Shaughnessy v. Scotiabank

Background

Michael Shaughnessy alleged that Scotiabank failed to promote him to a Director-level position because of his age and retaliated after he complained about age discrimination. He also asserted age-discrimination and retaliation claims under the New York State Human Rights Law and the New York City Human Rights Law. He sued Scotiabank and three individual defendants: Kay Lazidis, Michael Trombly, and Elyssa Herman.

Shaughnessy was 61 when he was denied the Director-level role. Although he was hired as an independent contractor through Procom, he alleged that Scotiabank controlled his work, assigned his projects, set his hours and deadlines, provided his equipment and email account, evaluated his performance, and treated him like an employee. He worked in Scotiabank’s New York City office for nearly ten months before the COVID-19 pandemic led to remote work from his home in Connecticut. He alleged that the remote work was temporary and that he remained assigned to the New York City office.

Shaughnessy alleged that he accepted an offer to fill a Director position, but Scotiabank later gave the position to a woman in her 40s. He complained internally that the decision was based on his age and later filed a discrimination charge with the Equal Employment Opportunity Commission. Scotiabank then denied him paid medical leave and ended his contract early, according to the allegations.

Motions and Issues

The defendants moved under Rules 12(b)(1) and 12(b)(6) to dismiss the New York State and City claims. Rule 12(b)(1) concerns the court’s power to hear a case, while Rule 12(b)(6) concerns whether the complaint alleges enough facts to state a legally viable claim. The defendants also moved under Rule 26(d) for expedited discovery concerning Shaughnessy’s employment status.

The main issues were whether Shaughnessy plausibly alleged that he was an employee protected by the federal Age Discrimination in Employment Act, whether his work location prevented him from invoking the New York laws, and whether the claims against the individual defendants were adequately pleaded.

Court’s Analysis

The court held that Shaughnessy plausibly alleged that he was Scotiabank’s employee under the fact-specific test used to distinguish employees from independent contractors. The court gave particular weight to Scotiabank’s alleged control over how, when, and where he worked. The court also considered Scotiabank’s assignment of projects, supervision, equipment, work hours, office location, hourly compensation, and long-term assignments. The court stated that a fuller factual record could produce a different conclusion later, but the allegations were sufficient at the motion-to-dismiss stage to invoke federal age-discrimination protection.

The court allowed both ADEA claims to proceed. It treated the alleged failure to hire as a failure-to-promote claim because Shaughnessy alleged that he was already working for Scotiabank and had accepted the Director-level position. The court found that the timing of the events, including the change in treatment after certain defendants first saw Shaughnessy’s appearance, the withdrawal of the promotion, and allegations that Scotiabank preferred younger employees, plausibly supported an inference of age discrimination. The retaliation claim also survived because the defendants did not move to dismiss it in their opening brief and the court declined to consider an inadequately briefed argument.

The court rejected the argument that Shaughnessy’s remote work in Connecticut automatically barred his New York State and City claims. It concluded that he had plausibly alleged an impact in New York because he had worked in Scotiabank’s New York City office before the pandemic, worked remotely only because of temporary government and company requirements, remained assigned to the New York City office, and was scheduled to return there shortly after his contract was ended. The court also relied on a recent New York Court of Appeals decision holding that the New York laws can protect nonresidents who seek a New York-based job opportunity.

The court allowed the New York State and City discrimination and retaliation claims to continue against Scotiabank. It dismissed the discrimination and retaliation claims against Herman, Lazidis, and Trombly. For the New York State claims, the court held that the individual defendants could not qualify as Shaughnessy’s employers. For the New York City claims, the court found that the complaint alleged discriminatory and retaliatory conduct by Scotiabank, not sufficient individual conduct by those defendants.

The court dismissed the aiding-and-abetting claims against the individual defendants with prejudice. It found that Shaughnessy had not plausibly alleged that they participated in the retaliation or shared Scotiabank’s retaliatory purpose. The court also found a timing problem with the discrimination theory: the individual defendants’ alleged conduct occurred before Scotiabank’s decision not to promote Shaughnessy. The court further stated that a person cannot aid and abet his or her own alleged primary conduct.

The court denied expedited discovery. It held that the request was moot and unreasonable because the defendants had not shown irreparable harm, and separating discovery on employment status would be inefficient and could delay the case.

Disposition

The motion to dismiss was granted in part and denied in part. Counts Three, Four, Six, and Seven were dismissed as to Herman, Lazidis, and Trombly but survived as to Scotiabank. Counts Five and Eight were dismissed with prejudice. Herman, Lazidis, and Trombly were dismissed from the action and removed from the civil docket. The motion for expedited discovery was denied. Judge Preska also scheduled a settlement conference involving Shaughnessy, Scotiabank, and counsel.