On March 20, 2024, the Second Circuit dismissed a remote employee's discrimination claim brought under the New York State Human Rights Law (NYSHRL). The Court held that the employee's discrimination did not meet the "impact test" because the impact was only incidentally felt in New York.

Case Background

Plaintiff's Employment and Work Locations

In King v. Aramark Services Inc., the plaintiff was employed by Aramark Services Inc. (Aramark) to service its contracts with Valley Health System (VHS). The plaintiff managed Aramark's food and facility services to healthcare facilities in Virginia and West Virginia. The plaintiff was assigned to an office in Virginia at VHS's largest facility.

In addition, she also maintained home offices in New York and Virginia and was authorized to work from both locations on days she did not have to be at a specific VHS facility. The plaintiff's job responsibilities required her to travel among the VHS facilities and be available 24/7 to address any issues that arose in those facilities.

Alleged Discrimination and  Termination

In February 2015, the plaintiff was assigned a new manager. Thereafter, the plaintiff claims that she suffered discrimination from the new manager, such as body shaming, fabrication of performance-related complaints, exclusion from important meetings, and interference with her management.

From March – November 2015, the plaintiff received intermittent leave under the Family Medical Leave Act to care for her ill son. In December 2015, the plaintiff went on short-term disability leave because of a surgery.

During the aforementioned leave periods, Aramark approved the plaintiff working from her New York home office. When the plaintiff was away, her manager complained about her absence and questioned the severity of her son's illness. He did not make similar complaints about a male colleague who was experiencing a similar situation. The plaintiff’s manager ultimately terminated her for improper reimbursement authorization.

Lawsuit

The plaintiff sued Aramark in the Western District of New York for a sex-based hostile work environment, sex-based discrimination, and retaliation in violation of the NYSHRL and Title VII of the Civil Rights Act of 1964.

Case Decision

District Court's Ruling

Aramark filed a motion to dismiss the plaintiff's NYSHRL claim for failure to state a claim. The District Court dismissed the plaintiff's claims under the NYSHRL, because "Aramark did not hire [her] as a New York-based employee, and therefore, any discriminatory act did not affect employment 'within' New York." The District Court also held that the NYSHRL did not authorize a private cause of action against an out-of-state employer for discriminatory acts committed outside of New York.

Second Circuit's Ruling

The Second Circuit affirmed the District Court's decision but on different grounds. The Second Circuit applied the "impact test," adopted in Hoffman v. Parade Publications, 15, N.Y.3d 285 (2010).

When New York courts determine where an alleged discrimination took place for liability under the NYSHRL, they "look at the place where the impact of the alleged discriminatory conduct is felt." In this case, when the Second Circuit Court applied the "impact test," it determined that "any discriminatory impact felt in the state was incidental and cannot give rise to [NYSHRL] liability."

The Second Circuit denied the plaintiff's claim that she felt the impact of Aramark's alleged discrimination in New York because "she received permission to work from her New York home for a significant period of time." The Court held that her claim was "too tenuous" to give rise to NYSHRL liability.

Moreover, the court noted that Aramark offered the plaintiff the option to work from her New York home in part because she was caring for her ill son, and much of her work from New York took place when she was on intermittent family leave.

Additionally, the Second Circuit held that even though Aramark permitted the plaintiff to do some work from her New York residence and that some of the discriminatory conduct took place while working from her New York home, "the lion's share of the discriminatory conduct" that comprised the plaintiff's claims were "directed at her in Virginia, not New York." Therefore, because most of the discriminatory acts that comprised the plaintiff's claims were directed at her in Virginia, "any impact she experienced in New York was 'tangential.'"

Court's Rejection of Private Cause of Action

Furthermore, the Court also rejected the plaintiff's argument that the NYSHRL authorizes private causes of actions asserted by a New York resident against non-New York corporations for discrimination claims occurring outside of New York.

The Court held that even if the plaintiff was a New York resident, Aramark (a Delaware corporation with its principal place of business in Pennsylvania) could not be found liable under the NYSHRL for the alleged discrimination that occurred outside of New York.

Takeaways for Employers

As discussed in our previous blog post, when deciding whether an out-of-state individual's discrimination claim can be brought under the NYSHRL, New York Courts apply the "impact test" as set forth in Hoffman v. Parade Publications.

The impact test requires that in order to maintain a discrimination claim under the NYSHRL, the alleged discrimination must have more than an incidental or tangential connection to New York. Therefore, if the majority of the discrimination's impact was experienced outside of New York, then New York courts should likely dismiss discrimination claims brought under the NYSHRL.