Appellate Division Adopts "Single Employer Doctrine" for Human Rights Law

Under New York's Human Rights Law an employer is prohibited from discharging an employee because of her sex. Executive Law § 296(1)(a). Case law establishes that this includes discharging her because she is pregnant. Executive Law § 292(5) states that "[t]he term 'employer' does not include any employer with fewer than four persons in his employ."

The Appellate Division, Second Department, in a matter of first impression in New York, has now ruled that in determining whether an employer has four or more employees, and is therefore covered by the Human Rights Law, it is proper to aggregate all the employees who work for interrelated business entities. Matter of Argyle Realty Associates v. New York State Division of Human Rights.

While the payroll records of the realty company for which a woman worked showed it had three or fewer employees, the evidence showed that the company had common management, common ownership, and common financial control with two other companies. Following the example of the National Labor Relations Board, and the example of federal courts in enforcing federal civil rights laws, the Appellate Division rules it will adopt the "single employer doctrine" and aggregate the number of employees of the realty company and its interrelated companies to find that the "employer" has four or more employees and is, therefore, covered by the Human Rights Law. The Court concluded that there is substantial evidence the employer discharged the employee because she was pregnant.