In this underlying action alleging discrimination in violation of the New York State Human Rights Law (NYSHRL), defendant Clover Stables LLC moves for summary judgment dismissing plaintiff Sarah Grasso’s complaint, pursuant to CPLR 3212, on the basis that the NYSHRL previously excluded employers with less than four employees. Papers Considered NYSCEF DOC NO. 52-68; 70 1. Notice of Motion/Affirmation of James Cassidy/Exhibit A/Affirmation of Ben B. Evans, Esq./Exhibits A-D/Statement of Material Facts/Memorandum of Law 2. Memorandum of Law in Opposition/Response to Statement of Material Facts/Affirmation of Daniel Edward Dugan, Esq. in Opposition/Exhibits 1-2 3. Memorandum of Law in Reply DECISION & ORDER FACTUAL AND PROCEDURAL BACKGROUND Plaintiff commenced this action on or about August 18, 2020 by filing a summons and complaint. Defendants Clover Stables and Cassway Contracting Corp. (Cassway), together, joined issue by the filing of their answer on November 5, 2020. Cassway filed a notice of bankruptcy on April 12, 2022 and Clover Stables states that Cassway was severed from this action when it declared bankruptcy. Plaintiff commenced her employment with defendants in September 2018. The complaint alleges that plaintiff was an employee of both Cassway and Clover Stables and that James Cassidy is the owner of both defendants. Plaintiff alleges that she was salaried employee of Cassway, hired to be the office manager at Clover Stables. As part of her job duties, plaintiff handled the record keeping and lesson scheduling, among other things. Plaintiff was also compensated by Clover Stables on a commission basis as a riding instructor. Plaintiff alleges that she became disabled on or around October 13, 2019 due to pregnancy-related conditions. She notified defendants and submitted her approved maternity leave to Cassway. Prior to plaintiff’s expected return on December 21, 2019, plaintiff was informed that a new officer manager was hired to perform plaintiff’s duties and that there were no salaried positions available for her. Although she was advised that she could return as a riding instructor, the commission rate would be lower than what she received prior to her maternity leave. The complaint sets forth one cause of action, alleging that, in violation of the NYSHRL, “plaintiff was terminated from employment due to her pregnancy related disability and perceived disability in response to her maternity leave request.” Complaint, 20. Clover Stables moves for summary judgment dismissing the complaint, on the basis that it had less than four employees during the relevant time period and thus, falls outside the purview of the NYSHRL. In support of the motion, Clover Stables submits the parties’ testimony and the affidavit of James Cassidy. Cassidy was the owner of both Cassway Contracting and Clover Stables during the relevant time. Cassidy affirms that he is the owner and managing member of Clover Stables, a horse training facility. It is a “small, closely held, family business,” that began operating in 2017. Cassidy testified that Cassway was a drywall company that employed approximately 350-400 people until its bankruptcy. Cassidy states that when he decided to upgrade the stables, during the construction process, his “former business Cassway Contracting Corp.” hired plaintiff to keep track of job costs associated with building the new stable. Plaintiff’s regular paychecks were provided by Cassway. Plaintiff was also hired, on a freelance basis, to teach riding lessons and train horses. Clover Stables notes plaintiff’s testimony that when she started teaching lessons at Clover Stables, there were maybe two other riding instructors. Cassidy affirms that the work done at Clover Stables was completely different than the work done with Cassway, and was strictly on a commission basis. Plaintiff was purportedly never advised that she was an employee of Clover Stables. Cassidy summarizes that the motion should be granted because at the time plaintiff “was a riding instructor at Clover Stables, there were zero full-time employees. In 2019 and early- 2020 when the alleged discrimination occurred, everyone who worked at Clover Stables was either an employee of Cassway Contracting Corp. or an independent contractor.” In addition to the testimony provided, Clover Stables alleges that plaintiff was an independent contractor when she taught riding lessons and that it did not discriminate against her. However, Clover Stables argues that, for purposes of this motion, the only dispositive question is whether Clover Stables employed more than four people in December 2019 and January 2020. As Clover Stables did not, plaintiff’s complaint should purportedly be dismissed because the applicable NYSHRL did not apply to employers with fewer than four people. In opposition, plaintiff argues that she was jointly employed by Cassway and Clover Stables and that Clover Stables cannot avoid liability under the NYSHRL just