New York Court of Appeals establishes lowered threshold for punitive damages under NYCHRL

The New York Court of Appeals—the highest state court in New York—expanded the basis on which punitive damages may be awarded under the New York City Human Rights Law (NYCHRL) to include instances where there is “willful or wanton negligence” or where this a “conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.”

This ruling differs from Title VII of the Civil Rights Act of 1964, which only allows for punitive damages in instances where a plaintiff can show that a respondent engaged in discrimination “with malice or reckless indifference.”

Thus, the lowered standard established by the court does not require evidence of malice or awareness of the violation of a protected right.

Because the NYCHRL encompasses the Fair Chance Act governing background checks, this new standard will apply to violations of the Fair Chance Act, which has several provision that impact employers, including “Ban the Box” (with a requirement that employers delay asking applicants for authorization to obtain a background check until after a conditional offer of employment is made) as well as additional pre-adverse requirements that go beyond the FCRA.

The decision serves as a reminder for employers in New York City to consider their employment policies and practices to avoid instances that may violate the NYCHRL.

Source: Seyfarth Shaw LLP

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