Gordon v. The City of New York et al
MEMORANDUM AND ORDER granting in part 88 Motion for Leave to File Document. For the foregoing reasons, the plaintiff's motion to amend his complaint (Docket no. 88) is granted in part. It is denied to the extent that the plaintiff seeks t o state a claim for breach of contract based on the City's failure to pay him for unused leave time. Within five days of the date of this order, the plaintiff shall file the Second Amended Complaint. Discovery targeted exclusively at the newly -asserted claims shall be completed by April 28, 2017. The deadline for submitting the pretrial order or any dispositive motion is extended to May 31, 2017. SO ORDERED. (Signed by Magistrate Judge James C. Francis on 3/7/2017) Copies Transmitted this Date By Chambers. (anc)
an Assistant Corporation Counsel in the Law Department since 2004.
([Proposed] Second Amended Complaint (“Proposed SAC”), attached as
Exh. 1 to Declaration of Samuel O. Maduegbuna dated Jan. 12, 2017
(“Maduegbuna Decl.”), ¶ 32).
He filed his original complaint in
2014, which, like the currently-operative complaint, alleged claims
for disparate treatment and disparate impact under federal, state,
and city law.1
Gordon, 2016 WL 4618969, at *2-3.
In May 2016, Mr. Gordon fractured his hand while suffering an
anxiety attack allegedly brought on by the defendants’ illegal
(Proposed SAC, ¶ 193).
paid sick leave.
He consequently went on
(Proposed SAC, ¶ 197).
At that time, he had
accrued nearly 400 hours of leave time, which, according to his
calculations, would allow him to remain on sick leave until the
beginning of August 2016.
(Proposed SAC, ¶ 198).
telephoned Mr. Gordon to discuss his leave. (Proposed SAC, ¶ 203).
The supervisor was unsure whether the leave “should be considered
a ‘leave of absence’ that was indefinite or FMLA leave limited to
12 weeks,” and said that he would “get back to” Mr. Gordon later
that day (Proposed SAC, ¶ 203), presumably after he had researched
Department human resources professional to inquire about how to
facilitate FMLA leave.
(Proposed SAC, ¶ 204).
Mr. Gordon filled
The Honorable J. Paul Oetken, U.S.D.J., dismissed the
disparate impact claims alleged in the original complaint. Gordon,
2015 WL 3473500, at *11. I later granted Mr. Gordon’s motion to
amend his complaint to allege modified disparate impact claims.
Gordon, 2016 WL 4618969, at *3, 8.
out the forms provided and emailed them back to the Law Department
on June 30, 2016.
from his employer.
(Proposed SAC, ¶ 205).
He received no response
(Proposed SAC, ¶ 206).
Without informing Mr. Gordon, the City cancelled his health
insurance benefits as of July 24, 2016.
(Proposed SAC. ¶ 208).
few days later, Mr. Gordon asked one of his supervisors whether his
FMLA leave had been approved and could be used to extend his leave
past his original return date of August 1, 2016.
(Proposed SAC, ¶
209). The supervisor “responded that he would provide an answer by
the end of the week and advised [Mr. Gordon] that if [he] were out
of annual leave and vacation time his leave would be uncompensated
and that his employment[-]related benefits may also be impacted.”
(Proposed SAC, ¶ 210).
On August 5, 2016, Mr. Gordon received a
letter informing him that his insurance benefits ended on July 24,
2016, but that he was “eligible for COBRA.”2
(Proposed SAC, ¶
Mr. Gordon resigned five days later.3
(Proposed SAC, ¶
Mr. Gordon alleges that, by this conduct, the City “interfered
application . . . , failing to notify him whether his sick leave
“COBRA” is the acronym for the Consolidated Omnibus Budget
Reconciliation Act of 1985, which provided for “continuation
coverage” for “qualified beneficiar[ies]” of a group health plan
who would otherwise lose coverage. 29 U.S.C. § 1161(a).
There is a discrepancy in the Proposed Second Amended
Complaint regarding the date that Mr. Gordon resigned. At least
thrice, it asserts that he resigned on August 10, 2016. (Proposed
SAC, ¶¶ 13, 32, 213).
At least once, it asserts the date was
August 14, 2016. (Proposed SAC, ¶ 308). However, the precise date
is not relevant to the motion before me.
would be designated as FMLA-qualified leave, and cancelling his
family health insurance benefits.”
