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Kaitlin Krause v. Merrill Lynch

April 13, 2011



I. Background

On January 27, 2010, Kaitlin Krause ("Krause" or "Plaintiff") commenced this action against Merrill Lynch, Pierce, Fenner, & Smith, Inc., Merrill Lynch & Co., and Bank of America Corporation (collectively, "Merrill" or "Defendants"), pursuant to Title VII of the Civil Rights Act, 42 U.S.C. § 2000(e), et seq., Article 15 of the New York State Executive Law, Section 13 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 213, and New York Labor Law, 12 N.Y.C.R.R. § 138-2 et seq. Plaintiff alleges that Merrill (1) "subject[ed] her to a sexually hostile work environment," including an alleged sexual assault by a co-worker; (2) improperly classified her as an exempt employee; and (3) intentionally and negligently caused her emotional distress. (Compl., dated Jan. 27, 2010, ¶¶ 1, 44, 54--55.)

On December 21, 2010, Merrill filed a motion for summary judgment, arguing, among other things, that (1) Plaintiff's hostile work environment claim fails as a matter of law because liability cannot be imputed to Merrill for "a purported off-duty, after-hours sexual assault by [Plaintiff's] co-worker," and the other "alleged sporadic conduct by her co-workers, the bulk of which is gender-neutral," is not actionable under Title VII; (2) Plaintiff was properly classified as administratively exempt because "she performed work critical to [Merrill's] financial services business and to the business of its clients"; and (3) Plaintiff cannot show "that Merrill intended to cause [emotional distress], or that it was reckless with respect to the causation of such conduct." (Mem. of Law in Supp. of Defs.' Mot. for Summ. J., dated Dec. 12, 2010 ("Defs. Mem."), at 1--2.)

On January 28, 2011, Plaintiff filed an opposition, arguing, among other things, that (1) Plaintiff was assaulted by a director at Merrill who "relied on his authority to accomplish the assault," and Plaintiff was subjected to separate incidents of "vulgar and sexually suggestive and inappropriate comments . . . by male supervisors"; and (2) Plaintiff's "position, title and duties did not carry with them [any] discretion and independent judgment." (Mem. of Law in Opp'n to Defs.' Mot. for Summ. J., dated Jan. 28, 2011 ("Pl. Mem."), at 5, 7--9.) Plaintiff fails to respond to Merrill's argument regarding alleged infliction of emotional distress.

On February 17, 2011, Merrill filed a reply. (See Reply Mem. of Law in Further Supp. of Defs.' Mot. for Summ. J., dated Feb. 17, 2011.) The parties waived oral argument.

The following facts are not in dispute: In January 2007, Plaintiff was hired as a Senior Specialist to the Emerging Europe Middle East and Africa Desk ("EEMEA Desk") in Merrill's Global Equity Markets Department and paid an annual salary of $55,000. (See Defs.' Statement Pursuant to Local Rule 56.1, dated Dec. 21, 2010 ("Defs. 56.1"), ¶¶ 1, 4; Plaintiff's Rule 56.1(b) Counterstatement of the Disputed Material Facts in Opp'n to Defs.' Mot. for Summ. J., dated Jan. 28, 2011 ("Pl. 56.1"), ¶¶ 1, 4.)

After the close of business on October 21, 2008, Plaintiff and several of her co-workers voluntarily gathered at a bar near Merrill's New York Office. (Defs. 56.1 ¶ 27; Pl. 56.1 ¶ 27.) The event "was not an official function of [Merrill]" and Merrill "did not pay for the drinks at the bar." (Defs. 56.1 ¶ 27; Pl. 56.1 ¶ 27.) Plaintiff left the bar at approximately 8:00 p.m. with three of her co-workers, including Kenneth Kim ("Kim"), a Director of another desk at Merrill, whom Plaintiff described as "her friend[]." (Defs. 56.1 ¶¶ 31--32, Pl. 56.1 ¶¶ 31--32.) After stopping at another friend's apartment and another pub, Plaintiff and Kim returned together to Plaintiff's apartment at approximately 10:00 p.m. (Defs. 56.1 ¶¶ 33--37; Pl. 56.1 ¶¶ 33--37.) Plaintiff alleges that Kim raped her there. (Defs. 56.1 ¶ 38; Pl. 56.1 ¶ 38.) On or about October 23, 2008, Plaintiff pressed criminal charges against Kim. (Compl. ¶ 34; Defs. 56.1 ¶ 39; Pl. 56.1 ¶ 39.) Merrill placed Kim on leave pending disposition of the charges. (Defs. 56.1 ¶ 40; Pl. 56.1 ¶ 40.) On or about November 5, 2009, Kim pled guilty to Coercion in the Second Degree in violation of N.Y. Penal Law § 135.60(1), a Class E misdemeanor. (Defs. 56.1 ¶ 47; Pl. 56.1 ¶ 47.) Merrill terminated Kim from his position shortly thereafter. (Defs. 56.1 ¶ 47; Pl. 56.1 ¶ 47.)

