In Syeed v. Bloomberg L.P. 2023 WL 350565, the New York Court of Appeals recently accepted certification of a question on state law put to it by the United States Court of Appeals for the Second Circuit, namely:

Whether a nonresident plaintiff not yet employed in New York City or State satisfies the impact requirement of the New York City Human Rights Law or the New York State Human Rights Law if the plaintiff pleads and later proves that an employer deprived the plaintiff of a New York City or State-based job opportunity on discriminatory grounds.

A plaintiff must generally plead that the alleged discriminatory conduct had an impact within New York City or New York State to succeed in bringing a discrimination claim under these laws. This is the “impact requirement” referenced above.

The plaintiff in this case had worked for the defendant for a number of years, first in Dubai, and then later in Washington D.C.

After applying unsuccessfully for a number of positions with the defendant in New York City, she filed a class action lawsuit in New York state court alleging, among others, discrimination on the basis of race and sex, which was then removed to federal court under the Class Action Fairness Act.

The defendant successfully moved before the federal district court for dismissal of the plaintiff’s failure-to-promote claims because she was at all times a resident of Washington D.C. and so could not plead that she felt the impact of the alleged discrimination in New York City or State.

On appeal, and in favor of certifying the above-noted question, the Second Circuit found that the New York Court of Appeals had not in the past clearly dealt with  failure-to-hire or failure-to-promote cases where a nonresident plaintiff alleged that, but for an employer’s unlawful conduct, he or she would have worked in New York City or State, and thus would have been able to meet the “impact requirement”. The Second Circuit also found that no lower state-court cases had dealt with the issue and, among federal district courts, the results were split, with most finding that the impact requirement could be met if alleged discriminatory conduct had an impact on prospective employment within New York City or State.

The Second Circuit determined that resolving the issue involved “making value judgments and weighing competing policy interests, which the New York Court of Appeals is better positioned to do”. As the Second Circuit noted, a ruling for the plaintiff would expand the class of nonresident plaintiffs who could claim protection under New York human rights laws. But on the other hand, a ruling for the defendant would serve to immunize employers for discriminatory conduct related to New York based jobs, which arguably would have an impact within New York City or State.

As a final consideration, the Second Circuit found that the New York Court of Appeals’ disposition of the issue would likely resolve the case before the Second Circuit because if a nonresident plaintiff who is not yet employed in New York City or State can still meet the impact requirement, then the district court’s decision below could not stand. Likewise, if the impact requirement could not be met by such a plaintiff, then the appeal would have to fail.

Analysis and takeaways

It is too early to predict what the end result will be in this case. What is clear is that until this issue is resolved, New York based employers are facing increased uncertainty as to potential exposure in failure-to-hire and failure-to-promote discrimination claims that unsuccessful nonresident candidates may bring.

In a context of increasing remote or hybrid working arrangements, where applicants are out of state, this is particularly concerning.

Because there is a real possibility of increased exposure for New York employers who entertain job applications from individuals out of state, it is important for them to double down on ensuring that the entirety of their hiring practices comply with relevant human rights legislation.   We will continue to monitor and report on developments in the matter.

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