HAYES v. G&E REAL ESTATE MANAGEMENT SERVICES

Background

Shannon Hayes sued G&E Real Estate Management Services, doing business as Newmark, under 42 U.S.C. § 1981, a federal law protecting equal rights to make and enforce contracts. She alleged employment discrimination based on race and retaliation for complaining about discrimination.

Hayes alleged that she is African American and worked for Newmark as an Assistant Facilities Manager beginning in 2019. She said that, after Cheryl Winkelmann became her supervisor, Winkelmann repeatedly denied her paid-time-off requests while granting requests from non-African American employees. Hayes also alleged that Winkelmann said “Black lives don’t matter” when Hayes requested time off to attend a Black Lives Matter rally and later told her that the company’s insurance was better than “Obamacare.”

Hayes further alleged that she complained several times to Newmark managers, filed a discrimination complaint with the Equal Employment Opportunity Commission on December 30, 2021, and participated in an unsuccessful agency mediation in February 2022. She claimed that she later received a negative performance review, was given menial work, was denied information and meetings needed for her job, was subjected to increased scrutiny, and was threatened with termination if she communicated with anyone other than Winkelmann. Hayes resigned in May 2022, believing that her termination was imminent.

Procedural History and Standard

Newmark moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. At this stage, the court accepts well-supported factual allegations as true and asks whether they plausibly suggest that the defendant is liable. The case had previously been transferred from the United States District Court for the District of Columbia to the Southern District of New York; the earlier court did not decide the motion to dismiss.

Discrimination Claim

The court held that Hayes plausibly alleged a race-discrimination claim under Section 1981. It applied the framework commonly used for employment-discrimination claims, under which a plaintiff must provide facts supporting a minimal inference that race motivated an adverse employment action.

The court explained that, after the Supreme Court’s decision in Muldrow v. City of St. Louis, a discriminatory employment action need not cause a significant or substantial disadvantage. It must, however, cause some harm affecting an employment term or condition and leave the employee worse off.

The court found that Hayes plausibly alleged harm from her negative December 2021 performance review. Although the review did not itself immediately reduce her pay, Hayes alleged that raises, bonuses, and promotions depended on positive reviews and that a prior positive review had led to a $3,000 raise. The court concluded that the negative review plausibly reduced her opportunity to receive a similar raise or bonus.

The court also found a minimal inference of discriminatory intent. Hayes alleged that Winkelmann made race-related remarks, denied her paid-time-off requests, and participated in the negative performance review. Hayes also alleged that non-African American employees received more favorable treatment regarding paid time off. The court determined that these allegations, considered together, were enough at the pleading stage.

The court separately held that the repeated denial of paid time off could qualify as an adverse employment action because paid time off could be an employment benefit or condition. It treated the alleged false accusation of expense-report fraud and the assignment of menial tasks as relevant background, although it did not need to decide whether each of those actions independently qualified as an adverse action.

The court did not find that Hayes plausibly pleaded a failure-to-promote claim based on Lisa Moore’s promotion. Hayes alleged that she expressed interest in a Facilities Manager position in Washington, D.C., but did not allege that she applied for the East Region position that Moore received. She also did not allege facts connecting Winkelmann to the promotion decision or otherwise creating an inference that the promotion was discriminatory.

Retaliation Claim

The court also held that Hayes plausibly alleged retaliation. Protected activity includes opposing discrimination through complaints to an employer or an administrative agency. The court found that all six activities Hayes identified—including complaints to managers, the Equal Employment Opportunity Commission filing, the agency mediation, and her later complaint about retaliation—were adequately alleged as protected activity at this stage. Newmark did not dispute that it knew about Hayes’s complaints.

For retaliation, an adverse action is one that could materially discourage a reasonable employee from making or supporting a discrimination complaint. The court found that a negative performance review could meet that standard. It also considered the alleged post-mediation conduct together, including withholding work information, assigning menial tasks, refusing meetings, increasing scrutiny, restricting Hayes’s communications, and threatening her with termination. Viewed as a group, those actions could plausibly discourage a reasonable employee from complaining.

The court rejected Hayes’s assertion that the December 7, 2021 performance review retaliated against her for filing the Equal Employment Opportunity Commission charge because the charge was filed on December 30, 2021, after the review. The court nevertheless found sufficient causation for the other alleged retaliatory actions because they occurred within weeks or months of the February 2022 mediation and included a threat that Hayes would be fired for communicating with people other than Winkelmann.

The court did not decide whether Hayes’s resignation legally amounted to a constructive discharge. It stated that the other alleged retaliatory conduct was sufficient to plead a materially adverse action without resolving that issue.

Disposition

The court denied Newmark’s motion to dismiss. The discrimination and retaliation claims therefore survived the pleading stage, while the court found that Hayes’s failure-to-promote theory was not plausibly alleged. The ruling did not determine whether Hayes will ultimately prove discrimination, retaliation, or constructive discharge.

Judge

The opinion was issued by Edgardo Ramos, United States District Judge.