 42 U.S.C. ' 2000e-1. The same extraterritorial limitations exist for the Age Discrimination in Employment Act, see 29 U.S.C. ' 623(h), and the Americans with Disabilities Act, see 42 U.S.C. ' 12111(4).

While the application of these statutes ' especially as it relates to whether a foreign company is “controlled” by a U.S. company ' is often far from clear, the extraterritorial analysis of many state laws is even muddier. This lack of clarity is most pronounced where an employee works in one state for a company that is headquartered in another state (and, often, the law of the second state is more protective than the law in the state where the employee works). In analyzing a lawsuit brought by an employee under the laws of a state where he or she was not employed, the court should begin with the presumption against the extraterritorial application of a state's statute to employees working outside of its borders.

As the United States Supreme Court has explained, “[a] basic principle of federalism is that each State may make its own reasoned judgment about what conduct is permitted or proscribed within its borders, and each State alone can determine what measure of punishment, if any, to impose on a defendant who acts within its jurisdiction. State Farm Mut. Auto. Ins. Co. v. Campbell , 538 U.S. 408, 422 (2002).

Recent Caselaw

In the last few years, several courts have addressed the extraterritorial application of state anti-discrimination laws. As the three cases detailed below make clear, there is generally a split of authority of whether or when to apply a state's laws to employees working outside of the state. While most courts tend to uphold the presumption against extraterritoriality, enough courts are aggressively applying state laws so as be a great concern to multistate employers.

In Turnley v. Banc of Am. Inv. Servs., Inc., the plaintiffs alleged race discrimination under the Massachusetts human rights statute. While the company was headquartered in North Carolina, the alleged discriminatory actions originated from the company's office in Massachusetts and the plaintiff-employees were based in the company's Georgia office. In analyzing whether the plaintiff could state claims under Massachusetts law, the federal district court in Massachusetts held that the action was permissible under the state statute, finding that “courts have applied [the Massachusetts human rights statute] in situations where the employment decisions at issue were made in Massachusetts, though their effects were felt in another state.” 576 F. Supp. 2d 204 (D. Mass. 2008).

Similarly, in Monteilh v. AFSCME, the plaintiff was employed in California and Georgia by AFSCME, a company headquartered in the District of Columbia. He brought suit in D.C., under the D.C. Human Rights Act (DCHRA), for race and age discrimination, as well as retaliation. While he acknowledged that he was never employed in D.C., he claimed he was protected by the DCHRA because AFSCME was headquartered there and D.C. personnel had approved or endorsed the allegedly discriminatory acts. The district court dismissed the DCHRA claims for lack of subject matter jurisdiction. However, on appeal, the District of Columbia Court of Appeals reversed, holding that an allegation placing the locus of the allegedly discriminatory decision within D.C. is sufficient to support subject matter jurisdiction. 982 A.2d 301 (D.C. 2009).

In contrast, in Judkins v. St. Joseph's College of Me., the federal district court in Maine held that the Maine Human Rights Act could not be applied to a non-resident plaintiff in the absence of clear language indicating that the Maine legislature intended for the Act to have extraterritorial effect. In that case, the plaintiff was a professor at one of the college's satellite campuses. He alleged that the discriminatory decisions at issue were made at the college's flagship campus. However, the court found that, in the absence of clear language providing for extraterritorial application, the general presumption against such application ' which was intended to guard against “possible conflicts with other states' laws and violations of the Commerce Clause” ' provided an insurmountable hurdle for the plaintiff. 483 F. Supp. 2d 60 (D. Me. 2007).

The New York Court of Appeals' Decision in Hoffman

In July 2010, New York State's highest court, the Court of Appeals, entered a 4-3 decision in Hoffman v. Parade Publications, et al., 15 N.Y.3d 285 (2010), holding that non-residents of New York City and New York State alleging claims under the New York City Human Rights Law (NYCHRL) or the New York State Human Rights Law (NYSHRL) must plead and prove that the alleged discriminatory conduct had an impact within those respective boundaries. The Hoffman decision resolved a split among New York's lower and federal courts concerning the extraterritorial reach of the NYCHRL and NYSHRL, where the alleged discriminatory conduct is against a non-resident who does not work in New York. Under Hoffman, the standard is straightforward: A non-resident plaintiff may not invoke the protections of the NYCHRL or the NYSHRL by merely pleading and proving that the alleged discriminatory decision was made in New York City and/or New York State. Rather, a non-resident plaintiff must plead and prove that the discriminatory conduct had an “impact” within those respective boundaries.

