Kraiem v. JonesTrading Institutional Services LLC

Background

Nefissa Kraiem sued JonesTrading Institutional Services LLC, JonesTrading International Limited, and several individuals, alleging sex- and gender-based discrimination and retaliation under Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, and the New York City Human Rights Law.

The court had previously dismissed several claims and defendants and had given Kraiem limited permission to amend her First Amended Complaint to correct identified pleading problems. Kraiem filed a proposed Second Amended Complaint and then moved for permission to amend. The proposed amendments added allegations about conduct before and after her 2017 New York business trip, individual defendants’ involvement in the alleged discrimination, and retaliatory acts.

Rule for Amendment

Under Federal Rule of Civil Procedure 15, courts generally should allow an amended complaint when fairness requires. A court may deny permission if the proposed amendment would be futile, meaning it would still fail to fix the earlier problems or state a legally sufficient claim.

The court accepted the proposed complaint’s factual allegations as true for purposes of deciding the amendment motion. It also considered the proposed complaint in its entirety because discovery had not begun, no new parties or causes of action were added, and the court found no indication of bad faith or undue prejudice.

Aiding-and-Abetting Claims

The court held that Kraiem adequately pleaded an aiding-and-abetting theory against Mazzullo under the New York State Human Rights Law and the New York City Human Rights Law. An aiding-and-abetting claim alleges that a person helped or participated in another discriminatory violation.

The proposed complaint alleged that, during a Dallas trip, Mazzullo hugged Kraiem, grabbed her waist, repeatedly asked to return to her hotel room, made derogatory remarks toward her and about her to others, and later told Jones employees that Kraiem was “not his type.” The court concluded that these allegations sufficiently described Mazzullo’s participation in the alleged hostile work environment at the pleading stage. The court noted that it was unclear whether Mazzullo was a JonesTrading International Limited employee and stated that, if he was, he might invoke a forum-selection clause.

The court found the proposed aiding-and-abetting allegations against Hill and Chmielewski insufficient. The allegations that they merely observed some of Mazzullo’s conduct and failed to act were conclusory and did not adequately explain how or when they learned of the conduct or whether their inaction was part of an ongoing discriminatory policy or practice. The court also found that the proposed allegations did not adequately connect their conduct to an impact on Kraiem in New York City.

Direct Individual Liability

The court denied the proposed amendments seeking to hold Hill, Mazzullo, and Chmielewski directly liable as employers under the New York State Human Rights Law or the New York City Human Rights Law. The proposed complaint did not provide particular facts showing that these individuals owned Jones or had the power to make personnel decisions themselves.

The court also found insufficient the allegations that the individuals had authority to hire and fire employees, supervise work conditions, determine pay, or maintain employment records. Those allegations generally repeated the legal standards without supplying supporting facts. In addition, the court concluded that the proposed complaint did not adequately allege that these individuals personally engaged in conduct having an impact in New York City.

Retaliation Claims Against JTIL and Cunningham

The court denied the proposed amendments asserting retaliation claims against JonesTrading International Limited and Cunningham. The proposed allegations concerned events in London, but the court had previously ruled that Kraiem’s Title VII claims based on those events were deficient because she was not employed in the United States within the meaning of Title VII. The proposed amendments did not allege facts satisfying the applicable tests for employment in the United States.

The court also found that the proposed allegations against Cunningham did not adequately show an impact in New York. Because the proposed amendments did not cure the pleading deficiencies, the court did not decide whether JTIL or Cunningham could invoke the forum-selection clause for conduct after Kraiem’s termination.

Ruling

Judge Andrew L. Carter, Jr. granted in part and denied in part Kraiem’s motion for leave to amend her First Amended Complaint. The court granted the motion as to Kraiem’s proposed aiding-and-abetting allegations against Mazzullo and denied it as to all other allegations. The Clerk was directed to terminate Hill, Chmielewski, JTIL, and Cunningham from the case.