Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Two commercial truck drivers, residents of Connecticut, began working as delivery drivers for a baked goods company through a staffing agency, classified as W-2 employees. After several months, the company required them to create corporations and enter into “Distributor Agreements” in their capacities as presidents of those corporations to continue working. These agreements included mandatory arbitration clauses and disclaimed an employee-employer relationship. Despite the new contractual arrangement, the drivers’ daily responsibilities remained unchanged, consisting of picking up baked goods from the company’s warehouse and delivering them to retail outlets.Seeking relief under Connecticut wage and overtime laws, the drivers initiated a putative class action in Connecticut Superior Court. The baked goods company removed the case to the United States District Court for the District of Connecticut, invoking diversity jurisdiction. The company then moved to compel arbitration pursuant to the contractual arbitration clauses. The drivers opposed, arguing that the agreements were “contracts of employment” exempt from the Federal Arbitration Act (FAA) under § 1, that they were not bound in their individual capacities, and that the clauses were unenforceable. The District Court ruled in favor of the company, granting the motion to compel arbitration, and held that the agreements were not “contracts of employment” under § 1 of the FAA.On interlocutory appeal, the United States Court of Appeals for the Second Circuit reviewed the District Court’s order de novo. The Second Circuit held that the agreements, though signed by corporate entities created at the company’s request, were “contracts of employment” within the meaning of § 1 of the FAA, as they were contracts for the performance of work by workers. Consequently, the court vacated the District Court’s order compelling arbitration and remanded for further proceedings. View "Silva v. Schmidt Baking Distribution, LLC" on Justia Law

A public hospital in New York contracted with a new parking management company to provide valet services, replacing a previous vendor whose employees were represented by a union and were covered by a collective bargaining agreement (CBA). After winning the contract, the new company considered retaining the existing unionized valet attendants but ultimately did not hire any of them, despite initially recruiting them. Instead, the company posted job listings for the same roles and hired other workers, leaving the former unionized employees without jobs. Evidence suggested that the new company’s refusal to hire was motivated by the employees’ union affiliation.After the union filed an unfair labor practice charge, the Regional Director of the National Labor Relations Board (NLRB) filed a petition with the United States District Court for the Eastern District of New York, seeking a temporary injunction under § 10(j) of the National Labor Relations Act. The requested injunction would have required the company to reinstate the discharged employees, recognize the union, and bargain in good faith. The district court denied the petition in a brief text order, finding no cognizable irreparable harm and noting the delay in seeking relief. Meanwhile, an Administrative Law Judge found that the company violated the Act by refusing to hire the unionized employees and failing to recognize and bargain with the union.The United States Court of Appeals for the Second Circuit reviewed the district court’s denial. The Second Circuit held that the district court’s order violated Rule 52(a)(2) by failing to provide adequate findings and conclusions. The Second Circuit further found that the Regional Director had met all four prongs required for a § 10(j) injunction: likelihood of success on the merits, irreparable harm, balance of equities, and public interest. The court reversed the district court’s order and remanded for entry of the requested injunction. View "Poor v. Parking Systems Plus, Inc." on Justia Law

A former high school principal alleged that, during her tenure at a small New York school district, she was subjected to gender-based hostility and was ultimately fired because of her sex. The principal, who began her role in 2014, reported to the district superintendent. She claimed the superintendent behaved in a demeaning and discriminatory manner towards her and other women, while treating male employees more favorably. In 2016, she was placed on administrative leave and then terminated. She filed complaints with state and federal agencies and then brought suit against the school district, the board of education, and the superintendent, alleging violations of Title VII and New York State Human Rights Law for discriminatory discharge and hostile work environment.The U.S. District Court for the Northern District of New York granted summary judgment to defendants on the principal’s equal protection claim but allowed her Title VII and state law claims to proceed to trial. After a six-day trial, a jury found in her favor, concluding her gender was a motivating factor in her termination and that she was subjected to a hostile work environment. The jury awarded her nearly half a million dollars in damages, including lost income. The district court denied defendants’ post-trial motions for judgment as a matter of law, a new trial, and reduction of damages.On appeal, the United States Court of Appeals for the Second Circuit reviewed whether the verdict was supported by sufficient evidence, whether lost-income damages were proper, and whether alleged trial errors—including a confusing comment by the district judge about New York law—necessitated a new trial. The Second Circuit held that the jury’s verdict was supported by substantial evidence, the damages award was proper, and any errors during trial did not render it unfair. The court affirmed the judgment of the district court. View "Krause v. Kelahan" on Justia Law