(Proposed SAC, ¶ 294).
further charges the City with retaliating against him for his
“attempted exercise of his FMLA rights” by cancelling his insurance
“about 24 days after he sought FMLA leave.” (Proposed SAC, ¶ 302).
Finally, Mr. Gordon asserts that he entered into a contract with
the City “based on [the City’s] publicized policy that designated
the rate by which employees of the Law Department would accrue sick
leave time and vacation time.”
(Proposed SAC, ¶ 306).
allegedly breached this agreement “by denying [Mr. Gordon] the full
use of his accrued leave time and failing to pay [him] for his
earned leave time after he resigned from the Law Department.”
(Proposed SAC, ¶ 308).
Rule 15 of the Federal Rules of Civil Procedure provides that
courts should “freely give” leave to amend “when justice so
Fed. R. Civ. P. 15(a)(2); see also Foman v. Davis, 371
U.S. 178, 182 (1962); Aetna Casualty & Surety Co. v. Aniero
Concrete Co., 404 F.3d 566, 603 (2d Cir. 2005).
preference for resolving disputes on the merits.’”
Citigroup Inc., 659 F.3d 208, 212–13 (2d Cir. 2011) (quoting New
York v. Green, 420 F.3d 99, 104 (2d Cir. 2005)).
The court has broad discretion over motions to amend, see
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir.
2007), and may deny such a motion for the following reasons: (1)
undue prejudice to the non-moving party, (2) futility, (3) bad
faith or dilatory motive, (4) repeated failure to cure deficiencies
by previous amendments, or (5) undue delay, United States ex rel.
Ladas v. Exelis, Inc., 824 F.3d 16, 28 (2d Cir. 2016); Burch v.
Pioneer Credit Recovery, Inc., 551 F.3d 122, 126 (2d Cir. 2008).
Here, the defendants argue solely that certain claims that the
plaintiff seeks to allege are futile, an issue which they have the
burden of demonstrating, see Allison v. Clos-ette Too, L.L.C., No.
14 Civ. 1618, 2015 WL 136102, at *2 (S.D.N.Y. Jan. 9, 2015);
Ferring B.V. v. Allergan, Inc., 4 F. Supp. 3d 612, 618 (S.D.N.Y.
FMLA Interference and Retaliation
interference and retaliation pursuant to the FMLA are futile to the
Plaintiff’s Motion for Leave to File and Serve a Second Amended
Complaint (“Def. Memo.”) at 2). Mr. Gordon disavows any attempt to
allege these claims against the individual defendants; rather, he
asserts that “the proposed interference and retaliation claims
under the FMLA . . . are  brought [only] against the City of New
(Reply Memorandum of Law in Support of Plaintiff’s Motion
for Leave to File and Serve a Second Amended Complaint (“Reply”) at
1; Proposed SAC, ¶¶ 289-304).4
Mr. Gordon may therefore amend his
complaint to allege these claims.
Additional Allegations Regarding Retaliation
Although the bulk of Mr. Gordon’s proposed allegations of
retaliation appear to focus on retribution for his exercise of FMLA
rights, he also states that the “City  retaliated against [him]
for filing the instant lawsuit by refusing to approve his FMLA
leave and unjustifiably cancelling his family health benefits when
he was out on sick leave without warning.”5
(Proposed SAC, ¶ 214).
The defendants object that Mr. Gordon has not plausibly alleged a
connection “between the filing of this lawsuit in 2014 and the
allegation that [his] health benefits were cancelled more than two
(Def. Memo. at 4).
Mr. Gordon argues that he is not attempting to add a new cause
of action for retaliation, but is merely adding one more event in
the defendants’ retaliatory course of conduct.
(Reply at 2).
further offers a plausible motivation for the City’s more recent
action: his motion to amend his complaint to assert disparate
impact claims in May 2016.
(Reply at 2).
In these circumstances,
the defendants have not established that amendment would be futile.
Breach of Contract
“Under New York law, the elements of a cause of action for
In a similar vein, Mr. Gordon asserts that he “is not
asserting a constructive discharge claim.” (Reply at 6).
I interpret this to mean that the benefits were cancelled
without warning, and not that Mr. Gordon took sick leave without
breach of contract are (1) the existence of a contract; (2)
performance of the contract by one party; (3) breach by the other
party; and (4) damages suffered as a result of the breach.”
