In Griffin v Sirva, Inc. (No. 35) previewed here, two movers employed by Astro Moving and Storage Co. sued the parent company of Allied Van Lines, Sirva, Inc., for employment discrimination under the New York State Human Rights Law after they were fired by Astro pursuant to a Sirva policy forbidding the employment of persons with criminal convictions. The United States Court of Appeals for the Second Circuit, recognizing the unsettled nature of New York law in the area, certified three questions to the Court of Appeals seeking an interpretation of Human Rights Law § 296(15), prohibiting “employers” from discriminating on the basis of a criminal conviction, and § 296(6), which bars aiding and abetting discrimination. Particularly, the Second Circuit asked: “(1) Does Section 296(15) … limit liability to an aggrieved party’s ‘employer’? (2) If Section 296(15) is limited to an aggrieved party’s ‘employer,’ what is the scope of the term ‘employer’ for these purposes, i.e., does it include an employer who is not the aggrieved party’s ‘direct employer,’ but who, through an agency relationship or other means, exercises a significant level of control over the discrimination policies and practices of the aggrieved party’s ‘direct employer’? (3) Does Section 296(6) …, providing for aiding and abetting liability, apply to § 296(15) such that an out-of-state principal corporation that requires its New York State agent to discriminate in employment on the basis of a criminal conviction may be held liable for the employer’s violation of § 296(15)?”
Resolving the first certified question, the Court of Appeals held that section 296(15) liability is limited only to an employee’s “employer.” Section 296(15) provides that an employer may not deny employment to a person with a prior criminal conviction where it would violate Article 23-A of the Correction Law to do so. Because Correction Law Article 23-A further specifies that it applies to “any public or private employer” (Correction Law § 751), the Court held, reading the two statutes together required the conclusion that only an “employer” may be held liable for discriminating in violation of Human Rights Law § 296(15).
When defining what is an “employer,” however, the Court declined the bright line rule offered by Sirva, that an employer that may be liable under section 296(15) is limited only to an individual’s direct employer. Instead, the Court held, the test is more nuanced, and must be determined on a case-by-case basis. Adopting the test for what is an employer long used by the Appellate Division departments, the Court held that courts should consider four factors when determining whether an entity that is not a direct employer nevertheless qualifies as an “employer” for a claim under section 296(15): “(1) the selection and engagement of the servant; (2) the payment of salary or wages; (3) the power of dismissal; and (4) the power of control of the servant’s conduct” (Opn, at 12-13). The primary consideration, the Court held, is control, whether the entity has substantial control over the individual’s work.
Under this test, third party entities may be found liable for discrimination under the Human Rights Law, as long as there exists an exercise of sufficient control over the work to find that the entity is an “employer.” Because this test depends on the particular facts of each case, further case law development will be required, in accordance with the prior Appellate Division precedent, to find where the tipping point exists in the continuum of control.
Finally, the Court clarified that Human Rights Law § 296(6) “extends liability to an out-of-state nonemployer who aids or abets employment discrimination against individuals with a prior criminal conviction” (Opn, at 14). The Court held that this provision must be construed broadly, and expressly applies to “any person.” The Court, therefore, rejected the federal district court’s conclusion that aiding and abetting liability cannot lie against an out-of-state entity unless it is a joint employer.
The Court of Appeals’ opinion can be found here.