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August 15, 2018

Determining the economic damage suffered by a victim of unlawful discrimination


Determining the economic damage suffered by a victim of unlawful discrimination
Rensselaer County Sheriff's Dept. v New York State Div. of Human Rights, 2018 NY Slip Op 05719, Appellate Division, Third Department

The Appellate Division reviewed a determination of the Commissioner of Human Rights' award of damages to compensate Lora Abbott Seabury for the pension benefits that she lost due to the Rensselaer County Sheriff's Department [Respondent] discriminatory actions.*

Lora Abbott Seabury, a former correction officer employed by Respondent filed a complaint with State Division of Human Rights [SDHR] alleging that she had been subjected to, among other things, sexual harassment by male coworkers. After holding a hearing, a SDHR Administrative Law Judge [ALJ] found that Seabury proved that she had been sexually harassed by her male coworkers and recommended that Petitioner be ordered to pay Seabury nearly $450,000 in economic damages and $300,000 in noneconomic damages. The ALJ also recommended that Seabury "should be made whole with regard to her pension."

The Commissioner of Human Rights adjusted the amount of economic damages to approximately $315,000, but otherwise adopted the ALJ's recommendations and, in addition, included an order directing Seabury "to involve" the Office of the State Comptroller and the New York State and Local Retirement System, "presumably [said the court] to have them provide an actual pension to Seabury based on 25 years of service."

The Appellate Division confirmed the determination that Seabury had been subjected to sexual harassment and then remitted the matter to SDHR for the limited purpose of determining the amount of damages that Seabury sustained due to diminishment of her pension benefits, specifically noting that, for the purposes of such a calculation, [1] Seabury's testimony that she planned to work for 25 years was credited, [2] Seabury provided the relevant portions of her collective bargaining agreement and [3] Seabury provided evidence of her wages for the final three full years of her employment, which allows for the computation of her final average salary.**

On remittal, SDHR requested that Petitioner submit documentation demonstrating the monetary award necessary to compensate Seabury for diminution of her pension.

Contending that Seabury was not entitled to any such damages based on the possibility that she would receive disability benefits in an amount greater than the pension that she would have been eligible to receive upon completing 25 years of service, Petitioner submitted a written report from an economist who estimated the total pension benefits that Seabury would have received based on her years of actual service and after 25 years of service. Seabury submitted documentation in rebuttal to Petitioner's submissions, including a written report from an economist who also estimated Seabury's lost pension benefits.

Ultimately the Commissioner ordered Petitioner to pay Seabury $809,507.97 to compensate her for the reduction in her pension that resulted from Petitioner's discriminatory actions.

Petitioner appealed the Commissioner's determination contending that SDHR's calculation of the damages award was both procedurally improper and incorrect while Seabury contended that the damages awarded by the Commissioner did not fully compensate her for the reduction in her pension.

Seabury then requested that Supreme Court either dismiss the petition or transfer the proceeding to the Appellate Division, whereupon Supreme Court transferred the matter to the Appellate Division, resulting in this proceeding.

Explaining that it had remitted explicitly for the limited purpose of requiring SDHR to determine such damages because it had never made an initial determination of such damages, the Appellate Division rejected the Petitioner's claim that SDHR violated the applicable rules of procedure when it afforded both parties the opportunity to make additional submissions on remittal because SDHR was authorized to reopen the record of the proceeding.

The Appellate Division also rejected Petitioner's contention that SDHR erred by failing to reduce the damages awarded for loss of pension benefits to present value. The Court said that although the question of whether the Human Rights Law requires that awards for future damages be discounted to present value is an issue of first impression in the appellate courts of New York, citing Matter of Aurecchione v New York State Div. of Human Rights, 98 NY2d 21, it noted that the Court of Appeals had observed that federal case law is instructive in the employment discrimination context.

Acknowledging that the award for Seabury's lost pension benefits can only be a "rough approximation" of the amount necessary to restore her to the position that she would have occupied had she not been the victim of sexual harassment because neither her lost income stream nor the effect of future price inflation can be predicted with complete confidence, the Appellate Division opined that "One permissible method for approximating damages that arises from a loss of future income - known as the "total offset" method - is to neither consider future salary increases nor discount the damages to present value based on the presumption that future salary increases are offset by the discount rate used to calculate the present value of a damages award."

Thus, said the court, SDHR did not err by adopting the total offset method to determine the value of Seabury's lost pension benefits and confirmed its determination.

* See Executive Law §298.


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