The New York State Court of Appeals issued a big decision today. The question posed to them by the United States Court of Appeals for the Second Circuit was whether the affirmative defense to employer liability developed by the United States Supreme Court in the Faragher and Ellerth cases applies to claims of hostile environment harassment by a supervisor or manager under the New York City Human Rights Law (NYCHRL). The Court answered that this affirmative defense does not apply because the NYCHRL was intended to impose strict liability for the actions of a supervisor or manager. The Court found that the existence of an employer policy may only mitigate the amount of damages.

Under federal law, following the Faragher and Ellerth decisions, an employer has a complete defense to liability for the actions of a supervisor who harasses a subordinate if the employer can demonstrate that: (1) it exercised reasonable care to prevent and correct promptly the harassment; and (2) the employee unreasonably failed to take advantage of the employer's preventive and corrective measures. Although this defense is not available in cases where harassment resulted in an adverse employment action (such as a termination), it is an important defense in many cases. Unfortunately, New York employers faced with NYCHRL claims can no longer rely on this defense.

This decision may have far-reaching implications for employers with employees in New York City. Even those employers with strong policies prohibiting harassment and enforcement mechanisms to investigate and correct issues may be strictly liable for the actions of all of their managers and supervisors under the NYCHRL.

Here is a link to the decision http://www.courts.state.ny.us/ctapps/decisions/2010/may10/62opn10.pdf