In Knox v. John Varvatos Enterprises Inc., 17-CV-772, 2021 WL 95914 (S.D.N.Y. Jan. 12, 2021) – a gender discrimination class action lawsuit – the court, inter alia, upheld the jury’s finding that defendant engaged in gender discrimination under Title VII of the Civil Rights Act of 1964 and the New York State Human Rights Law. (I discussed the court’s rejection of defendant’s “Bona Fide Occupational Qualification” defense here.)
In sum, plaintiff’s claims stemmed, inter alia, from a “clothing allowance” given to male employees, but not to female employees.
As background, the Varvatos dress code required the male sales professionals to wear at least three articles of specified Varvatos-branded clothing while on the sales floor. See Appearance and Dress Standards at 1, annexed as Exhibit 1 to Hassan Decl. (“Dress Code Policy”) (Trial Exhibit A). It required female sales professionals to wear outfits that were “appropriate for the work environment and representative of the brand.” Id. To assist the males in complying with the dress code, Varvatos’s Clothing Allowance allowed male sales professionals to select and keep Varvatos clothing worth $3000 at retail prices four times per year — once for each season.3 The selections were known as “pulls.” (See Tr. 46-47). Female sales professionals were not provided any free clothing. (Tr. 47:17-19). Instead, female sales professionals (and not the males) received a 50 percent discount on women’s clothes at “AllSaints,” a sister brand of Varvatos.
The court summarized the applicable legal standard:
[Title VII,] 42 U.S.C. § 2000e-2(a)(1) provides in pertinent part that “[i]t shall be an unlawful employment practice for an employer … to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s … sex….” A separate section, 42 U.S.C. § 2000e-2(m), provides that “an unlawful employment practice is established when the complaining party demonstrates that … sex … was a motivating factor for any employment practice, even though other factors also motivated the practice.” See also Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 85 (2d Cir. 2015) (“an action is ‘because of’ a plaintiff’s race, color, religion, sex, or national origin where it was a ‘substantial’ or ‘motivating’ factor contributing to the employer’s decision to take the action”) (citation omitted).
Applying the law, the court held that the evidence met this standard. Notably, it held that
Here, it was undisputed that the difference in compensation between plaintiffs and male sales professionals aligned exclusively on the sex of the employee. The Clothing Allowance Policy was unequivocal on this point. A male employee was given the Clothing Allowance. A female employee was not. Thus, using any normal meaning of the term “motive,” the uncontroverted evidence was that sex was not merely “a” motivating factor in this differential in treatment. It was the only motivating factor.
Particularly interesting, however, was the court’s evaluation (and rejection) of defendant’s argument that it did not have an “intent to discriminate against women”, based on the fact that having males wear Varvatos clothing was a “marketing tool” and that the only reason it did not give females the clothing allowance was because it did not market women’s clothing, and the fact that it paid men and women the same hourly wages and commissions.
From the decision:
Varvatos’s error is assuming that intent to discriminate requires proof of some kind of malevolent bias. In fact, 42 U.S.C. § 2000e-2(m) requires only that sex was a “motivating” factor for the employment practice, not that the practice arose from a desire to harm the protected class. As the Supreme Court has squarely held, “the absence of a malevolent motive does not convert a facially discriminatory policy into a neutral policy….” UAW v. Johnson Controls, Inc., 499 U.S. 187, 199, 111 S.Ct. 1196, 113 L.Ed.2d 158 (1991).
This obvious reading of the statute is confirmed here by applying the three-step burden-shifting framework established by McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), which applies to both Title VII and NYSHRL employment discrimination claims, see, e.g., Lenzi v. Systemax, Inc., 944 F.3d 97, 107 n.7 (2d Cir. 2019). Under that framework, “[a] showing of disparate treatment — that is, a showing that the employer treated plaintiff ‘less favorably than a similarly situated employee outside his protected group’ — is a recognized method of raising an inference of discrimination for purposes of making out a prima facie case.” Mandell v. Cty. of Suffolk, 316 F.3d 368, 379 (2d Cir. 2003) (quoting Graham v. Long Island R.R., 230 F.3d 34, 39 (2d Cir. 2000)). The burden then shifts to the employer to provide a “legitimate[,] nondiscriminatory” reason for the disparate treatment. Id. at 380; accord Garcia v. Barclays Capital, Inc., 281 F. Supp. 3d 365, 375 (S.D.N.Y. 2017). Varvatos’s reason for the difference in pay, however, is based entirely on the Clothing Allowance policy, which explicitly discriminates between men and women in that it gives the Clothing Allowance only to male employees, not female employees.
Thus, Varvatos did not give a “nondiscriminatory” explanation for the difference in pay and the inference of discrimination raised under the McDonnell Douglas Corp. framework was never rebutted. Mandell, 316 F.3d at 380.
As the Supreme Court has noted, “the beneficence of an employer’s purpose does not undermine the conclusion that an explicit gender-based policy is sex discrimination ….” Johnson Controls, 499 U.S. at 200, 111 S.Ct. 1196. In the end, Varvatos’s “policy does not pass the simple test of whether the evidence shows treatment of a person in a manner which but for that person’s sex would be different,” and thus the jury could reasonably find intentional discrimination. Id. (citation and quotation marks omitted).
The court also rejected defendant’s argument that the jury could not have made this inference, on the basis of case law finding “that sex-specific dress codes and grooming standards do not themselves discriminate based on sex”, finding these cases irrelevant because plaintiffs “never challenged the permissibility of the dress code” and “never argued its applicability to the jury as a basis for finding discrimination or for any other purpose.”