A lesbian employee of the New York City Transit Authority may add sexual orientation discrimination claims that would have been otherwise time-barred to her lawsuit because they “relate back” to her original claims of gender discrimination, a Manhattan appeals court has ruled.
In a 3-2 decision, a majority panel of the Appellate Division, First Department, decided that “all of plaintiff’s claims are based on the same occurrences—namely the underlying employment actions taken against her—and the original complaint put defendants on notice of those occurrences.” Therefore, her sexual-orientation claims “relate back” to the original complaint, pursuant to CPLR 203(f).
Additionally, the defendants will not be “unduly prejudiced” by having to now address the new claims, wrote Justice Rolando Acosta for the majority panel in O’Halloran v. Metropolitan Transportation Authority, 160953/13.
Acosta also noted that using a “broad lens for the purposes of relation back under CPLR 203(f) is especially important in the context of anti-discrimination actions … in which it is frequently difficult for plaintiffs to articulate their employers’ motivations for treating them less well than other employees.”
Plaintiff Margaret O’Halloran, a lawyer, has been employed in various roles since 1987 by defendants Metropolitan Transportation Authority (MTA), New York City Transit Authority (NYCTA) and MTA Bus Co., Acosta wrote. Although she received excellent performance reviews from 2008 to 2012 while an assistant chief facilities officer for the NYCTA’s Business Planning and Administration, she claims she was denied in 2011 the chance to interview for a chief facilities officer post. A male colleague, defendant George Menduina, got the position. He became O’Halloran’s supervisor in January 2012.
O’Halloran claims that for the next seven months, Menduina and others discriminated against her by taking actions including making unannounced changes to her staff, demoting her and imposing unreasonable deadlines on her work, Acosta and the dissenting justices wrote.
O’Halloran also avers that Menduina lodged retaliatory disciplinary charges against her after she made an internal complaint about the discrimination.
The employee then filed a state court complaint in November 2013, asserting, among other things, discrimination on the basis of sex and disability and retaliation in violation of the New York state and New York City Human Rights Laws.
After giving a deposition for two days in March 2016, O’Halloran moved for leave to amend the complaint to add sexual-orientation discrimination claims. She has conceded, according to Acosta, that her sexual-orientation grounds were asserted after the statute of limitations had run out, but has argued that the relation-back doctrine rendered them timely.
Defendants opposed the motion, noting both that the original complaint didn’t allege O’Halloran was a lesbian and it failed to provide “notice of the facts underlying” the orientation claims.
In September 2016, Manhattan Supreme Court Justice Manuel Mendez granted O’Halloran’s motion. Defendants appealed.
In an Aug. 22 opinion affirming Mendez, Acosta wrote that when “a proposed amended complaint contains an untimely claim against a defendant who is already a party … the relevant considerations are simply (1) whether the original complaint gave the defendant notice of the transactions or occurrences at issue and (2) whether there would be undue prejudice to the defendant.”
“Defendants need not have been put on notice of every factual allegation on which the subsequent claims depend, because the original complaint put them on notice of the occurrences that underlie those claims,” Acosta, joined by Justices Rosalyn Richter and Sallie Manzanet-Daniels, said.
“In this case,” he wrote, “the occurrences underlying the new claim are defendants’ general treatment of plaintiff (e.g., denying her an opportunity to interview for advancement, giving her tighter deadlines than other employees, instituting disciplinary proceedings against her, and demoting her), all of which occurred on the same dates and in the same instances as alleged in the original complaint.”
Acosta also stated that “defendants will not be unduly prejudiced or surprised by allowing plaintiff to amend … because they have not been ‘hindered in the preparation of [their] case or … prevented from taking some measure in support of [their] position,’” quoting Jacobson v. McNeil Consumer & Specialty Pharmaceuticals.
“It is likely that [the defendants] conducted some kind of internal investigation into the entire series of alleged actions taken against plaintiff, to determine whether and on what grounds she was discriminated against,” Acosta wrote. “They ought to know the discriminatory reasons for which plaintiff was treated unfavorably, if any such reasons exist.
“In any event, to the extent any prejudice against defendants exists, it is negligible and can be cured by further discovery.”
In dissent, Justice Marcy Kahn, joined by Justice Peter Tom, noted that “the linchpin of the relation-back exception is universally recognized to be the defendant’s receipt of notice, within the applicable limitations period, of the factual basis for any new claim.”
In the O’Halloran case, “defendants were provided with no notice of any transactions or occurrences that plaintiff intended to use to prove the sexual orientation discrimination claims,” Kahn wrote.
She also noted that “as the pertinent language of both the state and city [Human Rights Laws] makes clear, sex/gender discrimination and sexual orientation discrimination are separate and distinct categories.”
“By seeking to bring plaintiff’s claim of sexual orientation discrimination within her original claim for sex and gender discrimination under the state and city [Human Rights Laws], the majority effectively reads the words ‘sexual orientation’ out of both of those statutes,” Kahn wrote in part of a detailed 10-page dissent.
In another portion, Kahn continued, “Plaintiff’s sexual orientation discrimination claims are not based on the same transactions or occurrences as alleged in the original complaint, but upon the new factual allegations … that she is a lesbian, that Menduina was aware of her sexual orientation, and that her former supervisor was demoted after having written a letter of support for her discrimination claims.”
She also averred that “the proposed amended complaint falls short for the additional reason that it fails to state a claim for sexual orientation discrimination.
“To do so, a plaintiff must allege that she was a member of a protected class, that she was qualified for the positions that she sought and held, that she was subjected to adverse employment action, and that the adverse employment action occurred under circumstances giving rise to an inference of discrimination.”
But Acosta, for the majority, countered certain dissenting arguments, including that “the dissent unnecessarily delves into a motion-to-dismiss analysis … notwithstanding the procedural posture of this case (a motion to amend the complaint) and the fact that defendants do not raise that issue on appeal.”
“In doing so,” he wrote, “the dissent skirts the broad city [Human Rights Law] protections recognized by this court, the Court of Appeals, and the United States Court of Appeals for the Second Circuit.” He added that by citing Brennan v. Metropolitan Opera Association, 284 AD2d 66 (1st Dept 2001), for the proposition that plaintiff must contend she was subjected to an adverse employment action, “the dissent overlooks this court’s more recent controlling precedent, which emphasizes the greater protections afforded to plaintiffs” under the city’s Human Rights Law.
Erica Kagan, counsel with The Kurland Group in Manhattan, represented O’Halloran. She called the ruling “very important” in multiple ways, including in its “recognition that it is especially important to define pleading standards broadly for plaintiffs in anti-discrimination actions, in which plaintiffs are sometimes unable to articulate their employers’ motivations for actions taken against them.”
It’s “an important recognition of the realities of discrimination litigation, especially in the employment context,” she said in an email, while also noting that the majority decision continues to “affirm the broad and crucial protections provided by the New York City Human Rights Law.”
Kagan added, “It is also significant that the court recognized and affirmed that plaintiff’s amended complaint does not allege a new set of transactions and occurrences and that defendants have received sufficient notice of plaintiff’s allegations.”
Steve Efron, a Manhattan-based lawyer, represented the defendants, but could not be reached for comment.
Kevin Ortiz, an MTA spokesman, said the MTA had no comment at this time on the First Department’s decision. Asked whether the MTA intended to seek an appeal, he declined to comment.