Does New York employment law apply to an employee who lives and works from another state for a New York based employer?

Both the City and the State Human Rights Laws deem it an “unlawful discriminatory practice” for an employer to discharge an employee because of age (see Administrative Code of City of N.Y. § 8-107[1][a]; Executive Law § 296[1][a]). The question raised on this appeal is whether nonresidents of the city and state must plead and prove that the alleged discriminatory conduct had an impact within those respective boundaries. We hold that the policies underpinning those laws require that they must.

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We hold that the impact requirement is appropriate where a nonresident plaintiff invokes the protection of the City Human Rights Law. Contrary to Hoffman's contention, the application of the impact requirement does not exclude all nonresidents from its protection; rather, it expands those protections to nonresidents who work in the city, while concomitantly narrowing the class of nonresident plaintiffs who may invoke its protection.

The Appellate Division's rule that a plaintiff need only plead and prove that the employer's decision to terminate was made

[15 N.Y.3d 291]

in the city is impractical, would lead to inconsistent and arbitrary results, and expands NYCHRL protections to nonresidents who have, at most, tangential contacts with the city. Indeed, the permutations of such a rule are endless, and, although the locus of the decision to terminate may be a factor to consider, the success or failure of an NYCHRL claim should not be solely dependent on something as arbitrary as where the termination decision was made. In contrast, the impact requirement is relatively simple for courts to apply and litigants to follow, leads to predictable results, and confines the protections of the NYCHRL to those who are meant to be protected-those who work in the city (see Administrative Code of City of N.Y. § 2-201 [defining the territory of the city as constituting the five boroughs, and declaring that the “jurisdictions and powers of the city are for all purposes of local administration and government ... co-extensive with the territory ... described”]).

For similar reasons, Hoffman's State Human Rights Law claim should also be dismissed. The Legislature enacted that law through its invocation of “the police power of [New York State] for the protection of the public welfare, health and peace of the people of this state ” (Executive Law § 290[2] [emphasis supplied] ). The law declares that the State of New York “has the responsibility to act to assure that every individual within [New York State] is afforded an equal opportunity to enjoy a full and productive life,” and that failure to afford equal opportunity “threatens the peace, order, health, safety and general welfare of the state and its inhabitants ” (Executive Law § 290 [3] [emphasis supplied]).

The obvious intent of the State Human Rights Law is to protect “inhabitants” and persons “within” the state, meaning that those who work in New York fall within the class of persons who may bring discrimination claims in New York. Application of the “impact” requirement to State Human Rights Law claims achieves the same ends as is the case with its City counterpart, because it permits those who work in the state to invoke its protections. Therefore, we conclude that a nonresident must plead and prove that the alleged discriminatory conduct had an impact in New York (see e.g. Pearce, 528 F.Supp.2d at 185; Lucas v. Pathfinder's Personnel, Inc., 2002 WL 986641, *2, 2002 U.S. Dist LEXIS 8529, *4 [S.D.N.Y.2002]; Duffy, 1998 WL 252063, *12, 1998 U.S. Dist LEXIS 7215, *36).

NYCHRL does not necessarily restrict non-residents from stating a claim, but it rather expands protections to non-residents who work in the city. Hoffman v. Parade Publ'ns, 933 N.E.2d 744, 746 (N.Y. 2010). To state a claim under NYCHRL, a non-resident plaintiff must allege that the discriminatory conduct had an impact in New York City. Id. The purpose of the impact requirement is to make the NYCHRL "simple for courts to apply and litigants to follow,

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lead[ing] to predictable results," and not necessarily to engage in a fact intensive analysis of all of the plaintiff's ties to New York City. Fried v. LVI Servs., Inc., 500 F. App'x 39, 42 (2d Cir. 2012) (quoting Hoffman, 933 N.E.2d at 747). Courts look to where the impact occurs, not the place of its origination, to determine the location of the discriminatory acts, and the impact needs to be felt by the plaintiff in New York City. See Vangas v. Montefiore Med. Ctr., 823 F.3d 174, 183 (2d Cir. 2016); Amaya v. Ballyshear LLC, 340 F. Supp. 3d 215, 221 (E.D.N.Y. 2018) (quoting Int'l Healthcare Sch., v. Global Healthcare Exch., LLC, 470 F. Supp. 2d 345, 362 (S.D.N.Y. 2007)). Courts have repeatedly held that a non-resident plaintiff's occasional meetings in or travel to the City are tangential and do not satisfy the impact requirement. See Hoffman, 933 N.E.2d at 748; see also Fried, 500 F. App'x at 42. The Hoffman court dismissed a non-resident plaintiff's NYCHRL and NYSHRL claims for lack of subject matter jurisdiction because the plaintiff was unable to meet the impact requirement by only showing he attended quarterly meetings in the City, he had managers in the City, and that the decision to terminate him was made in the city. 933 N.E.2d at 745. Further, the Second Circuit has held that frequent communication with personnel in New York City and occasional travel to the City for meetings, do not satisfy the impact requirement. See Vangas, 823 F.3d at 183; Fried, 500 F. App'x at 42. Because Pedroza cannot demonstrate an impact in New York City, her NYCHRL claim must be dismissed.

