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Stuart Cosgriff v. Valdese Weavers LLC

March 30, 2012

STUART COSGRIFF, PLAINTIFF,
v.
VALDESE WEAVERS LLC, DEFENDANT.



The opinion of the court was delivered by: Wood, U.S.D.J.:

OPINION & ORDER

Plaintiff Stuart Cosgriff ("Cosgriff") brings this diversity action against Defendant, Valdese Weavers LLC ("Valdese"), alleging that Valdese terminated its business relationship with Cosgriff because of his age, in violation of § 8-107(1)(a) of the New York City Human Rights Law ("NYCHRL"), and his perceived disability, in violation of § 8-107(1)(a) of the NYCHRL. Cosgriff also alleges that Valdese terminated its business relationship with him in retaliation for Cosgriff's filing of a sexual harassment complaint, in violation of § 8-107(7) of the NYCHRL. Pursuant to Federal Rule of Civil Procedure 56 ("Rule 56"), Valdese moves for summary judgment on the ground that Cosgriff is an independent contractor and therefore not entitled to the protections afforded by the NYCHRL. For the reasons set forth below, Valdese's motion for summary judgment is GRANTED.

I. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed R. Civ. P. 56(a). A genuine issue for trial exists if, based on the record as a whole, a reasonable jury could find in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009). In resolving this inquiry, the Court construes all evidence "in the light most favorable to the non-moving party and draws all reasonable inferences in that party's favor." Cox v. Warwick Valley Cent. School Dist., 654 F.3d 267, 271 (2d Cir. 2011).

The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Miner v. Clinton Cnty., N.Y., 541 F.3d 464, 471 (2d Cir. 2008). Once the movant satisfies this burden, the onus shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250 (internal quotations omitted). The non-moving party may not rely on "conclusory allegations or unsubstantiated speculation," Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998), and "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, the non-moving party must set forth significant, probative evidence on which a reasonable fact-finder could decide in its favor. Anderson, 477 U.S. at 256-57. "If reasonable minds could differ as to the import of the evidence and if there is any evidence in the record from any source from which a reasonable inference in the nonmoving party's favor may be drawn, the moving party . . . cannot obtain a summary judgment." Brady v. Town of Colchester, 863 F.2d 205, 211 (2d Cir. 1988) (internal quotation omitted). Yet, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita Elec. Ind. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986) (citations omitted).

As noted above, since Cosgriff is the party opposing summary judgment, the Court views the evidence in the light most favorable to him and draws all reasonable inferences in his favor. See United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

II. FACTUAL BACKGROUND

Unless otherwise noted, the following facts are undisputed and are derived from the parties' Local Civil Rule 56.1 statements, affidavits, and other submissions. The Court deems admitted any statement of material fact that is not specifically controverted by the opposing party. See Fed R. Civ. P. 56.1(c). The Court resolves all ambiguities and draws all reasonable inferences in Cosgriff's favor. See Sledge, 564 F.3d at 108.

Cosgriff began his career in the textile industry in 1972, working as an employee of Mastercraft Fabrics ("Mastercraft"), a fabric manufacturer and seller in North Carolina. (Defendant's Local Civil Rule 56.1 Statement ( "Def. 56.1 Stmt.") ¶¶ 8-9; Plaintiff's Response to Defendant's 56.1 Statement ("Pl.'s Resp. to Def. 56.1 Stmt.") ¶¶ 8-9.) In 1977, Cosgriff moved to New York to work in sales for Mastercraft. (Def. 56.1 Stmt. ¶ 9; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 9.) In 1978, Cosgriff resigned from Mastercraft, incorporated a sales agency called Cosgriff Associates, and began to sell Mastercraft fabrics as an independent contractor. (Def. 56.1 Stmt. ¶¶ 10-11; Pl.'s Resp. to Def. 56.1 Stmt. ¶¶ 10-11.) In 1992, Cosgriff dissolved Cosgriff Associates and incorporated Highland Fabrics as a successor corporation, continuing to sell Mastercraft fabrics as an independent contractor. (Def. 56.1 Stmt. ¶ 12; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 12.). Cosgriff incorporated Highland Fabrics in part so that he could include his wife's new interior decorating company, Summa Interiors, as a division of Highland Fabrics. (Def. 56.1 Stmt. ¶ ¶ 13-14; Pl.'s Resp. to Def. 56.1 Stmt. ¶¶ 13-14.) Cosgriff and his wife, Hilary Cosgriff, are the joint shareholders of Highland Fabrics. (Affidavit of Brian Heller, dated January 7, 2011, ("Heller Aff.") Ex. H (Deposition of Stuart Cosgriff, dated September 2, 2010 ("Cosgriff Dep. I")) at 18-19.)

