Federal Court Applies NY State and City Gay Discrimination Bans Extraterritorially

U.S. District Judge Peter K. Leisure, changing the position he had taken in a prior case, has concluded that a non-resident of New York employed mainly outside the state can contest his discriminatory discharge under the New York State and City Human Rights Laws where the employer, headquartered in New York, made the discriminatory termination decision and communicated it from New York. Rohn Padmore, Inc. v. LC Play Inc., 2010 WL 93109 (S.D.N.Y., Jan. 11, 2010). Thus ruling, Judge Leisure refused to grant summary judgment on jurisdictional grounds to an employer in a diversity case alleging sexual orientation discrimination. However, a final summary judgment on the merits could not be granted, despite the defendant’s virtual confession of unlawful motivation, because of ambiguity about the plaintiff’s employee status.

The case concerns a decision by Erastus Pratt, the proprietor of the defendant men’s fashion company, LC Play, to terminate Ron Padmore, who had been retained by LC Play to do public relations and related chores for them, on a one year written contract. According to an email Pratt sent to Padmore terminating his employment less than six months into the contract, "The models and other people had questions about your sexuality and my company can’t afford to [be] attached to no gay shit. How does it look for an mens [sic] clothing line to have a fruit cake as the spokes person [sic], not my company. Sorry dude, but that’s just how this business is. Best of luck." Pratt added his name to this message and sent it off on October 12, 2005. Not only was he grammatically inept, but he virtually confessed sexual orientation discrimination in the email.

The irony here is that although he appeared so to Pratt and his models, Padmore asserts in the complaint that he is not gay, that he never told Pratt he was, but that apparently Pratt believed he was gay. Perhaps, like many men in the fashion industry – sorry, here we stereotype a bit – Padmore is so "metrosexual" that the crude sort of person revealed by Pratt’s email would assume Padmore was gay, because he was just so fabulous...

In any event, the email virtually confesses sexual orientation discrimination, and one would assume this to be an open and shut case. But Pratt defended against the discrimination claim on three grounds.

First, he asserted that New York law does not forbid sexual orientation discrimination. Perhaps his law firm hadn’t bothered to insert pocket parts into its library books when preparing its summary judgment motion, since New York amended its Human Rights Law to ban discrimination on account of actual or perceived sexual orientation several years earlier, as a quick on-line check would have shown, and the New York City ban dates back to 1986. Upon due consideration, they dropped this defense.

Second, and more seriously, Pratt contended that since Padmore was not a New York resident and apart from occasional visits to the home office actually did most of his work from his Los Angeles residence, where he was located at the time the discharge notice was sent, the New York State and City laws did not apply to his case. And here he initially appeared lucky to have had the case assigned to Judge Leisure, who had issued a decision in a prior case, Wahlstrom v. Metro-North Commuter Railway, 89 F.Supp.2d 506 (S.D.N.R. 2000), deciding a claim asserted against the commuter railway alleging a violation of the N.Y. City ordinance, holding that since the plaintiff was not a city resident and the incident giving rise to the claim arose north of the city line, the City Ordinance did not apply, even though Metro-North was headquartered in the city. In that case, Leisure opined, the question was not just where the defendant was headquartered and where its policies were originated, but also where the impact of the alleged discrimination occurred. Various federal trial courts in New York have differed over time about the criteria to be applied in determining whether discrimination by a New York-based business towards a non-resident would be subject to state law, and there is a line of district court opinions agreeing with Leisure that the impact of the decision must be felt in New York for New York law to apply.

Leisure has changed his view, influenced by both a more recent federal district court opinion by one of his colleagues, Judge Rakoff, and also by a U.S. Court of Appeals for the District of Columbia case, Schuler v. Pricewaterhousecoopers, LLP, 514 F.3d 1365 (D.C.Cir. 2008), in both of which the courts argued that the better interpretation of the law was that if a discriminatory employment decision is made in New York, New York law should apply to it. This was apparently influenced as well by a recent New York State Appellate Division ruling in Hoffman v. Parade Publications, 878 N.Y.S.2d 320 (App.Div. 2009). That case involved an Atlanta-based salesman for the New York-based publication, who made work-related trips from time to time to the N.Y. office. Leisure concluded to follow the newer precedent, and refused to grant summary judgment to the defendant. Instead, he found that Padmore had satisfied the jurisdictional limitations of the New York State and City laws banning sexual orientation discrimination.

However, on Pratt’s third defense, Judge Leisure concluded that a jury trial was needed. Pratt contended that Padmore was an independent contractor, not an employee, thus the ban on employment discrimination contained in these statutes would not apply to his case. The parties agreed that the employment discrimination charges hinge crucially on whether Padmore was an employee. Leisure found that there was no clear answer to that question, upon undertaking a careful analysis of the factual allegations submitted in support and opposition to the motion in light of a multifactorial test employed by the federal courts derived from the Supreme Court’s decision in Cmty. For Creative Non-Violence v. Reid, 490 U.S. 730 (1989). Part of the problem was that the record at this point is ambiguous as to various facts that would be relevant to this determination, leaving it impossible to determine Padmore’s status as a matter of law and requiring a trial to pin down some of the undeterminable factors. Thus, neither side won an ultimate ruling on the merits in this battle of cross-motions.

In other rulings on the motions, Leisure found that Padmore had essentially abandoned his claims concerning copyright and trademark infringement and defamation.