Transcience Corp. v. Big Time Toys, LLC, 50 F. Supp. 3d 441, 450
(S.D.N.Y. 2014) (footnote omitted). In his proposed complaint, Mr.
designated the rate by which employees of the Law Department would
accrue sick leave and vacation time” created a contract between the
City and Law Department employees (Proposed SAC, ¶ 306); (2) he was
a Law Department employee and accrued sick leave and vacation time
pursuant to that policy (Proposed SAC, ¶ 307); (3) the City failed
to allow him to use the full measure of his accrued leave time
(Proposed SAC, ¶ 308); and (4) because he was unable to use his
full leave time, his health insurance benefits were cancelled,
resulting in out-of-pocket medical expenses of $10,000 or more
(Proposed SAC, ¶¶ 309-310).
The City first asserts that Mr. Gordon’s “employment as an
Assistant Corporation Counsel was not undertaken pursuant to a
contract,” but rather “pursuant to the [New York] Civil Service
(Def. Memo. at 5).
The argument is so succinct as to be
The City points to a New York Court of Appeals opinion
indicating that Assistant Corporation Counsel are members of the
civil service, see In re Grossman, 43 N.Y.2d 493, 402 N.Y.S.2d 373
(1977), and the provision of the New York City Charter that allows
Charter, § 392.
(Def. Memo. at 5).
It then quotes Leon v. New
service employment . . . [is] governed by statute, not contract,
. . . there can be no cause of action for breach of contract.’”
(Def. Memo. at 5 (alterations in original) (quoting Leon, 240
A.D.2d at 186, 658 N.Y.S.2d at 283)).
suggests that Leon
To the extent that the City
stands for the proposition that a public
employee cannot state a claim for breach of contract regarding
conditions of employment, it is incorrect.
Rather, the opinion
appears to recognize that if the employee had established the
existence of a contract, he would be able to sue on it.
240 A.D.2d at 186, 658 N.Y.S.2d at 283 (noting that “no contract
exists between [the] plaintiff and the [City agency] that required
the [City agency] to file plaintiff’s pension membership with [the
defendant],” and that therefore “there can be no cause of action
for breach of contract”); see also Whiting v. Incorporated Village
of Old Brookville, 182 F.R.D. 14, 16 (E.D.N.Y. 1998) (dismissing
provisions of N.Y. Civil Service Law and Village Law).
The question then becomes whether Mr. Gordon has alleged the
existence of a contract created by the Law Department’s “publicized
policy” regarding accrual of leave time.
(Proposed SAC, ¶ 306).
The City contends that Mr. Gordon’s allegations do not plausibly
allege a contract because the New York Court of Appeals has warned
that “[r]outinely issued employee manuals, handbooks, and policy
statements should not lightly be converted into binding employee
(Def. Memo. at 5 (quoting Lobosco v. New York
Telephone Co., 96 N.Y.2d 312, 317, 727 N.Y.S.2d 383, 386 (2001)).
employer’s practices with respect to the employment relationship
. . . may become a part of the employment contract” where the
conduct at issue, the employer made the employee aware of the
policy, and the employee detrimentally relied on the policy. Baron
v. Port Authority of New York and New Jersey, 271 F.3d 81, 85 (2d
Cir. 2001); accord Catapano-Fox v. City of New York, No. 14 Civ.
8036, 2015 WL 3630725, at *7 (S.D.N.Y. June 11, 2015); Berman v.
Neo@Ogilvy LLC, No 14 Civ. 523, 2014 WL 6865718, at *13 (S.D.N.Y.
Aug. 15, 2014), report and recommendation adopted in relevant part,
72 F. Supp. 3d 404 (2014).
Mr. Gordon’s proposed complaint
adequately alleges each of those elements.
(Proposed SAC, ¶¶ 198,
203-206, 209-211, 306-308).
To be sure, such causes of action are often dismissed because
the purported contract itself contradicts the claim.
