Farah v. Emirates

Background

Kayenat Farah, Joseph Cammarata, Charlotte Armstrong, and Violet Simpson brought a proposed class action against Emirates and the Emirates Severance Plan. The plaintiffs alleged that they were former Emirates employees who were furloughed on April 15, 2020, and later permanently laid off. Three plaintiffs worked in Emirates’ New York City office, and one worked at its Nassau County call center. The complaint alleged that forty City Office employees and forty-two Call Center employees lost their jobs through furloughs and later terminations.

Each plaintiff submitted a claim for severance benefits through counsel and was denied payment. The plaintiffs alleged that Emirates maintained a written severance policy providing a lump-sum payment based on years of service and a three-month extension of employer-paid health-insurance contributions. They also alleged that Emirates had provided benefits to qualified employees terminated in earlier years, kept the plan documents from ordinary employees, and did not provide requested plan documents or review procedures.

The plaintiffs also alleged discrimination against American employees. They claimed that Emirates favored non-American workers, paid American workers less, provided some benefits to non-American workers but not American workers, and terminated American workers during the pandemic while not terminating or denying severance benefits to non-American workers in the United States. The opinion treated these factual allegations as true for purposes of deciding the dismissal motion.

Motions and Claims

Defendants moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to plausibly support legal relief. The motion challenged counts 1 through 10 of the amended complaint. Counts 11 through 13 asserted individual retaliation claims and were not challenged by this motion. Defendants separately moved under Rule 39(a)(2) to strike the jury demand.

Counts 1 through 3 asserted claims under the Employee Retirement Income Security Act (ERISA) for unpaid plan benefits, breach of fiduciary duties, and failure to provide plan information. The court applied the three-factor test used to determine whether a severance arrangement is an ERISA-governed employee welfare benefit plan: managerial discretion, an ongoing commitment to provide benefits, and individualized evaluation of employee eligibility. The court found that the allegations produced ambiguous results under each factor but could support an inference that the severance plan was governed by ERISA. The court therefore found that the plaintiffs adequately pleaded all three ERISA claims.

Counts 5 through 10 asserted intentional-discrimination and disparate-impact claims 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 held that the allegations of discriminatory comments, unequal pay and benefits, preferential treatment of non-American workers, and terminations affecting American workers were sufficient at the pleading stage to support intentional-discrimination claims for the City Office employees. The court also held that allegations identifying different wage scales and policies favoring non-American workers adequately pleaded disparate-impact claims. The court did not resolve whether Defendants actually maintained the alleged discriminatory policies.

Count 4 asserted a claim under New York’s Worker Adjustment and Retraining Notification Act (NY WARN). The court concluded that the alleged furloughs and terminations plausibly constituted mass layoffs: the alleged City Office reduction involved forty employees out of approximately sixty-five, and the alleged Call Center reduction involved forty-two of forty-three employees. The court also found that the complaint plausibly alleged that the notice was insufficient. It declined to resolve at this stage whether COVID-19 qualified for either of the asserted notice exceptions because those defenses were not established on the face of the complaint.

Jury Demand and Ruling

Defendants argued that Emirates was an agency or instrumentality of a foreign state under the Foreign Sovereign Immunities Act (FSIA), which generally provides for nonjury civil trials against foreign states. The court found that indirect ownership through the Investment Corporation of Dubai did not by itself establish that Emirates was an instrumentality of Dubai. The court also found that the record lacked enough information to determine whether Emirates was an “organ” of Dubai under the FSIA. Because Defendants had not established a preliminary showing of immunity, the court denied the motion to strike the jury demand without prejudice to renewal later.

The court denied Defendants’ motion to dismiss in its entirety. It denied the motion to strike the jury demand without prejudice to renewal. The court directed Defendants to answer the amended complaint by April 22, 2024, and referred the case to Magistrate Judge Netburn for general pretrial management. The order resolved docket entry no. 42.