Sexual Harassment and Other Claims Discontinued Against Predecessor Entity

In Schwartz v. Integrated Dental Sys., LLC et al, 2018 NY Slip Op 32574(U), Index No. 157816/2017 (Sup. Ct. NY Cty. Oct. 12, 2018), plaintiff asserted claims of age discrimination, gender discrimination, sexual harassment, and retaliatory termination against various defendants, including two entities: Integrated Dental Systems and Megagen USA. In 2013, IDS bought the assets of Megagen and took over as plaintiff’s employer.

This decision illustrates how a court might address an allegation, such as that made here, by a defendant that it is not a proper party. From the decision:

Megagen’s main argument·is that it is not the proper defendant in this action. While part of plaintiffs duration as an employee occurred under Megagen, after its assets were sold to IDS,
IDS became her employer. There is no dispute that such a sale occurred. For all practical purposes, it would be futile to seek damages from a party lacking assets such as Megagen.
Moreover, the successor liability issue is not applicable here, as Megagen is not a successor. In addition, the three-year statute of limitations was not tolled as against Megagen regarding the federal complaint filed by plaintiff, which was only brought against IDS. Therefore, dismissal is warranted as to defendant Megagen.