Ninth Circuit Finds Employer Not Liable For Employee’s Alleged Groping Of Co-Worker

In Robello v. Mandalay Corp. the plaintiff, Deborah Robello, a bartender employed by the Mandalay Bay Resort and Casino in Las Vegas, alleged that a male bartender, Jesse Estrada, groped her breast while Robello handed him several bottles of wine. Estrada denied Robello’s allegation. Robello subsequently sued the casino for creating and tolerating a hostile work environment based on sexual harassment. The U.S. District Court for the District of Nevada dismissed Robello’s claim against the casino and she appealed.

By a decision dated October 26, 2018, the employee-friendly Ninth Circuit affirmed and ruled in favor of the employer. The Court held that the casino was not liable because it took prompt corrective action by immediately suspending Estrada, conducting a formal investigation, terminating Estrada, and, after later reinstating Estrada, minimizing contact between Robello and Estrada by ensuring that they would not work at the same location. The reinstatement occurred after a video of the incident taken by the casino’s security camera system did not conclusively establish either party’s story.

The Ninth Circuit’s decision reinforces the reasons why employers must have a current and thorough sexual harassment policy in place. First, and most importantly, a good policy will set forth procedures that will stop sexual harassment in its tracks. Second, a good policy will include mechanisms for the reporting of allegations, timely investigations and prompt corrective action that, if followed, will provide the employer with a good defense to a co-worker harassment claim.

Don’t rely strictly on a title report for disclosure of recorded zoning declarations affecting real property

A recent decision from the Suffolk County Supreme Court reiterated that zoning ordinances are not “defects” in title covered under policies of title insurance. Purchasers and developers are reminded to do their own due diligence, and go beyond the title report, to understand what existing and recorded zoning limitations might affect their prospective property interest.

In JBGR LLC v. Chicago Title Insurance Company (Sup. Ct. Suf Cty., 11/13/18), a developer purchased 286 acres of land in the Town of Riverhead to build a golf course and residential community. At the time of acquisition, 140 units were already developed and the purchasing party was interested in constructing an additional 55 units. The title report issued to the purchaser did not disclose to the buyer that a declaration limiting development to 140 units had been recorded years earlier. The purchaser relied upon the title report, allegedly to its detriment to the extent that the declaration was not disclosed, and sued the title company.

The court ultimately granted summary judgment in favor of the title company and dismissed the complaint. In essence, policies of title insurance indemnify insured for losses due to the “unmarketability of title” except for those losses which arise from exclusions or exceptions to coverage stated in the policy. Those exclusions typically include existing zoning ordinances which may affect the use of the subject property. Here, the court recognized that the recorded declaration clearly affected the purchaser’s expected use of the property, but held that the declaration did not affect the title to the property. Instead, that declaration set forth a zoning regulation, and therefore was an exclusion from title coverage. The purchaser may have relied upon the title report when it purchased the property, but the fact that the title report did not set forth the recorded declaration did not give rise to a claim against the title company.

A title report is just one component in negotiating and consummating a real estate acquisition, and it should not be the only means for understanding the liens, judgments, encumbrances, and restrictions affecting the subject real property. A better course is to conduct a thorough and complete independent analysis of zoning regulations and recorded instruments affecting the real property, instead of relying exclusively on a title report.

Shareholder Meeting Requirements

A meeting of shareholders must be held annually for the election of directors and the transaction of other business on a date fixed under the bylaws. Special meetings of the shareholders may be called by the board and by such person or persons as may be so authorized by the certificate of incorporation or the bylaws.

We’ve represented insurgent shareholder groups where the co-op board has tried to hold an annual meeting for 10 years in a row but never got a quorum – and nobody did anything. If your board can’t seem to get a quorum for an annual meeting, or if you don’t think your board is trying to get a quorum, turn to the law for help. It gives shareholders a way to force the board to call an election to elect directors, regardless of how many shareholders show up.

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Deadline For New York State Employers To Provide Sexual Harassment Training Extended To October 9, 2019

As we previously reported, the New York State Sexual Harassment Law passed in April 2018 requires every New York State employer, even those with one employee, to provide annual sexual harassment training to their employees in compliance with the state’s requirements.

Please be advised that the state has announced that the deadline to provide the training has been extended to October 9, 2019.

