New York’s Highest Court Clarifies Standard for Punitive Damages Under the New York City Human Rights Law

In Chauca v. Abraham, 2017 NY Slip Op 08158, 2017 WL 5557932 (N.Y. Nov. 20, 2017), the New York Court of Appeals – answered a certified question from the U.S. Court of Appeals for the Second Circuit – regarding the appropriate standard applicable for when punitive damages may be awarded under the New York City Human Rights Law.^[1]See N.Y.C Admin Code § 8–502[a].

The court concluded:

[C]onsistent with the New York City Council’s directive to construe the New York City Human Rights Law liberally, the common law standard as articulated in Home Insurance Co. v. American Home Prods. Corp. (75 N.Y.2d 196, 203–204 [1990]) applies. Accordingly, a plaintiff is entitled to punitive damages where the wrongdoer’s actions amount to willful or wanton negligence, or recklessness, or where there is a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard[.] …

NYCHRL violations, by their very nature, inflict serious harm “to both the persons directly involved and the social fabric of the city as a whole” (Rep of Comm on Gen Welfare, Local Law No. 85 [2005], 2005 N.Y. City Legis Ann, at 537). The standard for punitive damages articulated in Home Insurance, while requiring an appropriate showing of heightened culpability for punitive damages consistent with the language of the provision at issue, is nevertheless properly reflective of the serious and destructive nature of the underlying discriminatory conduct and the goal of deterring “future reprehensible conduct” (Ross, 8 NY3d at 489). Furthermore, subjecting NYCHRL defendants to punitive damages under this standard encourages nondiscriminatory behavior and the development and application of appropriate employment criteria. In sum, this approach is the most liberal construction of the statute that is “reasonably possible” and furthers the purpose of the NYCHRL.

It rejected the standard previously applied by the Second Circuit in Farias v. Instructional Systems, Inc., 259 F3d 91 (2d Cir. 2001), which applied the Title VII standard to NYCHRL claims. Under that standard, “a plaintiff must show that a defendant engaged in intentional discrimination with malice or reckless indifference to a protected right in order to obtain punitive damages under the NYCHRL.”