A senior account manager at a telecommunications company was terminated after several major accounts she managed decided to discontinue the company’s services. In the months leading up to her termination, she took eight and a half days of paid leave to care for her ill daughter and mother. Her supervisor had expressed concerns about her performance, particularly with her newer accounts, but consistently granted all her leave requests without referencing the Family and Medical Leave Act (FMLA). Despite meeting some of her performance objectives, the loss of major accounts and her supervisor’s ongoing performance criticisms culminated in her dismissal.The United States District Court for the Southern District of New York granted summary judgment to the employer on the employee’s FMLA interference and retaliation claims. The district court found that the employee had not shown she was denied any FMLA benefits or that her termination was in retaliation for taking leave. The court also declined to exercise supplemental jurisdiction over her related claim under the New York City Human Rights Law (NYCHRL), dismissing it without prejudice.The United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The appellate court held that the employee did not establish an FMLA interference claim because her supervisor’s criticisms were unrelated to her leave requests, which were fully granted, and she was not prejudiced by the employer’s failure to provide FMLA notice. The court also held that the employee failed to show retaliation, as her termination was based on documented performance issues rather than the exercise of FMLA rights. Finally, the court upheld the district court’s decision to dismiss the NYCHRL claim without prejudice. View "Haran v. Orange Business Services, Inc." on Justia Law

Thomas Cole brought suit against his former employer, Foxmar, Inc., alleging unlawful retaliation in violation of the Vermont Occupational Safety and Health Act (VOSHA) and the Vermont Earned Sick Time Act (VESTA). At trial, a jury found in Cole’s favor on both claims, initially awarding him over $3 million in damages, including punitive damages. However, after the District Court determined the punitive damages were excessive and ordered a new trial on damages, the second jury awarded Cole $55,000 in compensatory damages and no punitive damages. Cole then sought attorney’s fees under the relevant Vermont statutes.The United States District Court for the District of Vermont found Cole entitled to reasonable attorney’s fees but imposed two across-the-board reductions: a twenty-five percent reduction for what it deemed excessive hours billed by Cole’s attorney, and a further thirty percent reduction based on the perceived disproportionality between the attorney’s fees requested and the damages ultimately awarded. This resulted in a total fee award significantly lower than Cole’s request. Cole appealed, arguing that both reductions were improper and that the overall award was unreasonably low.The United States Court of Appeals for the Second Circuit reviewed the District Court’s decision for abuse of discretion. The appellate court held that the twenty-five percent reduction for excessive hours was within the District Court’s discretion and consistent with Vermont law. However, the court concluded that the thirty percent reduction based on proportionality between fees and damages was not permitted under Vermont law, which does not require fee awards to be proportional to damages in cases involving fee-shifting statutes like VOSHA and VESTA. The Second Circuit therefore vacated the District Court’s fee award and remanded the case for recalculation of a reasonable fee consistent with Vermont law. View "Cole v. Foxmar, Inc." on Justia Law

A physician specializing in physical medicine and rehabilitation was employed by a medical practice under a three-year contract that anticipated partnership if not terminated. After patient and staff complaints about her conduct, the practice proposed a new one-year contract without a partnership track, which she refused to sign. She was then terminated with 90 days’ notice. The physician alleged that her termination was due to age and sex discrimination, as well as retaliation for stating her intent to file an EEOC complaint, and also brought a breach of contract claim.After discovery, the defendants moved for summary judgment in the United States District Court for the Eastern District of New York. A Magistrate Judge recommended granting summary judgment to the defendants on all claims. The District Judge reviewed the report and recommendation (R&R) only for clear error, concluding that the physician’s objections were improper because they repeated arguments made before the Magistrate Judge, and adopted the R&R in full. The physician appealed, arguing that her objections were timely and specific, and that the District Judge should have conducted de novo review.The United States Court of Appeals for the Second Circuit held that the District Court erred in applying only clear error review, as the physician’s objections were proper and required de novo review. However, the appellate court found this error harmless because it reviews summary judgment decisions de novo. On its own review, the Second Circuit concluded that the physician failed to establish a genuine dispute of material fact on her preserved claims of sex discrimination, aiding and abetting discrimination, and retaliation. The court also found that her age discrimination and breach of contract claims were not preserved for appellate review. The Second Circuit affirmed the District Court’s judgment granting summary judgment to the defendants. View "Nambiar v. The Central Orthopedic Group, LLP" on Justia Law

An educator employed by the New York City Department of Education (DOE) was appointed Executive Director of the “AP for All” program, where she supervised a diverse team and was credited with expanding access to Advanced Placement courses. Early in her tenure, she experienced racial tensions with subordinates, including accusations of “microaggressions” and being labeled as exhibiting “white fragility.” These tensions escalated after a new Chancellor implemented an “equity agenda” that included mandatory implicit bias trainings. The plaintiff, who is Caucasian, alleged that these trainings and subsequent workplace interactions fostered a racially hostile environment, with repeated negative generalizations about white employees and a lack of intervention by supervisors when she complained.The plaintiff initially filed suit in the Supreme Court of New York, later amending her complaint to assert claims under 42 U.S.C. § 1983 for race discrimination, hostile work environment, and constructive discharge. The case was removed to the United States District Court for the Southern District of New York, where the plaintiff voluntarily dismissed her state law claims. The district court granted summary judgment to the defendants, finding that the plaintiff failed to demonstrate a municipal policy or custom that caused her demotion, the alleged hostile work environment, or her constructive discharge.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s decision de novo. The Second Circuit affirmed the grant of summary judgment on the demotion and constructive discharge claims, holding that the plaintiff did not provide sufficient evidence that these actions were motivated by racial discrimination or that the employer intentionally created intolerable working conditions. However, the court vacated the summary judgment on the hostile work environment claim, finding that genuine disputes of material fact existed as to whether the DOE’s actions and inaction amounted to a municipal policy or custom that created a racially hostile environment. The case was remanded for further proceedings on that claim. View "Chislett v. New York City Department of Education" on Justia Law