Analysis

The Territorial Reach of the NYCHRL and the NYSHRL Prior to the Hoffman Decision

The question presented to the New York Court of Appeals in Hoffman ' whether non-residents of New York City and State must plead and prove that the alleged discriminatory conduct had an impact within New York City and/or State ' emerged from a split among New York lower and federal courts as to the territorial reach of the NYSHRL and NYCHRL. Prior to 2009, New York state and federal courts took the view that a non-resident plaintiff must demonstrate that the alleged discriminatory conduct had an “impact” within the City. See, e.g., Shaw v. Wilco Sys., Inc. , 27 A.D.3d 169, 176 (1st Dep't 2005); Pearce v. Manhattan Ensemble Theater, Inc. , 528 F. Supp. 2d 175, 184-85 (S.D.N.Y. 2007); Wahlstrom v. Metro-North Comm. R.R. Co. , 89 F. Supp. 2d 506, 527-28 (S.D.N.Y. 2000); Duffy v. Drake Beam Morin, 1998 WL 252063, *11 (S.D.N.Y. 1998). Courts adopting the impact requirement had done so out of concern that merely focusing the inquiry on where the termination decision is made ' as opposed to where the impact of that decision is felt ' results in the expansion of these laws to cover any plaintiff who is allegedly discriminated against pursuant to a decision made by an employer from its New York headquarters regardless of where the plaintiff actually works. See Wahlstrom, 89 F. Supp. 2d at 527-28 (citing Duffy, 1998 WL 252063 at *12).

In 2009, however, some New York state and federal courts expanded the circumstances in which these laws could be given extraterritorial application, by concluding that a non-resident plaintiff could invoke the protections of the NYCHRL and the NYSHRL by merely alleging and proving that the discriminatory decision was made in the City and/or State. See, e.g., Hoffman v. Parade Publications , 65 A.D.3d 48, 50, (1st Dep't 2009); Rohn v. Padmore, Inc. v. LC Play Inc. , 679 F. Supp. 2d 454, 465 (S.D.N.Y. 2010); see also, Spilkevitz v. Chase Inv. Servs., 2009 WL 2762451, *5 (E.D.N.Y. 2009); Popa v. PriceWaterhouseCoopers, LLP 2009 WL 2524625, *6 (S.D.N.Y. 2009) (both adopting similar analysis).

Accordingly, the question certified to the New York Court of Appeals in Hoffman was whether non-residents of New York City and State must plead and prove that the alleged discriminatory conduct had an impact within those respective boundaries.

Summary of the New York Court of Appeals' Decision In Hoffman

Defendant Parade Publications publishes a nationally syndicated magazine that is distributed in hundreds of American newspapers. Plaintiff Howard Hoffman is a resident of Georgia who worked at Parade's offices in Atlanta. As managing director of Parade's Newspaper Relations Group, Hoffman developed and oversaw accounts relative to the inclusion of Parade in newspapers in 10 states. He did not service any accounts in New York.

In October 2007, Parade's President and Publisher called Hoffman in Atlanta from Parade's New York City headquarters and advised Hoffman that his employment was being terminated. Hoffman brought an age discrimination action against Parade and affiliated entities, asserting that his termination of employment violated the NYCHRL and NYSHRL.

Defendants moved to dismiss the complaint for, among other things, lack of subject matter jurisdiction. In opposition, Hoffman alleged that he attended quarterly meetings in New York City, that his department was managed from ' and all corporate contracts were negotiated through ' Parade's headquarters in New York City, and that the decision to end his employment was made and executed in New York City.

The trial court dismissed the complaint for lack of subject matter jurisdiction, holding that neither the
NYCHRL nor the NYSHRL applied to a plaintiff who does not reside in New York because the “impact” of defendants' alleged discriminatory conduct was not felt within those boundaries. The Appellate Division reversed and reinstated Hoffman's complaint, holding that a non-resident employee's allegation that a discriminatory decision to terminate was made in New York City, if proved, was enough to demonstrate that New York has subject matter jurisdiction over the claims. See Hoffman v. Parade Publications, et al., 65 A.D.3d 48, 56-57 (1st Dep't 2009).

In its decision, the New York Court of Appeals addressed: 1) whether non-residents of New York City bringing claims under the NYCHRL must plead and prove that the alleged discriminatory conduct had an impact within the City; and 2) whether non-residents of New York State bringing claims under the NYSHRL must plead and prove that the alleged discriminatory conduct had an impact within the State. The majority's answer was “yes” on both fronts.

First considering the territorial reach of the NYCHRL, the court emphasized that the statute's language makes clear that “its protections are afforded only to those who inhabit or are 'persons in' the City of New York.” Relying on this statutory language and the pre-2009 decisions adopting the “impact requirement,” the court held that “the impact requirement is appropriate where a non-resident plaintiff invokes the protection of the City Human Rights Law.”

