Sharon M. Porcellio
Sharon M. Porcellio ()

In recognition of Judge Elizabeth A. Wolford’s investiture to the Western District of New York on May 5, 2014, we highlight a couple decisions from her first months on the bench. We begin with a decision issued in January involving the denial of a motion to dismiss a student’s race discrimination claim under 42 U.S.C. §1981. The second decision denied a request for injunctive relief seeking to enforce a restrictive covenant.

We conclude this quarter’s column with a decision issued by Magistrate Judge Jonathan W. Feldman denying an employer’s motion for summary judgment in a sexual harassment case.

Race Discrimination Claim

In Bell v. Continental School of Beauty,1 plaintiff, a student esthetician acting pro se, alleged that the Continental School of Beauty unlawfully suspended her because of her race. She also alleged that she was eventually expelled from the school in retaliation for complaining about the alleged discrimination.

In particular, plaintiff alleged that following a disagreement between two Caucasian students she was suspended for one week, but the two Caucasian students were not similarly disciplined. She also alleged that when she was advised of the suspension, she was told that she made “some [of the] Caucasian students feel unsafe,”2 and that the suspension was also based on her 10 write ups. She alleged that two other Caucasian employees had violated the school’s rules but were not similarly punished. Following her suspension, plaintiff filed a charge with the New York State Division of Human Rights (DHR), alleging race discrimination.

About a month after she filed her DHR charge, plaintiff was involved in another issue with a student. Following this incident, the plaintiff was expelled—the same day the school submitted its response to the DHR. Plaintiff filed another DHR complaint.

Defendants moved to dismiss plaintiff’s §1981 claims asserting plaintiff did not state a claim under the statute.3 In particular, defendants argued that plaintiff had not alleged sufficient facts to “support a reasonable inference of purposeful discrimination.”4 Judge Wolford disagreed finding that the following allegations were sufficient to meet her burden: (1) the two Caucasian students involved in the disagreement were not similarly disciplined, (2) the plaintiff was told at the time of her suspension that she caused some of the Caucasian students to feel unsafe, and (3) two other Caucasian students had engaged in rules infractions but were not similarly disciplined.

With regard to the §1981 retaliation claim, the court found that plaintiff had alleged sufficient facts to withstand a motion to dismiss. Specifically, the court found that plaintiff was expelled from Continental only a month following the filing of her DHR charge, and the school failed to offer any legitimate basis for making that decision.

Executive Not Enjoined

In Veramark Technologies, Inc. v. Bouk,5 Judge Wolford was asked to enjoin defendant Joshua Bouk from working for Cass Software,6 a competitor of Veramark. Bouk was Veramark’s highest-ranking sales executive, and therefore, the most senior point of contact for Veramark’s clients. Bouk received a base salary of $157,000, along with bonus compensation, stock options and other employee benefits. He had signed an employment agreement prohibiting him from: “directly or indirectly, perform[ing] services…for…any enterprise that engages in competition with the business conducted by [Veramark] or by any of its affiliates, anywhere in the world.” The agreement also prohibited Bouk from soliciting any Veramark customers.

At the time Bouk began his employment with Cass, the two agreed that as a condition of Bouk’s employment, he was to comply with the non-solicitation provisions contained in Bouk’s employment agreement with Veramark.

Nevertheless, Veramark brought a breach of contract action against Bouk, and sought to enjoin7 him from working at Cass. It argued that refraining from soliciting its customers was insufficient and only enforcement of the non-competition provision would protect its goodwill. Wolford disagreed, finding that Veramark could not establish irreparable harm absent injunctive relief, and accordingly, denied the motion.8

Bouk’s employment with Cass did not threaten Veramark’s goodwill. A violation of a non-compete may constitute irreparable harm where there is a threat to customer goodwill. Such a determination must be made on a case-by-case basis. In this case, Wolford determined that Veramark did not offer any evidence that Bouk’s employment with Cass, in and of itself, threatened Veramark’s relationship with its customers. In particular, she relied on the agreement between Cass and Bouk, wherein Bouk agreed to refrain from soliciting any Veramark customers as a condition of his employment. She observed that where a non-solicitation provision will sufficiently protect a former employer’s customer relationships and goodwill interests, the court will decline to enforce a covenant not to compete.

