Corradino v. Liquidnet Holdings, Inc.

Background

Mary Corradino, identified as an HR professional and former Liquidnet employee, sued Liquidnet Holdings Inc. and its CEO, Seth Merrin. She asserted eight claims under the Trafficking Victims Protection Act (TVPA), Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law (NYSHRL), and the New York City Human Rights Law (NYCHRL). The defendants moved to dismiss the Second Amended Complaint.

The complaint alleged that Merrin repeatedly propositioned Corradino for sex or a relationship between 2014 and 2019. It also described sexual comments and advances by other senior male Liquidnet employees and alleged that Liquidnet maintained a broader environment of sexual harassment. Corradino alleged that she complained through counsel in September 2019; that Liquidnet then announced a mandatory arbitration policy covering discrimination, harassment, and retaliation claims; and that Liquidnet effectively terminated her when she would not dismiss her lawsuit and agree to arbitration.

TVPA claims

The court granted the motion to dismiss Corradino’s TVPA claims. The TVPA provision at issue requires allegations involving a commercial sex act—sex in exchange for something of value—and the use of force, threats of force, fraud, coercion, or a combination of those means. The court stated that, even assuming the alleged harassment could qualify as a sex act, the complaint did not allege that the defendants proposed sex in exchange for career advancement or another thing of value. Corradino had continued to advance at Liquidnet despite refusing the alleged advances.

The court also held that the complaint did not allege that force, threats of serious harm, coercion, or a knowing material misrepresentation caused Corradino to engage in a commercial sex act. As to Liquidnet, the court gave an additional reason for dismissal: the complaint did not adequately allege that Liquidnet benefited from participating in sex trafficking. The court therefore granted the motion as to the TVPA claims.

Discrimination claims

The court denied the motion as to Corradino’s Title VII, NYSHRL, and NYCHRL discrimination claims. Under Title VII and the NYSHRL, the complaint plausibly alleged a hostile work environment, which requires workplace harassment sufficiently severe or pervasive to alter employment conditions and create an abusive environment. The court relied on the alleged repeated propositions by Merrin, his sexual comments and conduct, and the alleged conduct of other senior employees.

The court concluded that the allegations described more than a few isolated offensive comments and were sufficient at the pleading stage to allege that Liquidnet was permeated with discriminatory intimidation, ridicule, and insult. Because the claims survived under the more demanding federal and state standards, the court did not separately analyze the broader NYCHRL standard.

The court also rejected the defendants’ argument that the discrimination claims were untimely. It applied the continuing-violation doctrine, under which conduct outside a limitations period may be considered for a hostile-work-environment claim if at least one contributing act occurred within the applicable period. The complaint alleged an ongoing pattern of harassment, including incidents as late as April 2019, and the court held that the discrimination claims were timely at the pleading stage.

Retaliation claims

The court denied the motion as to Corradino’s Title VII, NYSHRL, and NYCHRL retaliation claims. It held that her complaints about sexual harassment plausibly alleged protected activity—opposition to unlawful employment conduct. The complaint also plausibly alleged adverse employment actions: Liquidnet adopted a mandatory arbitration policy shortly after Corradino retained counsel concerning her harassment complaints, required agreement to arbitration as a condition of continued employment, and effectively terminated her when she refused.

The court concluded that the timing and manner of the arbitration policy’s implementation were sufficient to plead an adverse employment action and a connection between Corradino’s complaints and Liquidnet’s actions.

Disposition and classification

The court granted the defendants’ motion to dismiss as to the TVPA claims but otherwise denied it. The clerk was directed to close the motion at Docket No. 32. Because this was a partial ruling on a motion to dismiss, the classification is procedural_order: the court decided whether the claims were adequately pleaded, rather than finally deciding liability on the underlying employment claims.