Supreme Court lacks subject matter jurisdiction over the Human Rights Law claims (see Executive Law § 290[3]; Administrative Code of City of New York § 8-101; Hoffman v Parade Publs., 15 N.Y.3d 285 [2010]). Defendants' alleged conduct occurred while plaintiff was "physically situated outside of New York" (Benham v eCommission Solutions, LLC, 118 A.D.3d 605, 606 [1st Dept 2014]), and did not have "any impact on the terms, conditions or extent of her employment... within the boundaries of New York" (Hardwick v Auriemma, 116 A.D.3d 465, 467 [1st Dept 2014], lv denied 23 N.Y.3d 908 [2014]; see Wolf v Imus, 170 A.D.3d 563, 564 [1st Dept 2019], lv denied 34 N.Y.3d 907 [2019]; Shah v Wilco Sys., Inc., 27 A.D.3d 169, 176 [1st Dept 2005], lv dismissed in part, denied in part 7 N.Y.3d 859 [2006]; see also Vangas v Montefiore Med. Ctr., 823 F.3d 174, 182-183 [2d Cir 2016] [impact on third parties is irrelevant]). "The fact that the alleged discriminatory acts... occurred in New York is insufficient to plead impact in New York" (Pakniat v Moor, 192 A.D.3d 596, 597 [1st Dept 2021]).

The motion court correctly determined that it did not have subject matter jurisdiction over plaintiff's claims of sexual harassment and retaliation under the New York State and New York City Human Rights Laws (HRL) because plaintiff was living and working in Montreal, Canada, at the time of the

[192 A.D.3d 597]

alleged discriminatory conduct and she failed to allege that the conduct had any impact in either New York State or New York City (see Hoffman v. Parade Publs., 15 N.Y.3d 285, 907 N.Y.S.2d 145, 933 N.E.2d 744 [2010]). The fact that the alleged discriminatory acts and unlawful decision to terminate plaintiff's employment occurred in New York is insufficient to plead impact in New York (see id. at 288, 292, 907 N.Y.S.2d 145, 933 N.E.2d 744;

[145 N.Y.S.3d 31]

Hardwick v. Auriemma, 116 A.D.3d 465, 466–467, 983 N.Y.S.2d 509 [1st Dept. 2014], lv denied 23 N.Y.3d 908, 2014 WL 2936031 [2014]).

Contrary to plaintiff's contentions, the legislature's minor revision of State HRL (Executive Law) § 300 has no bearing on Hoffman v. Parade Publs., 15 N.Y.3d 285, 907 N.Y.S.2d 145, 933 N.E.2d 744 (2010), supra. The Hoffman Court relied on sections 290 and 298–a in finding that the statute intended to protect the residents of this State or nonresidents who work in this State (15 N.Y.3d at 291–292, 907 N.Y.S.2d 145, 933 N.E.2d 744). In any event, the amendment does not extend the statute's protections to nonresidents who work for New York employers, notwithstanding the legislature's presumed knowledge of the Hoffman decision (see Matter of Knight–Ridder Broadcasting v. Greenberg, 70 N.Y.2d 151, 157, 518 N.Y.S.2d 595, 511 N.E.2d 1116 [1987]).

In arguing that that the statutes should reach discriminatory conduct that occurs in New York even if the impact is felt by an out of state worker, plaintiff points to the increase in remote working arrangements since the Court of Appeals decided Hoffman. The Covid 19 pandemic has only expanded the diaspora of remote workers, many of them laboring in other states for New York firms. Certainly, the electronic tools that enable this new expanded workplace can be conduits for discriminatory conduct. Additionally, plaintiff is correct that the State and City Human Rights Laws are meant to deter discriminatory behavior by New York employers, as well as to compensate the employees impacted by that behavior. While these arguments have force, the clear directive of Hoffman bars this Court from expanding the jurisdictional breadth of either statute to encompass behavior such as that alleged in the complaint.