Because Veramark had not presented any evidence that customer relationships had been or would be damaged by Bouk’s very employment with Cass, Veramark had failed to demonstrate irreparable harm through loss or threatened loss of customer goodwill.

Bouk’s Services to Veramark Were Not Unique. Judge Wolford also declined to find that Bouk’s services with Veramark were unique, and thus, his very employment with Cass caused Veramark irreparable harm. The judge distinguished this case from the circumstances in Ticor Title Ins. Co. v. Cohen,9 where the employee at issue, a title insurance salesman, earned in excess of $1 million per year, the costs and terms of the products were fixed by law and the pool of potential clients was limited, making his personal relationship with the clients much more important. Wolford acknowledged that although Bouk was the highest ranking sales executive and the senior most point of contact with customers, there was no evidence that he was anything more than an ordinary salesman. Accordingly, Veramark could not establish irreparable harm based on his “unique services.”

Sexual Harassment Case

In denying defendant’s summary judgment motion in a sexual harassment case,10 Magistrate Judge Jonathan W. Feldman made noteworthy findings about the number of incidents establishing a hostile work environment.11 In Giamrba v. Zeller Corp.,12 plaintiff claimed that a male co-worker made vulgar sexual gestures and that he called her names such as a “f*cking b*itch” and a “c*nt.” Defendant admitted that the co-worker used “offensive and unprofessional” language and that although gender neutral, was used persistently.

Magistrate Judge Feldman found that whether the co-worker’s language was gender neutral or vulgar and sexually humiliating was an issue of fact for a jury. Additionally, he found that a reasonable jury could conclude that some of the co-worker’s alleged conduct was objectively hostile enough to interfere with plaintiff’s terms and conditions of employment. In particular, Feldman cited to plaintiff’s allegation that the co-worker taunted the plaintiff to “[put] his penis in her mouth” and “eat[] his crotch area.” Moreover, the court noted that a reasonable jury could find that “certain verbal abuse (i.e., calling a female co-worker a ‘c*nt’) [is] so extraordinarily severe as to alter the conditions of her work environment.”13

While the allegations contained more than a single isolated incident of plaintiff being called a “c*nt,” Feldman’s comment that certain verbal abuse, including that language, may be sufficiently severe to alter conditions of employment raises a question that perhaps a single offensive gender or racial epithet may, in certain circumstances, be sufficiently severe to defeat summary judgment.

Endnotes:

1. No. 13-CV-6244, 2014 U.S. Dist. Lexis 50785 (W.D.N.Y. Jan. 23, 2014) (plaintiff named a series of individual defendants; the claims against one of those defendants were dismissed).

2. Id. at * 2.

3. In order to state a claim under 42 U.S.C. §1981, a plaintiff must allege facts to show the following elements: (1) that he or she is a member of a racial minority, (2) defendant intentionally discriminated against the plaintiff because of his or her race, and (3) the elements must concern activity specifically set forth in the statute.

4. Bell, supra, at *7.

5. No. 14-CV-6094, 2014 U.S. Dist. Lexis 46198 (W.D.N.Y. April 2, 2014).

6. Cass Software was also named as a defendant in the lawsuit.

7. In order to obtain a preliminary injunction, the party seeking the injunction must show: (1) a likelihood of irreparable harm absent preliminary relief, (2) a likelihood of success on the merits, (3) the balance of equities weigh in favor of the moving party, and (4) the public interest in served by an injunction. Veramark, supra, at *8.

8. Because plaintiff had not met its burden to show irreparable harm, Judge Wolford found that the court need not address the other elements. She went on to say, however, even if plaintiff had established irreparable harm, injunctive relief would still not be appropriate as it failed to establish a likelihood of success on the merits.

9. 173 F.3d 63 (2d Cir. 1999).

10. The parties in this case consented to Magistrate Judge Feldman hearing dispositive motions.

11. The case also involved the dismissal of plaintiff’s (1) state law claims, (2) claims of disparate treatment and (3) retaliation.

12. Civ. No. 11-CV-6308, 2014 U.S. Dist. LEXIS 75701 (W.D.N.Y. March 31, 2014).

13. Giambra, supra, at * 26.