NY Transit Agencies Escape Vicarious Liability for Contractors Alleged Discrimination
2 min read
Apr 28, 2016
It is not uncommon for companies to contract their daily business operations to third-party companies. In Motta et al v. Global Contact Services, Inc., the court addressed whether such relationships relieve the outsourcing company of any duties to address discrimination or harassment in the workplace.
The New York City Mass Transit Authority ("NYCTA") and Metropolitan Transportation Authority ("MTA") outsource their Access-A-Ride Call Center ("Call Center") operations to Global Contract Services ("GCS"). As part of their contract, GCS accepted responsibility for the employment, supervision and day-to-day operations of the Call Center.
A group of Black and Hispanic Call Center employees filed lawsuits against NYCTA, MTA and GCS alleging employment discrimination, sexual harassment, and retaliation under the New York State Human Rights Law ("NYSHRL") and New York City Human Rights Law ("NYCHRL"). In support of their claims, plaintiffs alleged they were paid wages under industry standard, were disciplined or move to less desirable assignments in retaliation for complaining about the discriminatory wage, and were subjected to repeated sexual harassment by their supervisors, creating what many alleged was a hostile work environment. employees also filed additional claims under city and state law alleging NYCTA and MTA aided and abetted GCS's actions.
The Southern District of New York dismissed the employees’ claims holding they failed to plead a claim under either statute against either agency for aiding and abetting liability. In its holding, the court held NYCTA and MTA were not the employers or supervisors; nor did they exercise control over the employees’ workplace. The court further held that even if NYCTA and MTA's contract with GCS obligated it to comply with all applicable laws, the employees identified no contractual provision that would require the agencies to address the discrimination allegations.
The plaintiffs plan to appeal the district court’s ruling on the basis that once the agencies received notice of the discrimination, it had the power to terminate the GCGS contract, and by not acting they became aiders and abettors. Please stay tuned for updates on the appeal.
Employers should keep in mind that the outcome in this case turned on the specific terms the parties’ agreement. While it is a proper business practice to outsource business responsibilities, it does not give license to turn a blind eye. Employers should be mindful of what is occurring within their company and address any known issues to avoid potential litigation and ensure a proper working environment.
Should you have any questions related to this topic, or wish to discuss other labor and employment matters, please feel free to contact Thaddeus A. Harrell or your local Hinshaw labor and employment attorney.
Featured Insights

Event
Mar 3 – 5, 2026
25th Annual Legal Malpractice & Risk Management (LMRM) Conference

Press Release
Feb 13, 2026
Hinshaw Team Wins Appeal in Criminal Indictment of Waukegan City Clerk Janet Kilkelly

Press Release
Feb 10, 2026
Hinshaw Trial Team Secures $0 Defense Verdict in $15 Million Auto Accident Trial

Press Release
Feb 4, 2026
Hinshaw Celebrates 17 Consecutive Years of Being Named an Equality 100 Award Winner

Press Release
Feb 5, 2026
Hinshaw Legal Team Secures Directed Verdict in Florida Equine Fraud Case

Press Release
Feb 2, 2026
Hinshaw Welcomes 16 Attorneys in Seven Offices and Announces Opening of a Cleveland Office

Press Release
Jan 20, 2026
Hinshaw Attorneys Named to the LCLD 2026 Fellowship Class and 2026 Pathfinder Program

Press Release
Jan 15, 2026
Hinshaw Client Secures a Complete Jury Verdict in Fraudulent Misrepresentation Horse Sale Case

Press Release
Jan 6, 2026
Hinshaw Adds Four-Member Consumer Financial Services Team in DC and Florida



