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Second Circuit Overturns District Court for Applying Federal Punitive Damages Standard to NYCHRL

Edgar M. Rivera, Esq.

On March 16, 2018, in Chauca v. Abraham, the Second Circuit vacated a district court’s denial of a plaintiff’s request for a jury instruction on punitive damages for pregnancy discrimination under the New York City Human Rights Law (NYCHRL). The Second Circuit explained that the lower court had erred in applying the federal test because the New York State Court of Appeals, on certified question, had expressly rejected the application of the federal standard for punitive damages under the NYCHRL. The case was remanded for further proceedings consistent with the opinion.

The Harman Firm, LLP, reported on Chauca v. Abraham on November 20, 2017. In our post “New York Court of Appeals Sets Punitive Damages Standard for NYCHRL Claims”, we explained how the New York State Court of Appeals set the standard for punitive damages awards in claims brought under the NYCHRL. The New York State Court of Appeals, in keeping with the New York State common law standard, held that the NYCHRL entitles a plaintiff to punitive damages “where the wrongdoer’s actions amount to willful or wanton negligence” or “recklessness” or involve “a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.”

In 2009, Plaintiff Veronika Chauca became pregnant, took a period of maternity leave from her job as a physical therapy aide, and was terminated after her return from leave. She then filed suit in the U.S. District Court for the Eastern District of New York, bringing sex and pregnancy discrimination claims under Title VII of the Civil Rights Act of 1964 (“Title VII”), the New York State Human Rights Law (NYSHRL), and the NYCHRL.

Chauca prevailed at trial and obtained a total jury award of $60,500, representing economic and emotional distress damages. Chauca then, however, appealed the district court’s denial of a jury instruction on punitive damages to the Second Circuit, arguing that the district court had not properly construed the NYCHRL’s standard for punitive damages. The Second Circuit, finding that the text of the NYCHRL and existing case law did not provide sufficient guidance, certified the following question to the New York State Court of Appeals: “What is the standard for finding a defendant liable for punitive damages under the New York City Human Rights Law?”  The Court of Appeals responded that the standard for punitive 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.

In its March 16 decision, the Second Circuit noted that the New York State Court of Appeals “expressly rejected the application of the federal standard for punitive damages,” explaining that the NYCHRL “requires neither a showing of malice nor awareness of the violation of a protected right” because “implementing a lower degree of culpability and eschewing the knowledge requirement” adheres to the city council’s liberal construction mandate that the provisions of the NYCHRL “shall be construed liberally…regardless of whether federal or New York state civil and human rights laws…have been so construed.” The Second Circuit held that the federal district court did not apply the proper standard in declining to submit the question of punitive damages to the jury. As a result, the Eastern District’s judgment was vacated and the case remanded for further proceedings.

If you believe that your employer has violated your rights under federal, state, or city employment laws, contact The Harman Firm, LLP.

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