by claiming that it employed fewer than four people. Plaintiff alleges that, in September 2018 she commenced employment with defendants in a dual role as an office manager and a horseback riding instructor at Clover Stables. Plaintiff testified that she was first interviewed by Cassidy and employed as a riding instructor at Clover Stables. She then met with Cassidy and he hired her to perform record keeping and billing work at Clover Stables. Plaintiff testified that she was a salaried employee of Cassway, who performed her duties as officer manager at Clover Stables. “Well, I was employed by Mr. James Cassidy, and the way I was compensated, my checks that would receive for pay, one of them came directly from the Clover Stables and the other one came from Cassway Contracting. That one was for my salary position.” Plaintiff explained that her commissioned-based check would fluctuate based on the number of lessons she gave and that it would have the Clover Stables name on it. Plaintiff alleges that, as defendants operated as a joint employer, Clover Stables is jointly liable for the violations of the NYSHRL. Citing caselaw that addresses a single employer, or single integrated enterprise, plaintiff argues that the two separate entities are owned and controlled by Cassidy. Plaintiff alleges that Cassidy owned and operated both Clover Stables and Cassway Contracting at the time of plaintiff’s employment, paid employees of both entities through the Cassway Contracting payroll and that he had full control over both entities. In reply, Clover Stables states, in relevant part, that for purposes of this motion, it has assumed that plaintiff was an employee during the relevant time. According to Clover Stables, the combined number of employees between Cassway and Clover Stables should not be considered in determining whether the NSYHRL governs Clover Stables because small employers like Clover Stables are explicitly excluded from the NYSHRL. DISCUSSION I. Summary Judgment “The proponent of a motion for summary judgment must demonstrate that there are no material issues of fact in dispute, and that it is entitled to judgment as a matter of law.” Dallas- Stephenson v. Waisman, 39 AD3d 303, 306 (1st Dept 2007). The movant’s burden is “heavy,” and “on a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party.” William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh, 22 NY3d 470, 475 (2013) (internal quotation marks and citation omitted). Upon proffer of evidence establishing a prima facie case by the movant, “the party opposing a motion for summary judgment bears the burden of produc[ing] evidentiary proof in admissible form sufficient to require a trial of material questions of fact.” People v. Grasso, 50 AD3d 535, 545 (1st Dept 2008) (internal quotation marks and citation omitted). “A motion for summary judgment should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility.” Ruiz v. Griffin, 71 AD3d 1112, 1115 (2d Dept 2010) (internal quotation marks and citation omitted). II. NYSHRL Pursuant to the NYSHRL, as set forth in Executive Law §296 (1) (a), it is an unlawful discriminatory practice for an employer to refuse to hire or employ, or to fire or to discriminate against an individual in the terms, conditions or privileges of employment because of the individual’s sex or familial status. Although pregnancy is not explicitly listed in the statute, “discrimination on the basis of a woman’s pregnancy…constitutes discrimination on the basis of sex [under the NYSHRL].” Wilcox v. Cornell Univ., 986 F Supp 2d 281, 285 (SD NY 2013) (internal quotation marks and citation omitted). The NYSHRL provides the “same sort of protection” for pregnancy as Title VII. Quaratino v. Tiffany & Co., 71 F3d 58, 63 (2d Cir 1995). Until February 8, 2020, Executive Law §292 (5) stated that “[t]he term employer does not include any employer with fewer than four persons in his or her employ.” According to Clover Stables, plaintiff’s complaint alleging violations under the NYSHRL must be dismissed as it did not have four employees during the time of the alleged discrimination. See e.g. DeStefano v. Kopelman, 265 AD2d 446, 446 (2d Dept 2009) (Dismissing the action brought pursuant to Executive Law §296 (1) (a), as “[a]t no time during the period in which the alleged harassing behavior occurred did the defendant employ four or more persons”). The parties do not address the substantive issues related to the discrimination claim and, for purposes of this motion only, Clover Stables has assumed that plaintiff was its employee. Accordingly, in support of its motion, through the testimony, Clover Stables has established that at the time of the allegedly discriminatory conduct, it did not employ four or more employees. However, in opposition, plaintiff has raised a triable issue of fact as to whether Clover Stables has more than four employees under the single employer doctrine. The “single employer” doctrine, where applicable, allows