Next, Plaintiffs argue that the Court overlooked Hoffman v. Parade Publications, 15 N.Y.3d 285, 290 (2010), in which the New York Court of Appeals held that "a nonresident must plead and prove that the alleged discriminatory conduct had an impact in New York" to maintain a claim under the New York City and State Human Rights Laws. (Pls.' Mem. 5-6). But, as Plaintiffs themselves implicitly concede, Hoffman is not a "controlling decision[]," Medisim, 2012 WL 1450420, at *1 — its holding is limited to claims under the New York City and State Human Rights Laws, not the NYLL. See 15 N.Y.3d at 290. Additionally, Plaintiffs failed to raise Hoffman in their summary judgment briefing. Plaintiffs argue that their failure in that regard should be excused because Hoffman was made relevant only by the Court's own citation

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to Kassman v. KPMG LLP, 925 F. Supp. 2d. 453 (S.D.N.Y. 2013), a case involving the City and State antidiscrimination laws. But the question at issue in Hoffman — the reach of New York law — is close enough to the issue here that Plaintiffs could have, and should have, relied on it to the extent it was favorable to their position. Further, Kassman was not as central to this Court's holding as Plaintiffs suggest; indeed, it was not necessary to the Court's analysis or holding at all, as its citation — using a "see also" signal — at the end of the Court's discussion reflects.

The Court is not persuaded that questions regarding NYLL's extraterritorial application bar class certification here. To be sure "the NYLL is silent on its extraterritorial application." Solouk v. European Copper Specialties, Inc., No. 14-cv-8954, 2019 WL 2181910, at *16 (S.D.N.Y. May 2, 2019) (quoting another source). "However, under New York law, it is a settled rule of statutory interpretation, that unless expressly stated otherwise, no legislation is presumed to be intended to operate outside the territorial jurisdiction of the state . . . enacting it." Rosales v. Low Bid, Inc., No. 17CV3183ADSSIL, 2018 WL 3468710, at *7 (E.D.N.Y. July 3, 2018), report and recommendation adopted, 2018 WL 3468697 (E.D.N.Y. July 18, 2018). "[C]ourts in this Circuit have held that it does not apply to work performed outside of New York State." Id.; see Warman v. Am. Nat'l Standards Inst., No. 15-CV-5486, 2016 WL 3676681, at *2 (S.D.N.Y. July 6, 2016); see also O'Neill v. Mermaid Touring Inc., 968 F. Supp. 2d 572, 578 (S.D.N.Y. 2013) ("Nothing in the [NYLL] suggests that the legislators intended to give persons who were outside New York the right to come to New York to sue their employers." (internal citation omitted)).

Defendants argue that they are entitled to summary judgment on O'Neill's claim for overtime compensation under New York law to the extent that she seeks overtime compensation for work performed outside of New York. (Def. Br. 19) In response, Plaintiff claims that she “is entitled to overtime pay under the New York State Labor Law for hours she worked outside of New York, since New York is [her] domicile and her work throughout the country involved only temporary assignments.” (Plt. Opp. Br. 19)

New York recognizes the “settled rule of statutory interpretation [ ] that unless expressly stated otherwise, ‘no legislation is presumed to be intended to operate outside the territorial jurisdiction of the state ... enacting it.’ ” Goshen v. Mut. Life Ins. Co. of N.Y., 286 A.D.2d 229, 730 N.Y.S.2d 46 (1st Dept. 2001) (quoting 73 Am.Jur.2d Statutes § 359, at 492), aff'd,98 N.Y.2d 314, 746 N.Y.S.2d 858, 774 N.E.2d 1190 (2002); see also N.Y. Stat. Law § 149 (“The laws of one state can have no force and effect in the territorial limits of another jurisdiction, in the absence of the consent of the latter.”).

Here, Plaintiff's claim under New York law for overtime compensation is brought under 12 NYCRR § 142–2.2 and New York Labor Law § 198(1–a). (Am. Cmplt. ¶¶ 42–43) 12 NYCRR § 142–2.2 provides, in pertinent part:

An employer shall pay an employee for overtime at a wage rate of one and one-half times the employee's regular rate in the manner and methods provided in and subject to the exemptions of sections 7 and 13[,] of 29 U.S.C. 201 et seq., the Fair Labor Standards Act of 1938, as amended....