Merrill also provided Plaintiff with a paid leave of absence until February 2009 when she "decided not to return to Merrill." (Defs. 56.1 ¶¶ 41--42; Pl. 56.1 ¶¶ 41--42.) In or about mid-February 2009, Plaintiff raised with Merrill, for the first time, allegations -- separate from the alleged rape -- that she had been subjected to a hostile work environment while at Merrill. (Defs. 56.1 ¶ 43; Pl. 56.1 ¶ 43.) Upon learning of the allegations, "Merrill engaged an independent law firm, Orrick Herrington & Sutcliff LLP ("Orrick"), to conduct an investigation into Plaintiff's claims, which Orrick memorialized in a report." (Defs. 56.1 ¶ 44; Pl. 56.1 ¶ 44.) The report concluded, among other things, that Plaintiff's hostile work environment claims could not be substantiated and that Merrill employees viewed the environment at Merrill as "collegial, professional and respectful." (Defs. 56.1 ¶¶ 45--46; Pl. 56.1 ¶¶ 45--46; Mem. to Michael Putetti, Esq. from Aimee B. Flortin, Esq., dated June 5, 2009, at 6.) On December 23, 2009, the United States Equal Employment Opportunity Commission issued Plaintiff a "Notice of Right to Sue" letter. (Compl. ¶ 6; see also Notice of Right to Sue (Issued on Request) by the U.S. Equal Employment Opportunity Commission, dated Dec. 23, 2009.)

For the reasons stated below, Merrill's motion for summary judgment is granted.

III. Legal Standard

Summary judgment should be granted where "there is no genuine issue as to any material fact and . . . the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). "The court construes all evidence in the light most favorable to the non-moving party, drawing all inferences and resolving all ambiguities in h[er] favor." Amore v. Novarro, 624 F.3d 522, 529 (2d Cir. 2010); see Salerno v. City Univ. of N.Y., No. 99 Civ. 11151, 2003 WL 22170609, at *10 (S.D.N.Y. Sept. 18, 2003). The non-movant must "set forth specific facts showing that there is a genuine issue for trial," Fed. R. Civ. P. 56(e), and must "produce evidence that would permit a rational juror to render a verdict in h[er] favor," Goenaga v. March of Dimes Birth Defects Fund, 51 F.3d 14, 18 (2d Cir. 1995). See Brant v. Cnty. of Dutchess, No. 05 Civ. 10590, 2008 WL 418379, at *3 (S.D.N.Y. Feb. 11, 2008).

"In a discrimination case such as this one, the defendant 'will be entitled to summary judgment . . . unless the plaintiff can point to evidence that reasonably supports a finding of prohibited discrimination.'" Chenette v. Kenneth Cole Prds., Inc., No. 05 Civ. 4849, 2008 WL 3176088, at *3 (S.D.N.Y. Aug. 6, 2008) (citing Joseph v. Leavitt, 465 F.3d 87, 90 (2d Cir. 2006)).

"As a general proposition, employers are not responsible under Title VII for hostile sexual acts resulting from nonwork-related, off-duty interactions between co-employees." Feliciano v. Alpha Sector, Inc., No. 00 Civ. 9309, 2002 WL 149139, at *8 (S.D.N.Y. July 12, 2002) (citing P. v. Delta Air Lines, Inc., 102 F. Supp. 138 (E.D.N.Y. 2000)). "When a co- employee -- as distinct from a supervisor -- is alleged to have engaged in harassing activity, the employer will generally not be liable unless the employer either provided no reasonable avenue of complaint or knew of the harassment but did nothing about it." Quinn v. Green ...

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