In doing so, the court rejected Hoffman's argument that the application of the impact requirement excludes all non-residents from NYCRHL protection. Rather, the court noted that application of the impact requirement “expands NYCHRL protections to non-residents who work in the City, while concomitantly narrowing the class of non-resident plaintiffs who may invoke its protection.”

The court similarly rejected the Appellate Division's analysis that a plaintiff need only plead and prove that the employer's discriminatory decision was made in the City. According to the court:

Indeed, the permutations of such a rule are endless, and, although the locus of the decision to terminate may be a factor to consider, the success or failure of an NYCHRL claim should not be solely dependent on something as arbitrary as where the termination decision was made. In contrast, the impact requirement is relatively simple for courts to apply and litigants to follow, leads to predictable results, and confines the protections of the NYCHRL to those who are meant to be protected ' those who work in the City.

The court next turned to the territorial reach of the NYSHRL. Relying on the NYSHRL's statutory language, the court found that the “obvious intent of the State Human Rights Law is to protect 'inhabitants' and persons 'within' the State.” Noting that application of the impact requirement to the NYSHRL achieves the same ends as is the case with its NYCHRL counterpart, the court held that a non-resident bringing NYSHRL claims must plead and prove that the alleged discriminatory conduct had an impact in New York.

Applying the impact requirement to Hoffman, the court noted that: 1) he was neither a resident of, nor employed in, New York City or New York State; and 2) he did not state a claim that the alleged discriminatory conduct had any impact in either of those locations. Accordingly, the court held that the trial court properly dismissed Hoffman's age discrimination claims for want of subject matter jurisdiction.

Cases Analyzing Hoffman's Impact Requirement

Only one post-Hoffman case, Doner-Hendrick v. N.Y. Institute of Technology, analyzes the Hoffman impact requirement. In Doner-Hendrick, the plaintiff brought claims on the basis of race, religion, sex, and national origin against her former employer, the New York Institute of Technology, under both Title VII and the New York State Human Rights Law. She was a resident of Kansas and had signed a three-year contract with NYIT to teach at its campus in Amman, Jordan. Her employment was terminated a little over one year into the three-year term.

In granting NYIT's Motion to Dismiss Plaintiff's NYSHRL claim for lack of jurisdiction, the district court for the Southern District of New York began by stating that as a non-New York resident, the plaintiff was required by Hoffman to plead facts that would support a reasonable inference that NYIT's alleged discriminatory behavior had an actual impact in New York. According to the court, the plaintiff's only allegation of an impact in New York was that her dismissal “certainly [had] a profound impact on the entire faculty,” including those in New York, because they saw their administration “'behave in such a wanton and unlawful way' toward” her. The court concluded that this allegation was insufficient, stating that, even assuming this was true, “[t]he relevant 'impact' within the State that a plaintiff must plead (and later prove) is the direct effect of a discriminatory act on a protected individual ' giving rise to a cause of action for that individual ' not the attenuated reaction of third parties to such an individual's circumstance.” The court went on to say that “[t]he Hoffman court adopted the impact requirement partly to simplify the application of the NYSHRL. An extension of the impact requirement to include third parties' reactions to experiences of discrimination elsewhere in the world would make application of the NYSHRL vague and impracticable.” No. 11-civ-121, 2011 WL 2652460 (S.D.N.Y. July 6, 2011).

Conclusion

To apply a state's anti-discrimination statute to employees working outside of its borders without requiring a showing of significant impact within the state represents a departure from the longstanding presumption against extraterritoriality. This presumption guards against inadvertent clashes between various states' laws, and recognizes that the state legislatures generally legislate with domestic concerns in mind. Furthermore, applying the statute extraterritorially without any showing of a domestic impact creates a great deal of uncertainty for multistate employers.

Rather than create such uncertainties, courts should, at a minimum, apply an impact analysis as the Hoffman court did, ensuring that an allegedly discriminatory act has a direct impact in the state before applying that state's laws. However, until the cases reflect a better consensus on this issue, employers must monitor the jurisdictional decisions in their headquarter state, especially if the employer is located in an employee-friendly jurisdiction.

William C. Martucci, a member of this newsletter's Board of Editors, is a corporate defense lawyer in the National Employment Litigation and Policy Group at Shook, Hardy & Bacon, L.L.P. in Washington, DC. He may be reached at [email protected]; 202-783-8400. Jennifer K. Oldvader is a staff attorney for the Federal Reserve Bank of Kansas City. The views expressed herein are those of the authors and not those of the Federal Reserve.