12 NYCRR § 142–2.2. Labor Law § 198(1–a) provides, in pertinent part:

In any action instituted in the courts upon a wage claim by an employee or the commissioner in which the employee prevails, the court shall allow such employee to recover the full amount of any underpayment, all reasonable attorney's fees, prejudgment interest as required under the civil practice law and rules, and, unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law, an additional amount as liquidated damages equal to one hundred percent of the total amount of the wages found to be due.

N.Y. Labor Law § 198(1–a)

These statutory provisions “contain[ ] no clear statement of intended extraterritorial

[968 F.Supp.2d 579]

effect.... [Indeed, the] purpose of this area of the labor law is clearly to protect workers laboring in New York. Nothing in the statute suggests that the legislators intended to give persons who were outside New York the right to come to New York to sue their employers....” Hammell v. Banque Paribas, No. 90 Civ. 4799 (JSM), 1993 WL 426844, at *1 (S.D.N.Y. Oct. 22, 1993); see also Kassman v. KPMG LLP, 925 F.Supp.2d 453, 469–70 (S.D.N.Y. 2013) (same).

Plaintiff's reliance on residence or domicile is misplaced. The crucial issue is where the employee is “laboring,” not where he or she is domiciled. See Hammell, 1993 WL 426844, at *1; Webber v. Mut. Life Ins. Co. of New York, 287 A.D.2d 369, 370, 731 N.Y.S.2d 447 (1st Dept. 2001) (citing Padula v. Lilarn Props., 84 N.Y.2d 519, 522–23, 620 N.Y.S.2d 310, 644 N.E.2d 1001 (1994) (“As to the law to be applied, it is settled that the protection afforded to New York employees by the Labor Law, ... has no application to an accident that occurs outside New York State, even where all parties are New York domiciliaries.”)).

For these reasons, Defendants' motion for summary judgment is granted to the extent that Plaintiff seeks recovery under the New York Labor Law for overtime work performed outside of New York.

As an initial matter, Plaintiffs bring claims under the NYLL for minimum wage, overtime, and spread of hours violations. (Amended Compl. ¶¶ 156-167). Defendants contend that the NYLL does not apply in this action because Plaintiffs' work on the Show did not occur in New York. (Defs.' Mem. 8-9). Plaintiffs do not dispute the fact that their work took place outside of New York. Instead, noting that Stage Presence was incorporated in New York, they argue that the Court should apply the NYLL, either because of the "internal affairs doctrine" (according to which, Plaintiffs assert, the law of the state in which a company incorporates governs its internal affairs) or "conflicts of law interests analysis." (Pls.' Mem. 19-20).

Under New York law, it is a "settled rule of statutory interpretation, that unless expressly stated otherwise, 'no legislation is presumed to be intended to operate outside the territorial jurisdiction of the state . . . enacting it.'" Goshen v. Mut. Life Ins. Co. of N.Y., 730 N.Y.S.2d 46, 47 (App. Div. 1st Dep't 2001) (quoting 73 Am. Jur. 2d Statutes § 359, at 492), aff'd, 98 N.Y.2d

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314 (2002); see also N.Y. Stat. Law § 149 (McKinney) ("The laws of one state can have no force and effect in the territorial limits of another jurisdiction, in the absence of the consent of the latter."). Article 19 of the NYLL, which includes the minimum wage, overtime, and spread of hours provisions relevant to this case, begins with a "Statement of Public Policy" section stating that it was enacted to address the fact that "[t]here are persons employed in some occupations in the state of New York at wages insufficient to provide adequate maintenance for themselves and their families." N.Y. Lab. Law § 650 (McKinney) (emphasis added). In combination with the presumption against extraterritoriality, it follows that the statute does not apply to people who work outside of the State of New York. See also Kassman v. KPMG LLP, 925 F. Supp. 2d. 453, 469 (S.D.N.Y. 2013) (holding that the antidiscrimination provisions of the NYLL do not apply extraterritorially and citing cases). Accordingly, Plaintiffs' claims under the NYLL fail as a matter of law.

Plaintiffs have acknowledged that all of the work performed by Chapman and Jordan was performed in the District of Columbia. It is well-settled that the New York Labor Law does not apply to work that is performed outside the State of New York.

