Issue of Punitive Damages Under New York City Human Rights Law Certified to New York Court of Appeals: Second Circuit | Practical Law

Issue of Punitive Damages Under New York City Human Rights Law Certified to New York Court of Appeals: Second Circuit | Practical Law

In Chauca v. Abraham, the US Court of Appeals for the Second Circuit certified to the New York State Court of Appeals the question of what standard should be applied for awarding punitive damages under the New York City Human Rights Law (NYCHRL) and whether that standard is the same as that applied under Title VII of the Civil Rights Act of 1964 (Title VII).

Issue of Punitive Damages Under New York City Human Rights Law Certified to New York Court of Appeals: Second Circuit

by Practical Law Labor & Employment
Law stated as of 21 Mar 2018 • USA (National/Federal)
In Chauca v. Abraham, the US Court of Appeals for the Second Circuit certified to the New York State Court of Appeals the question of what standard should be applied for awarding punitive damages under the New York City Human Rights Law (NYCHRL) and whether that standard is the same as that applied under Title VII of the Civil Rights Act of 1964 (Title VII).
On November 1, 2016, in Chauca v. Abraham, the US Court of Appeals for the Second Circuit certified to the New York State Court of Appeals the question of which standard to apply for awarding punitive damages under the New York City Human Rights Law (NYCHRL). The Second Circuit determined that the New York Court of Appeals should directly address whether a 2005 amendment to the New York City Administrative Code (NYC Administrative Code) requiring that the NYCHRL be construed "liberally" means that the standard for punitive damages under the NYCHRL is broader than the punitive damages standard under Title VII. ( (2d Cir. Nov. 1, 2016).)
Veronika Chauca sued her employer, Park Management Systems, in US district court for pregnancy discrimination under the federal Pregnancy Discrimination Act (which is part of Title VII), the New York State Human Rights Law (NYSHRL), and the NYCHRL. Chauca sought both compensatory and punitive damages.
The district court did not provide a jury instruction on punitive damages, finding that Chauca failed to present evidence that Park intentionally discriminated against her with malice or reckless indifference to her rights. This finding suggested that the district court was applying Title VII's punitive damages standard. The jury verdict in Chauca's favor did not include a punitive damages award and Chauca appealed the district court's denial of a jury instruction on punitive damages, arguing that the district court should have:
  • Analyzed her punitive damages claim separately from federal law.
  • Liberally construed the NYCHRL's standard for punitive damages liability.
The Second Circuit noted that:
  • Although the NYCHRL provides for punitive damages against employers found liable for discrimination, the NYCHRL does not indicate a standard for awarding punitive damages (N.Y.C. Admin. Code § 8-107(1)(a)(2)).
  • In 2005, the New York City Council amended the NYC Administrative Code by passing the Restoration Act, which provided that the NYCHRL be "construed liberally" regardless of whether related federal or state human rights laws have been construed in the same way (N.Y.C. Local Law No. 85 of 2005 (Oct. 3, 2005) § 7; N.Y.C. Admin Code § 8-130).
  • Before the Restoration Act, the Second Circuit applied the federal Title VII punitive damages standard (intentional discrimination with malice or reckless indifference to an employee's protected rights) to punitive damages claims under the NYC Administrative Code (Farias v. Instructional Systems, Inc., 259 F.3d 91 (2d Cir. 2001)).
  • The question of which standard to apply for establishing punitive damages liability under the NYC Administrative Code is not addressed by:
    • the Restoration Act itself;
    • amendments to the NYCHRL since the Restoration Act, including a 2016 law passed by the New York City Council that again required courts to construe the NYCHRL liberally (N.Y.C. Local Law No. 35 of 2016 (Mar. 28, 2016); N.Y.C. Admin. Code § 8-130); and
    • case law.
The Second Circuit determined that the question of which punitive damages standard to apply under the NYCHRL is best addressed by the New York State Court of Appeals because:
The Second Circuit's decision reflects that:
  • A standard for punitive damages under the NYCHRL does not yet exist.
  • The standard cannot be presumed to be the same as under Title VII.
Update: On March 16, 2018, in Chauca v. Abraham, the Second Circuit vacated the district court and remanded, holding that the district court did not apply the proper standard in declining to submit the question of punitive damages to the jury ( (2d Cir. Mar. 16, 2018)).