Nachmany v. FXCM, Inc.

Background

Alon Nachmany sued FXCM, Inc., and its employees Ryan Leonard and Seth Lyons. He alleged employment discrimination based on religion and national origin under Title VII, the New York State Human Rights Law, and the New York City Human Rights Law. He also alleged sexual harassment under those laws and civil assault and battery against Lyons.

Nachmany alleged that, while working as a systems engineer for FXCM between approximately 2012 and 2014, he was subjected to derogatory comments and offensive conduct. The alleged conduct included a profane message on an office whiteboard, a sexually explicit computer background, an offensive sexual drawing placed on a photograph of him, and crude language. He also alleged that Lyons grabbed his hand without consent during a struggle and broke his finger. Nachmany said he complained to FXCM personnel and was fired on September 2, 2014.

Nachmany filed a discrimination charge with the Equal Employment Opportunity Commission on March 15, 2015, and received a notice allowing him to sue on October 14, 2015. Defendants moved to dismiss the sexual-harassment claims, the Title VII claims against Leonard and Lyons, and the assault-and-battery claim. After the motion was filed, Nachmany withdrew the Title VII claims against Leonard and Lyons; the opinion states that the related causes of action were therefore moot.

Legal standards

The court applied Rule 12(b)(6), which allows dismissal when a complaint does not allege enough facts to make a claim legally plausible. The court generally accepted the complaint’s factual allegations as true and drew reasonable inferences for Nachmany, but it did not accept legal conclusions without supporting facts.

For Title VII claims, a plaintiff generally must first present the claim to the Equal Employment Opportunity Commission. A claim not expressly included in the charge may proceed if it is reasonably related to the claims presented—that is, if the complained-of conduct could reasonably be expected to fall within the agency’s investigation.

For a same-sex hostile-work-environment claim, the plaintiff must allege conduct that was objectively severe or pervasive, subjectively hostile or abusive, and caused by the plaintiff’s sex. The court explained that the New York State claims are analyzed in the same way as Title VII claims for this issue. The New York City law is broader concerning the severity of the conduct, but the plaintiff still must allege that the conduct was motivated by sex.

Rulings

Title VII exhaustion. The court rejected Defendants’ argument that Nachmany failed to exhaust his Title VII sexual-harassment claim. Although the charge did not use a separate sexual-harassment label, the court held that the factual allegations in the charge were sufficiently related to the sexual-harassment allegations in the complaint. The court also declined to rely on Defendants’ speculation about what the agency might have investigated.

Sexual-harassment claims. The court dismissed the remaining sexual-harassment claims because the complaint did not allege facts showing that the conduct occurred because Nachmany was male. The complaint alleged sexual content and offensive behavior, but it did not allege the sexual orientation of the alleged harassers, facts showing general hostility toward men, or comparative facts about how men and women were treated at FXCM. The court declined to consider comparative allegations made only in Nachmany’s opposition brief because a party cannot amend a complaint through briefing.

Civil assault and battery. The court dismissed Count 28 because Nachmany did not dispute that the claim was filed outside New York’s one-year statute of limitations. The court also held that filing an Equal Employment Opportunity Commission charge did not pause that limitations period and that the assault-and-battery and employment claims did not arise from a common nucleus of facts.

Title VII claims against Leonard and Lyons. The court found amendment futile as to Nachmany’s Title VII claims against Leonard and Lyons. The opinion’s footnote states that Nachmany withdrew those claims after Defendants filed their motion, and the court states that the related causes of action were moot.

Motion to strike. The court granted Defendants’ motion to strike allegations and exhibits concerning the sexual-harassment claims. It stated that the material was related to dismissed allegations and was not relevant to the remaining claims. The court specified that the material was stricken without prejudice to repleading if Nachmany amended his sexual-harassment claims, and it listed the affected complaint paragraphs and exhibit portions.

Leave to amend and disposition. The court found amendment futile for the Title VII claims against Leonard and Lyons and for the civil assault-and-battery claim against Lyons. Applying the generally permissive standard for amendment, it allowed Nachmany to file an amended complaint concerning the remaining sexual-harassment claims within 30 days.

The conclusion states that the motion to dismiss was GRANTED as to Counts 10, 11, 12, 18, 19, 20, 21, and 28 with prejudice, and GRANTED as to Counts 3, 6, 9, 15, 18, 24, and 27 without prejudice to amending the Complaint. Count 18 appears in both categories in the opinion’s conclusion, creating an apparent inconsistency. The motion to strike was also GRANTED.