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September 4, 1996

JOHN WOLFF, Plaintiff, against CITY OF NEW YORK FINANCIAL SERVICES AGENCY (FISA), MARK PAGE, JOSEPH TRAPANI, and WILLIAM MULLERN, in their individual capacities and in their capacities as Directors of FISA, and JOSEPH A. MESSINA in his individual capacity and in his capacity as Executive Director of FISA, and MARILYN BLAUFARB, Defendants.

The opinion of the court was delivered by: MOTLEY

 Plaintiff John Wolff, an observant Jew, charges the City of New York Financial Services Agency ("FISA") and its three board members and executive director, respectively, Mark Page, Joseph Trapani, William Mullen and Joseph A. Messina (collectively, the "City defendants") with violating section 706 of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. sec. 2000e-5 ("Title VII"). Plaintiff also charges defendant Marilyn Blaufarb ("Blaufarb"), formerly employed by FISA, with intentional infliction of emotional distress under New York law.

 Plaintiff alleges that while he was employed as FISA's general counsel, Blaufarb had wrongfully charged him with sexual harassment in retaliation for plaintiff's unfavorable reviews of her job performance and opposition to her requested job transfer. Plaintiff further alleges that City defendants, in their investigation of these charges, had subjected him to discriminatory treatment, unfair punishment, and eventually terminated his employment, because he is an observant Jewish male. Plaintiff claims that City defendants and their female investigators had concluded that the harassment charges were meritorious due to their bias against him.

 Plaintiff seeks $ 10,000,000 in damages for intentional infliction of emotional distress from Blaufarb. He also seeks $ 10,000,000, reinstatement, back-pay and lost benefits from FISA and a judgment declaring that FISA engaged in discriminatory treatment. Finally, plaintiff seeks $ 10,000,000 in punitive damages from each individual City defendant.

 Blaufarb moves to dismiss plaintiff's claim for intentional infliction of emotional distress, arguing that this claim is barred by the statute of limitations in New York. She also counterclaims against plaintiff, incorporating the allegations contained in her verified complaint currently pending before the Commission of Human Rights of the City of New York and cross-claims against City defendants for their "tortious" conduct. City defendants, who are separately represented, move to dismiss plaintiff's complaint on the ground that plaintiff is collaterally estopped by his prior litigation against them in state court. City defendants also request costs and attorneys' fees.

 I. Background

 FISA is a New York City agency that runs the data processing operations for the City's personnel and units coordinating and reporting on New York City's financial information. It is headed by an executive director and a three member board, all of whom are appointed by the Mayor and Comptroller of the City of New York.

 Marilyn Blaufarb began working for FISA in June of 1984 and eventually became a principal administrative associate in its technical applications unit. In November of 1987, plaintiff became FISA's General Counsel, primarily serving as a legal advisor to the executive director. At first, Blaufarb and plaintiff did not work together.

 Around June of 1991, plaintiff had Blaufarb temporarily assigned to work for him. It was her understanding that this assignment, which she neither requested nor wanted, would end when certain temporary projects had been completed. However, plaintiff used his authority as Blaufarb's supervisor to have her continue to work for him following the termination of these projects. Blaufarb grew increasingly dissatisfied with this situation and made efforts to return to the technical applications unit. Plaintiff, on the other hand, was intent that Blaufarb remain in his department and even intervened to prevent her from leaving. Plaintiff also claimed to be unhappy with Blaufarb's performance.

 On July 27, 1992, Blaufarb filed a grievance protesting that her transfer to plaintiff's department was being made permanent without her consent. In this grievance, Blaufarb stated that: "Mr. Wolff had periods of what can only be described as tyrannical, intimidating and abusive behavior." See Exh. D, Complaint, filed July 27, 1992 ("Complaint"). However, the processing of her transfer was too far along and her grievance went unremedied.

 Shortly thereafter, on August 13, 1992, Blaufarb filed an internal complaint against plaintiff alleging that he had sexually harassed her in the workplace. See Exh. C, Complaint. She claimed that he had touched himself, discussed his sexual prowess, expressed his attraction to her, inquired about her private life and attempted to touch her. See id. Plaintiff, in response, claimed that her complaint was vengeful and retaliatory.

 FISA then undertook to investigate Blaufarb's sexual harassment charges against plaintiff. An Equal Employment Opportunity ("EEO") Officer at the Office of the Comptroller and the Assistant Counsel at the Office of the Comptroller (both women) assisted. The investigation consisted of interviewing eight employees including individuals who had worked with Blaufarb and plaintiff and witnesses identified by them. Plaintiff and Blaufarb were also interviewed.

 Plaintiff was given an opportunity to participate in the investigation and submitted extensive documentation. Apparently, three women who were interviewed in the course of the investigation reported similar incidents involving plaintiff, with details mirroring Blaufarb's account of plaintiff's sexual harassment. The EEO Officer then concluded that sexual harassment had occurred and recommended that plaintiff be suspended and given "sensitivity training" concerning sexual harassment in the workplace.

 On April 22, 1993, Blaufarb made a formal complaint of discrimination and on May 18, 1993, she filed a complaint against FISA and plaintiff with the New York City Commission on Human Rights. This complaint essentially reiterates the details included in the first internal complaint against plaintiff, i.e., it alleges that plaintiff touched himself, spoke inappropriately about sexuality and tried to touch Blaufarb. See Exh. E, Complaint. Blaufarb also charged respondents with violating the Administrative Code of the City of New York and Title VII.

 Following the denial of his appeal, plaintiff was repeatedly notified of the dates these sexual harassment seminars were held. He was also repeatedly and explicitly warned in writing that his participation was a prerequisite to his continued employment. Nonetheless, plaintiff refused to attend the seminars. Plaintiff was finally terminated on November 30, 1994 for insubordination, i.e., for failing to attend the mandatory seminars. He now claims that these seminars "constituted punishment for something he did not do and that his participation in such a seminar as it was designed would be repugnant to his religious beliefs and practices [as an Orthodox Jew]," see Complaint, par. 13; that is, he contends that open discussion of sexual harassment violates his religion's emphasis on ...

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