The New York Court of Appeals (Court) recently held that New York City Human Rights Law (NYCHRL) and New York State Human Rights Laws (NYSHRL) protect nonresidents who are proactively applying for employment in either the city or the state. In Syeed v. Bloomberg, the Court was asked to answer a certified question from the Second Circuit Court of Appeals: how does the “impact test” apply to a situation where the plaintiff claiming discrimination is a non-New York resident? This article will discuss the Court’s answer to this question and the effect this has on employers.
The “impact test” a nonresident is required to pass under both the NYSHRL and the NYCHRL stems from the case Hoffman v. Parade Publics. There, a Georgia resident working for a New York-headquartered company, was required to plead and prove that his termination due to his age impacted him within New York. This can be done by demonstrating either the plaintiff worked in New York or that the alleged conduct had some impact on the plaintiff within New York. In Hoffman, the plaintiff was unable to prove either because all he could show was that the decision to terminate him was made in New York. This Georgia resident intended to remain working at the New York company’s Georgia branch. The fact that an employment decision was made in New York is not enough to show a plaintiff felt a discriminatory impact in the city or state.
The Court made it a point to distinguish Hoffman. In Syeed v. Bloomberg, the plaintiff worked for Bloomberg Media in its D.C. bureau. The plaintiff was seeking to be promoted to Bloomberg’s New York bureau but was told the position was not hiring for “diversity slots,” thus they were denied the job. The Court interpreted the New York job position to mean the plaintiff had to physically be present in New York since that is where the job was based.
The Court held that the plaintiff personally felt the impact of the defendant’s discriminatory decision because it denied the plaintiff the chance of working or being promoted in New York and possibly relocating there as well. The Court expanded the terms “inhabitant” and “individual within the state” to include prospective inhabitants and employees as well.
Deciding this case under both NYSHRL and NYCHRL, the Court held that the provisions within these statutes are to be liberally construed to offer expansive protection to out-of-state employees who are seeking to move to New York for work. If it is reasonably possible, courts will construe Human Rights Laws “broadly” to favor a plaintiff claiming discrimination. The Court held that this broad construction not only protects the employee, but New York City and New York State from being deprived of economic and civic contributions from new citizens wishing to work in the area.
The Remote Employee Dilemma
Working remotely became increasingly popular during the COVID-19 pandemic, with many employers choosing to continue their operations remotely. With this popularity also came the choice of law issue in deciding which state law will apply to a remote employee’s lawsuit. Since the Court limited its analysis to jobs that would require an applicant to be physically present in New York, analyzing national trends and case law is necessary to gain insight into whether remote employees may gain legal protections from a state where they do not currently reside.
Earlier case law illustrates that out-of-state remote employees may also be able to reap the benefits of the NYCHRL. Rinsky v. Cushman & Wakefield dealt with a Massachusetts resident who was led to believe they were able to continue their employment for a New York City based employer on a remote basis. After the plaintiff was told by the employer that he could work remote from Boston, the plaintiff moved from New Jersey to Massachusetts where he worked for the employer for two months, but was subsequently terminated. The plaintiff filed a discrimination lawsuit in Massachusetts where the court determined that NYCHRL should apply. On appeal, the employer claimed that because the plaintiff was not a New York resident at the time of his termination, NYCHRL should not apply. The First Circuit Court of Appeals rejected the employer’s argument and held it did not want to create a loophole that allowed New York employers to incentivize employees to work remotely in another state, only to turn around and claim immunity from liability under the NYCHRL. The Supreme Court of the United States refused to hear the employer’s appeal.
New Jersey courts have also broadly applied their anti-discrimination laws to prevent out-of-state residents and job applicants from being discriminated against. For example, in Schulman v. Zoetis, Inc., a 2023 New Jersey District Court held that a New Hampshire plaintiff, who worked remotely for a New Jersey headquartered employer, was entitled to the protections afforded by the New Jersey Law Against Discrimination (LAD). Schulman emphasized that the most important consideration is the location where the conduct causing the injury occurred.
New Jersey’s Division on Civil Rights (DCR) published a guidance in 2024 to further clarify and explain how the LAD applies to employees working remotely for a New Jersey based employer. The DCR stated that LAD protects out-of-state residents because the law states “all persons” have the opportunity to gain employment without being discriminated against. The DCR interprets “all persons” to be an expansive term that is not geographically restricted. The LAD prohibits employers from refusing to hire “any individual” for a discriminatory purpose. The location of such an individual does not matter under the provision of the LAD.
California is known for its strong laws that protect employees. Normally, these comprehensive laws only apply to residents who reside in California. However, California permits an extraterritorial application of its labor laws to scenarios where California is the employer’s principal place of business. If an out-of-state employee works for a California-based employer, the employee may be considered a California employee since they spend a considerable amount of time conducting business with California based employees.
Takeaway
The New York Court of Appeals’ decision in Syeed v. Bloomberg marks a significant expansion of the protections offered under the NYCHRL and NYSHRL to include nonresidents seeking employment in New York. Although the New York Court of Appeals left the question of whether the Court’s ruling applies to remote employees who live out of state, national trends indicate that a remote employee may benefit from the laws of the employer’s headquarters. To mitigate any potential claims from out-of-state employees as well as potential out-of-state applicants, employers are encouraged to review their hiring and promotion policies, as well as familiarize themselves with the discrimination laws of their home-based state and the extraterritorial reach of such laws.
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