[559 B.R. 99]

Magnuson, 2013 WL 5380387, at * 5 (citing, Goshen v. Mut. Life Ins. Co. of N.Y., 286 A.D.2d 229, 730 N.Y.S.2d 46, 47 (1st Dep't 2001) for the proposition that “it is a settled rule of statutory interpretation, that unless expressly stated otherwise, no legislation is presumed to be intended to operate outside the territorial jurisdiction of the state ... enacting it.”) (internal citations and quotations marks omitted); Warman v. American National Standards Institute, No. 15–CV–5486 (RA), 2016 WL 3676681 at *2 (S.D.N.Y. July 6, 2016).¹

Chapman and Jordan acknowledge that “the rule against extraterritorial application of the NYLL has not an insignificant amount of support in courts in this district,” and they have cited five decisions in which courts have refused to apply the New York Labor Law to instances in which work was performed outside the State of New York. See ECF Docket No. 59, at pp. 6–7. Chapman and Jordan nevertheless argue that a conflicts of law “interests analysis” should be applied, citing to the “impact” rule articulated in Hoffman v. Parade Publs., 15 N.Y.3d 285, 290–91, 907 N.Y.S.2d 145, 933 N.E.2d 744 (2010). They interpret Hoffman as holding that New York law is applicable if employment actions affect New York residents, regardless of where the underlying work occurred.

Chapman and Jordan are wrong in their interpretation of Hoffman. In Hoffman, the New York Court of Appeals considered the question of whether a nonresident of New York, who worked outside of New York, could nevertheless assert claims that the termination of his employment violated the New York City Human Rights Law and the New York State Human Rights Law. It is true that the Court of Appeals held that an “impact” test was appropriate in determining whether nonresidents may claim the protections of the relevant statutes. However, the Court also made clear that in its view the “impact” test was not satisfied unless the nonresident plaintiff worked in New York. See 907 N.Y.S.2d at 148, 933 N.E.2d 744 (holding that the application of an impact requirement “does not exclude all nonresidents from its protection; rather, it expands those protections to nonresidents who work in the city, while concomitantly narrowing the class of nonresident plaintiffs who may invoke its protection) (emphasis added); id. (noting that the impact requirement would be easy for courts to apply because it confines the protections of the Human Rights Law “to those who are meant to be protected—those who work in the city”); id. (holding that the State Human Rights Law was intended to apply to persons who “work” in New York and that the Court's “impact” requirement would achieve the same end because “it permits those who work in the state to invoke its protections”). The Court of Appeals rejected Hoffman's arguments that New York law should apply simply because discriminatory decisions had allegedly been made in New York or arguably had other effects within New York.

These aspects of the Hoffman decision are of no help to Chapman and Jordan. They merely hold that different statutes were intended to apply to both residents and nonresidents who work in New York. Chapman and Jordan claim something quite different: they contend that the New York Labor Law should apply to their claims, even though they worked in the District of Columbia. To the Court's

[559 B.R. 100]

knowledge, no decision of any New York State or federal court has applied Hoffman in this way or has given such extraterritorial effect to the New York Labor Law.

In Hoffman the Court of Appeals also noted that the State Human Rights Law had an explicit “extraterritorial” provision that made the statute applicable to discriminatory acts committed outside the State of New York that affect New York residents. Id. at 149, 933 N.E.2d 744. The Court of Appeals held, however, that this provided additional grounds to deny Hoffman's claims, because the extraterritorial provision only benefited residents of New York (not nonresidents). This portion of the Hoffman decision also is of no benefit to Chapman and Jordan, because it illustrates that the New York legislature can and does expressly give extraterritorial effect to statutes when that is its intent. The Magnuson court correctly observed the New York Labor Law has no such extraterritorial provision. Instead, as stated in the Magnuson decision, the policy behind the New York Labor law makes clear that it was intended to apply only to work performed in New York:

Article 19 of the NYLL, which includes the minimum wage, overtime, and spread of hours provisions relevant to this case, begins with a “Statement of Public Policy” section stating that it was enacted to address the fact that “[t]here are persons employed in some occupations in the state of New York at wages insufficient to provide adequate maintenance for themselves and their families.”

Magnuson, 2013 WL 5380387 at *5 (quoting, N.Y. Lab. Law § 650 ) (emphasis in original).

Chapman and Jordan also argue that New York law should apply because the payment of their wages was to be made in New York by a New York payroll entity, using a New York payroll processing accounts and New York bank accounts. However, plaintiffs made the same arguments before the District Court in the Magnuson case. [See Magnuson, Case No. 10–CV–6211, ECF # 155 at p.10.]

The claims being asserted here are statutory claims. An “interest analysis” cannot be used to give extraterritorial effect to a statute when the legislature did not provide that the statute would have such effect. The New York Labor Law regulates the terms on which work may be performed in New York State. It only applies to work done in New York, and therefore does not apply to Chapman's and Jordan's claims. Their statutory claims can only be asserted under similar provisions in the District of Columbia Labor Law.