Judge Dismisses Warner Wolf’s Age Discrimination Claim Against Imus

On September 27, 2018, Hon. James E. d’Auguste dismissed the age discrimination lawsuit that Warner Wolf commenced against Don Imus earlier this year in Supreme Court, New York County.

Wolf alleged that after he started doing his sports broadcasts for Imus’ show in Florida, instead of in the show’s New York studio, Imus fired him because of his age. Wolf’s support for the claim was comments made by Imus that “it was time to put [Warner] out to pasture” and “shoot him with an elephant dart gun,” and that Wolf was replaced by a broadcaster decades younger than him. Prior to the firing, Imus had told Wolf that his broadcasts from Florida “sucked.”

Judge d’Auguste held that Wolf’s claims against Imus lacked specificity, and ruled that “the only specificity contained in the complaint is stray comments made by Imus, a member of the same protected class.” Judge d’Auguste also held that Wolf did not have a viable claim under New York State Human Rights Law and New York City Human Rights Law because any discrimination would have occurred in Florida where Wolf lived. Media reports indicate that Wolf will appeal the decision.

New York Employers Required To Provide Sexual Harassment Training By January 1, 2019

As we previously reported, the New York State Sexual Harassment Law passed in April 2018 required all employers to:

Adopt the policy prohibiting sexual harassment in the form promulgated by the New York State Department of Labor (the “NYSDOL”) in consultation with the New York State Division of Human Rights, or adopt another policy that equals or exceeds the standards set by NYSDOL; and
Provide annual sexual harassment training for all their employees.

Please be advised that last month NYSDOL announced that employers must provide the required training by January 1, 2019, and that the state’s draft model sexual harassment policy is available on the NYSDOL website.

Columbia U. Professor Awarded $1.25 Million For Retaliation After Her Report Of Sexual Harassment

On July 27, 2018, former Columbia University finance professor, Enrichetta Ravina, was awarded $750,000 by a SDNY jury to be paid by the University and Geert Bekaert, the professor who allegedly harassed her, and $500,000 in punitive damages to be paid by Bekaert only.

Ravina alleged that Bekaert, a senior, tenured finance professor, acted in the capacity of her supervisor while they worked together on a research project. The project, as well as any publications related to it, was the primary work that Ravina planned to submit in support of her tenure application.

Ravina alleged that during the course of the project Bekaert subjected her to unwelcome sexually explicit conversations, including about Bekaert’s personal sexual exploits, and that when she rejected his sexually advances, Bekaert sabotaged and delayed the project. In addition, Ravina alleged that Bekaert made explicit demands for a sexual quid pro quoby telling her that if she were “nicer”, he would allow her work to proceed faster.

Ravina alleged that after she repeatedly complained about Bekaert’s conduct to Columbia University officials, the University retaliated against her by revoking a paid leave period during which she intended to prepare her tenure application, and establishing a short notice deadline for the application, which was rejected in April 2016.

Ravina commenced an action in SDNY alleging claims for gender discrimination, sexual harassment and retaliation. The defendants contended that (a) Ravina’s tenure application was justifiably denied because none of her research papers were published, (b) Bekaert’s conduct was not sufficiently severe to constitute a hostile work environment, and (c) there was no evidence that the tenure denial had any connection to Ravina’s purported rejection of Bekaert’s advances.

During his closing statement, Ravina’s counsel invoked the #MeToo movement, referred to Bekaert as a “privileged white male”, and asked the jury to send a message that Bekaert’s conduct should not be countenanced. The jury denied Ravina’s gender discrimination and sexual harassment claims, but apparently sought to make a statement by hitting Bekaert with a $500,000 punitive damages award.

Defining “Substantial Completion” for Lien Law and Contract Purposes

Jacob Amir contributed an article in Cornerstone, the semi-annual publication of the Associated General Contractors, New York State, a leading trade association representing contractors and related companies in the building and highway construction industry. Jacob’s article addresses the importance of defining “substantial completion” for purposes of Lien Law and general contract claims brought on behalf of contractors.

Third Circuit Decision Sustaining Sexual Harassment Claim Influenced By Impact Of #MeToo Movement

On July 3, 2018, the Third Circuit issued a decision indicating that the #MeToo Movement has caused judges to be more cognizant of the fear of retaliation that victims of sexual harassment frequently feel.