Baron, 271 F.3d at 85-86 (holding implied contract claim fails
because writings identified by plaintiff “specifically disavow any
intent on the [employer’s] part to accept contractual limitations
on its rights as an at-will employer”); Catapano-Fox, 2015 WL
3630725, at *7 (“[N]othing in either handbook . . . purports to
limit the [employer’s] ability to terminate an employee at will.”);
Neo@Ogilvy, 2014 WL 6865718, at *13 (finding no implied contract
where handbook contained disclaimer “plainly articulat[ing] [its]
N.Y.S.2d at 386. Here, however, the plaintiff does not have access
to a copy of the writing (Declaration of Robert W. Gordon dated
Jan. 9, 2017, attached as Exh. 2 to Maduegbuna Decl., ¶ 5), and the
City has not submitted evidence of such disclaimers in the policy,
as was their right, see, e.g., Cortec Indusustries, Inc. v. Sum
Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991) (“[W]hen a plaintiff
chooses not to attach to the complaint or incorporate by reference
a [document] upon which it solely relies and which is integral to
the complaint, the defendant may produce the [document] when
attacking the complaint for its failure to state a claim.”).
Mr. Gordon’s proposed complaint sufficiently alleges the existence
of an agreement, I cannot deny the motion to amend as futile on the
basis of a document that is not before me.
The City then contends that Mr. Gordon is not entitled to
“recover the monetary value of unused vacation and sick time in the
absence of statutory or contractual authority.”
(Def. Memo. at 6
(quoting Grishman v. City of New York, 183 A.D.2d 464, 465, 583
N.Y.S.2d 425, 426 (1st Dep’t 1992)).
(Reply at 5).
Mr. Gordon replies by
But that argument is frivolous in
light of the fact that Mr. Gordon nowhere alleges any basis for the
recovery of the value of his unused accrued leave time. The breach
of contract claim clearly focuses on the allegations that he was
not allowed to use the full measure of his accrued leave, and, if
he had been, “his health benefits would not have been cancelled.”
(Proposed SAC, ¶ 197-198, 201, 207, 306-309). Indeed, as he admits
in his papers, the proposed complaint seeks damages for his “out of
pocket medical expenses and other medical penalties.” (Reply at 4;
Proposed SAC, ¶ 310).
In the absence of any allegation that the
City was contractually obligated to pay for unused leave time, the
sole reference in the proposed complaint to the City’s failure to
do so (Proposed SAC, ¶ 308) does not make out a breach of contract
Finally, the City contends that “the gravamen of [Mr. Gordon’s
breach of contract] claim is that the City was somehow arbitrary
and capricious, in violation of lawful procedure or effected by an
error of law,” and therefore must be brought as an Article 78
proceeding pursuant to § 7803(3) of the New York Civil Practice Law
and Rules (“CPLR”).
(Def. Memo. at 6).
Because an Article 78
determination to be reviewed becomes final and binding,” CPLR §
217, the claim would now be time-barred.
(Def. Memo. at 6-7).
Although the City asserts that its premise that Mr. Gordon’s
contract claim is really fodder for an Article 78 proceeding is
“clear” (Def. Memo. at 6), it provides only this ipse dixit to
And authority establishes that it is mistaken.
e.g., Sims v. State of New York, 30 A.D.3d 949, 949-50, 818
determination regarding rate for insurance coverage and seeking
contract allegations’” (quoting In re Barrier Motor Fuels, Inc.,
256 A.D.2d 405, 405-06, 681 N.Y.S.2d 594, 595 (2d Dep’t 1998)); In
re Barrier Motor Fuels, 256 A.D.2d at 405-06, 681 N.Y.S.2d at 595
sustained arises from a breach of the contract by a public official
or governmental body, then the claim must be resolved through the
application of traditional rules of contract law.’
characterization of the behavior of a governmental agency as
‘arbitrary and capricious’ or ‘in violation of proper procedure,’
does not suffice to transform the controversy into one appropriate
for CPLR article 78 relief . . . .” (first alteration in original)
(internal citations omitted) (quoting Abiele Construction v. New
York City School Construction Authority, 91 N.Y.2d 1, 7-8, 666
N.Y.S.2d 970, 972 (1997))).
Here, Mr. Gordon asserts that he was
denied the right to use leave time he accrued pursuant to a
cancelled and he incurred out-of-pocket expenses.
sounds in contract. See Finley v. Giacobbe, 79 F.3d 1285, 1293 (2d
Cir. 1996) (denying civil service employee a benefit of employment
“during the period of employment  may  be viewed in terms of a
contract right”); cf. Gerber v. New York City Housing Authority, 42
N.Y.2d 162, 165, 397 N.Y.S.2d 608, 609 (1977) (claim for salary
earned but not paid while civil service employee suspended “may be
made by way of an action at law, and it is not necessary to
commence an article 78 proceeding”).
For the foregoing reasons, the plaintiff’s motion to amend his
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