For Discrimination Claims, the New York City Human Rights Law Has a More Liberal Test For Awarding Punitive Damages, versus Title VII, according to the Second Circuit

By Douglas Lipsky

On March 16, 2018, the Second Circuit made clear, in Chauca v. Abraham and Park Management Systems, LLC, that Title VII’s standard for assessing punitive damages does not apply to workplace discrimination claims brought under the more liberal New York City Human Rights Law. In reaching this holding, the Second Circuit reversed a lower court’s decision that used the federal standard in a pregnancy discrimination case.

Chauca asserted pregnancy discrimination claims under Title VII and the city’s Human Rights Law against her former employer, Park Health Center in Queens, and two of its workers. Chauca was fired as a physical therapy aide while on maternity leave.

A New York federal jury ruled in Chauca’s favor, awarding her $10,500 in lost wages and $50,000 for pain and suffering. However, before submitting the case to the jury, Judge Vitaliano rejected her request to provide a jury instruction concerning the availability of punitive damages under the city Human Rights Law.

The judge had determined that Chauca did not present evidence that her employer intentionally discriminated against her with “malice, reckless indifference,” or that “an intent to violate the law” existed. This ruling was based on the standard for a punitive damages award under Title VII of the Civil Rights Act of 1964, a measure that bars workplace discrimination on the basis of race, color, religion, sex and national origin.

Chauca argued, on appeal, that the lower court was wrong to apply the Title VII standard to her City Human Rights Law claim. The Second Circuit agreed.

The Second Circuit asked the New York Court of Appeals to weigh in on what the proper standard should be for finding a defendant liable for punitive damages under the NYCHRL since the state statute does not expressly lay out a standard and no controlling state law precedent existed that set the standard. The Court of Appeals responded by holding that “the standard for determining damages under the NYCHRL is whether the wrongdoer has engaged in discrimination with willful or wanton negligence, or recklessness, or a ‘conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.’”

The Second Circuit held that its state appellate counterpart, by reaching that conclusion, “expressly rejected the application of the federal standard for punitive damages.” The Second Circuit went on to explain that the NYCHRL, under the state appellate court’s interpretation, has a more liberal construction for punitive damages and does not require a showing of either malice or awareness that a protected right has been violated, which is required under Title VII.

This ruling will accordingly increase the likelihood of juries awarding punitive damages in discrimination claims under the New York City Human Rights Law.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.