Two former employees of a fire alarm and sprinkler company provided fire alarm testing and inspection services on public works projects in New York. They alleged that their employer failed to pay them the prevailing wages required by New York Labor Law § 220, which mandates that workers on public works projects receive at least the prevailing rate of wages. The contracts between the employer and various public entities included clauses that either disclaimed the applicability of prevailing wage laws, were silent on the issue, or referenced prevailing wage rates. Many contracts also contained a provision shortening the statute of limitations for any action against the company to one year.The United States District Court for the Northern District of New York granted partial summary judgment in favor of the employer on all prevailing wage-related claims. The court found that: (1) the contracts did not expressly promise to pay prevailing wages; (2) the one-year contractual limitations period barred the claims; and (3) fire alarm testing and inspection work was not covered by § 220’s prevailing wage requirement. The court also dismissed related quantum meruit and unjust enrichment claims and later approved a class action settlement on other claims, with the prevailing wage claims reserved for appeal.On appeal, the United States Court of Appeals for the Second Circuit held that, based on a 2009 New York State Department of Labor opinion letter and relevant precedent, fire alarm testing and inspection work is covered by § 220, entitling the plaintiffs to prevailing wages. However, the Second Circuit found New York law unsettled on whether a promise to pay prevailing wages is implicit in every public works contract (even if not expressly stated) and whether a contractual one-year limitations period is enforceable against workers’ third-party beneficiary claims. The court therefore certified these two questions to the New York Court of Appeals for resolution. View "Walton v. Comfort Systems" on Justia Law

A former dancer at two adult entertainment clubs in Manhattan filed a class charge with the Equal Employment Opportunity Commission (EEOC), alleging pervasive sexual harassment and a hostile work environment affecting herself and other female dancers. She claimed that the clubs’ policies and practices fostered this environment, including being forced to change in open areas monitored by video and being pressured to engage in sexual acts with customers. After receiving the charge, the EEOC requested information from the clubs, including employee “pedigree” data such as names, demographics, and employment details. The clubs objected, arguing the requests were irrelevant and burdensome, but the EEOC issued subpoenas for the information.The United States District Court for the Southern District of New York granted the EEOC’s petition to enforce the subpoenas, finding the requested information relevant to the investigation and not unduly burdensome for the clubs to produce. The clubs appealed and, while the appeal was pending, the EEOC issued a right-to-sue letter to the charging party, who then filed a class action lawsuit in the same district court. The clubs argued that the EEOC lost its authority to investigate and enforce subpoenas once the right-to-sue letter was issued and the lawsuit commenced.The United States Court of Appeals for the Second Circuit held that the EEOC retains its statutory authority to investigate charges and enforce subpoenas even after issuing a right-to-sue letter and after the charging party files a lawsuit. The court also found that the employee information sought was relevant to the underlying charge and that the clubs had not shown compliance would be unduly burdensome. The Second Circuit therefore affirmed the district court’s order enforcing the subpoenas. View "EEOC v. AAM Holding Corp." on Justia Law

Four former employees of grocery store chains, who participated in a defined contribution 401(k) retirement plan, brought a putative class action under the Employee Retirement Income Security Act of 1974 (ERISA). They alleged that the plan’s fiduciaries mismanaged the plan by failing to prudently select and monitor investment options, failing to act solely in the interest of plan participants, and allowing excessive fees and improper compensation arrangements. The plaintiffs sought monetary and injunctive relief on behalf of themselves, the plan, and a proposed class of similarly situated participants.The United States District Court for the Northern District of New York dismissed several of the plaintiffs’ claims for lack of Article III standing, finding that the plaintiffs had not alleged any concrete injury to their individual accounts from the alleged mismanagement of certain investment options or from the plan’s compensation arrangements. The district court concluded that because the plaintiffs had not invested in the specific funds they challenged, or had not shown that the alleged breaches affected their own accounts, they lacked standing to pursue those claims. The court did find standing for some claims related to funds in which the plaintiffs had invested, but ultimately dismissed those claims for failure to state a claim and denied leave to amend.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s dismissal of the claims for lack of standing. The Second Circuit held that participants in a defined contribution plan must plausibly allege a concrete, individualized financial injury to establish Article III standing for monetary relief under ERISA. Because the plaintiffs did not allege that they suffered losses in their own accounts from the challenged conduct, they lacked both individual and class standing for those claims. The court affirmed in part and vacated in part the district court’s judgment, remanding for further proceedings consistent with its opinion. View "Collins v. Ne. Grocery, LLC" on Justia Law