In Minarsky v. Susquehanna County, No. 17-2646, 2018 WL 323243 (3rd Cir. July 3, 2018), Sheri Minarsky, a part-time secretary, brought an action against her employer, Susquehanna (PA) County, asserting claims for gender discrimination as well as sexual harassment through a hostile work environment caused by her supervisor, Thomas Yadlosky.

Minarsky alleged that during the four years she worked for Yadlosky, he regularly harassed her by attempting to kiss her on the lips before he left the office each Friday; approaching her from behind and embracing her; massaging her shoulders and touching her face while she was at her computer or the printer; and sending her sexually explicit emails to which Minarsky did not respond. During her deposition, Minarsky testified that all of Yadlosky’s advances were unwanted.

Minarsky alleged that when the harassment first began, she mildly and jokingly told Yadlosky to stop to no avail. She testified that she feared speaking up because Yadlosky was not fired after other women made complaints about him, and that he would sometimes become “nasty” when challenged. Minarsky further alleged that she did not report Yadlosky’s harassment to his superiors, the County Commissioners and Chief Clerk, because Yadlosky repeatedly warned her not to trust them.

Eventually, however, in April 2013, Minarsky’s doctor told her that she needed to bring an end to Yadlosky’s conduct and she encouraged Minarsky to compose an email to him documenting the conduct. Minarsky followed the doctor’s advice and sent Yadlosky an email on July 10, 2013 stating that she was uncomfortable when he touched and kissed her and asked him to stop. Yadlosky sent an email in response saying that he never meant to make her feel uncomfortable and that she shouldn’t have put her complaint in writing.
Around the same time that the emails were exchanged, a county supervisor overheard another secretary talking about Yadlosky’s harassment of Minarsky. The supervisor reported the conversation to the Chief Clerk, who had previously warned Yadlosky about his inappropriate conduct. The Clerk investigated Yadlosky’s conduct towards Minarsky. During the investigation, Yadlosky admitted that Minarsky’s allegations were true, and he was subsequently fired.

In October 2016, the County filed a motion for summary judgment primarily based on its alleged Faragher-Ellerth affirmative defense, which derives from two decisions issued by the Supreme Court in 1998, in opposition to Minarsky’s claim that the County was vicariously liable for the hostile environment created by Yadlosky. To prevail on that defense, an employer must show that: (1) it exercised reasonable care to avoid harassment and to eliminate it when it might occur; and (2) the plaintiff failed to act with reasonable care to take advantage of the employer’s safeguards and otherwise prevent harm that could have been avoided.

The County’s alleged “safeguards” were set forth in its General Harassment Policy. The policy stated that employees could report any harassment to their supervisors, and that if a supervisor was the source of the harassment, an employee could report the conduct to the Chief County Clerk or a County Commissioner.
By a decision dated June 28, 2017, the District Court granted the County’s motion for summary judgment. On appeal, Minarsky contested only the District Court’s dismissal of her claim of sexual harassment based on a hostile work environment.

The Third Circuit reversed the District Court’s decision finding that the County failed to meet its burden with respect to the second element of the Faragher-Ellerth defense because “Minarsky asserts several countervailing forces that prevented her from reporting Yadlosky’s conduct to [the Chief Clerk] or a County Commissioner: her fear of Yadlosky’s hostility on a day-to-day basis and retaliation by having her fired; her worry of being terminated by the Chief Clerk; and the futility of reporting, since others knew of his conduct, yet it continued. All of these factors were aggravated by the pressing financial situation she faced with her daughter’s cancer treatment.”

In reaching its decision, the Third Circuit recognized the impact of the #MeToo Movement; specifically, the fears of retaliation of which victims have spoken. The Court said:

This appeal comes to us in the midst of national news regarding a veritable firestorm of allegations of rampant sexual misconduct that has been closeted for years, not reported by the victims. It has come to light, years later, that people in positions of power and celebrity have exploited their authority to make unwanted sexual advances. In many such instances, the harasser wielded control over the harassed individual’s employment or work environment. In nearly all of the instances, the victims asserted a plausible fear of serious adverse consequences had they spoken up at the time that the conduct occurred.

A trial of Minarsky’s claim will be scheduled, and its merits will be decided by a jury.