plaintiffs alleging discrimination under the NYSHRL to aggregate employees in related entities to reach the numerosity requirement. See e.g. Argyle Realty Assocs. v. New York State Div. of Human Rights, 65 AD3d 273, 282 (2d Dept 2009) (“Accordingly, we find that, pursuant to the single employer doctrine and in furtherance of the underlying purpose of the Human Rights Law and the liberal construction thereof, it is proper to aggregate the employees of Argyle Realty and DAL Management, which in 1995 collectively numbered four, and thus, Argyle Realty is deemed to be an ‘employer’ within the meaning of Executive Law §292 (5)”). Courts have explained that “[t]he joint employer doctrine, along with the single employer (or single integrated employer) doctrines have been developed to allow a plaintiff to assert employer liability in the employment discrimination context against entities that are not her formal, direct employer.” Griffin v. Sirva Inc., 835 F3d 283, 292 (2d Cir 2016) (internal quotation marks and citations omitted). The single employer doctrine applies “where two nominally separate entities are actually part of a single integrated enterprise. In such circumstances, of which examples may be parent and wholly-owned subsidiary corporations, or separate corporations under common ownership and management, the nominally distinct entities can be deemed to constitute a single enterprise. There is well-established authority under this theory that, in appropriate circumstances, an employee, who is technically employed on the books of one entity, which is deemed to be part of a larger single-employer entity, may impose liability for certain violations of employment law not only on the nominal employer but also on another entity comprising part of the single integrated employer.” Arculeo v. On-Site Sales & Mktg., LLC, 425 F3d 193, 198 (2d Cir 2005) (internal quotation marks and citations omitted).1 To determine whether two or more companies should be considered a single entity for employment discrimination claims, courts rely on four criteria: “(1) interrelation of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership or financial control of the entities in question. Of the four criteria, centralized control of labor relations is generally considered the most significant.” Argyle Realty Assocs. v. New York State Div. of Human Rights, 65 AD3d at 279 (internal citations omitted). Viewing the facts in the light most favorable to the non-moving party, plaintiff has raised a triable issue of fact as to whether, under the single employer doctrine, Clover Stables meets the four-employee threshold of the NYSHRL. Plaintiff alleges that after attempting to return to work after an approved maternity leave, she was advised that her position as an office manager was given to someone else. Although the riding instructor position was still available, plaintiff was informed that the commission rate would be reduced from what she used to receive. According to plaintiff, defendants discriminated against her by failing to return her to the same or comparable position and wage upon return from maternity leave. The relevant facts and testimony indicate that Cassidy owned and operated both Clover Stables and Cassway Contracting. Plaintiff testified that she was hired by Cassidy to teach riding lessons and then offered a record keeping position at Clover Stables. The checks received for the office manager position were issued by Cassway and the checks received for riding lessons were issued by Clover Stables. As a result, plaintiff has established that there was “common management, common ownership and common financial control” of Clover Stables and Cassway. Argyle Realty Assocs. v. New York State Div. of Human Rights, 65 AD3d at 281. Further, “the evidence sufficiently established centralized control of labor relations” between the defendants. Id. at 282. Clover Stables argues that, as a small business, it has been specifically excluded from the NYSHRL. However, courts have found that where applicable, a “refusal to apply the single employer doctrine would allow small employers to evade the Human Rights Law altogether.” Id. Accordingly, under the circumstances, Clover Stables’ motion is denied, as plaintiff has raised a triable issue of fact as to whether Clover Stables and Cassway were a single integrated enterprise at the alleged time of the plaintiff’s employment. All other arguments raised on this motion and evidence submitted by the parties in connection thereto have been considered by this court notwithstanding the specific absence of reference thereto. CONCLUSION Accordingly, it is hereby ORDERED that defendant Clover Stables LLC’s motion for summary judgment dismissing the complaint is denied. The parties are directed to appear for a virtual settlement conference on October 21, 2024 at 11:00 a.m. subject to confirmation by the virtual conference link emailed by this Court. Dated: September 10, 2024
