By Rob Whitman, Elliot Fink, and Paxton Moore

Seyfarth Synopsis: New York’s highest court, settling a long-standing question dividing state and federal courts, has held that the New York State and City anti-discrimination statutes apply to non-residents who apply for jobs that would be based physically in the State or City.

In the opinion, the court explained that when a non-resident applicant is denied a State- or City-based job based on discrimination prohibited by the statutes, the “impact” of that discrimination is felt locally because the applicant “loses the chance to work, and perhaps live, within those geographic areas.” In so holding, the court applied the “impact test” it first laid out in 2010 in Hoffman v. Parade Publications, under which statutory coverage depended on whether the “impact” of the alleged discrimination was felt in the State or City.

Before this new decision, New York courts had narrowly construed the Hoffman test and held that, in order for a plaintiff to be protected by the New York State or New York City Human Rights Laws, the victim of the alleged discrimination must be physically present in the State or City.

Following Hoffman, courts applying the “impact test” generally interpreted it strictly, particularly in the context of job applicants. For example, one federal court dismissed a remote employee’s claims where she expected to work in-person in New York City when her employer’s offices reopened after COVID-19 closures were lifted, but was terminated before that occurred. The court held that the plaintiff’s expectation to work in the City was insufficient, because “[p]leading impact in New York City by unspecified future career prospects” would be an “impermissible broadening” of the statutes.

On the other hand, a federal court determined that a plaintiff who was terminated while working remotely from his New Jersey home during the pandemic met the impact test under the State and City Human Rights Laws. Another federal court held that the impact requirement is clearly satisfied by job applicants applying for jobs in New York State or City.

Until now, New York’s highest court had not weighed in on this question. The Court of Appeals in this new opinion clarified the law by holding explicitly that the plaintiff’s anticipated physical presence in New York State or City was sufficient to satisfy the “impact test.” The plaintiff, a Washington-D.C.-based woman of South Asian descent, alleged that her employer discriminated against her when it refused to transfer her to one of several open, in-person positions in New York City. She resigned and claimed that she was subjected to a constructive discharge based on the denial of the New York-based positions.

The U.S. District Court dismissed the plaintiff’s claims under Hoffman. On appeal, the Second Circuit noted the conflicting decisions involving out-of-state applicants and certified the question to the Court of Appeals, which held that the statutes apply to the plaintiff’s circumstances (but without addressing the merits of her claims). It buttressed its conclusion by noting that discriminatory conduct toward out-of-state job applicants harms not only the applicants but also “the state and the city [which] are deprived of . . . economic and civic contributions from [these] individuals.”

Critically, the Court of Appeals made clear that its holding is limited to positions “that require[] the employee to be physically present in New York” (emphasis added). Thus, the anti-discrimination statutes do not apply where a non-resident is seeking a remote position for a New York City or State employer.

This decision reaffirms that all employers should ensure that any hiring for positions based in New York State or New York City, regardless of the location of the applicant, are handled on a non-discriminatory basis in compliance with the strict requirements of the applicable statutes. Employers with questions about navigating the effects of this decision should reach out to Seyfarth for specific guidance.