Valdese is a textile company headquartered in North Carolina that produces and sells fabrics. (Def. 56.1 Stmt. ¶ 1.) In April 2001, Valdese and Highland Fabrics/Stu Cosgriff executed an Independent Sales Representative Agreement ("the Agreement") pursuant to which Highland Fabrics would represent Valdese in its Northeast Sales Territory. (Def. 56.1 Stmt. ¶ 18; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 18.) Although the parties dispute the extent to which the contractual language reflects the actual intent of the parties, the Agreement expressly states that Highland Fabrics/Stu Cosgriff would be considered an independent contractor rather than an employee: "[Valdese] and [Highland Fabrics] intend that the relation of [Highland Fabrics] to [Valdese] is that of an independent contractor. Neither [Highland Fabrics] nor any agent, employee, or servant of [Highland Fabrics] shall be or shall be deemed to be the employee, agent, or servant of [Valdese]." (Def. 56.1 Stmt. ¶ 21; Pl.'s Resp. to Def. 56.1 Stmt. ¶21; Heller Aff., Ex. A, Independent Sales Representative Agreement ("Agreement") ¶ 14.) Under the Agreement, Highland Fabrics and its principals were to use their "own judgment and discretion in the actual performance of the sales representation herein provided for, including the time that such representation shall be performed." (Agreement¶ 12.) Highland Fabrics was also to pay for its own costs and expenses in representing Valdese, including "office expense, personnel expense, transportation, lodging, meals, customer entertainment, etc." (Id. ¶ 11.)

The Agreement limited the authority Valdese gave to Highland Fabrics and stated that Highland Fabrics did not have the power to make contracts in the name of or binding on Valdese. (Id. ¶ 13.) All orders taken by Highland Fabrics were subject to acceptance and confirmation by Valdese. (Id. ¶ 4.) Valdese retained the right to decline to accept any order, decline to ship any products, discontinue sale of any product, or to allocate products during periods of shortages. (Id.)

The Agreement further stipulated that Valdese would pay Highland Fabrics on a commission basis, according to the selling price of the products that Highland Fabrics sold. (Agreement ¶ 6.) Valdese recorded the payments of those commissions on Internal Revenue Service 1099 Forms and never issued a W-2 form to Cosgriff or anyone else at Highland Fabrics. (Def. 56.1 Stmt. ¶ 23; Declaration of Joan Gilbride, dated March 14, 2011 ("Gilbride Dec."), Ex. I). Highland Fabrics, in turn, issued payments to Cosgriff and others at Highland Fabrics. (Def. 56.1 Stmt. ¶ 23.) Cosgriff purchased his own computer, health insurance, life insurance, and accountant services and represented them all as business expenses of Highland Fabrics. (Id. ¶ 31.)

Valdese provided all the fabric samples that Highland Fabrics distributed to customers. (Pl.'s Resp. to Def. 56.1 Stmt. ¶ 91.) Statements conflict as to Valdese's control over the distribution of the samples, specifically, whether Valdese dictated which customers would receive samples, or whether the decisions were made by Valdese in collaboration with the sales representative based on the representative's recommendation and historical sales. (Def.'s Counterresp. to Pl.'s 56.1 Counterstmt. ¶ 95.)

Highland Fabrics hired Cosgriff's daughter, Stacey Weinberg, as well as Neil Nahoum ("Nahoum") and Cathy Schneider ("Schneider"), as employees. (Def. 56.1 Stmt. ¶¶ 34-38; Pl.'s Resp. to Def. 56.1 Stmt. ¶¶ 34-38.)

When Highland Fabrics first contracted with Valdese in 2001, Highland Fabrics assumed the lease for a space at 37 East 27th Street, which had been used previously by another independent contractor representing Valdese. (Pl.'s Resp. to Def. 56.1 Stmt. ¶ 28.) In 2004, Highland Fabrics changed showrooms, entering into a lease agreement for a space located at 11 E. 26th Street. (Id. at ¶ 29; Gilbride Dec. Ex. J) Highland paid for the move and was responsible for all lease payments. (Def. 56.1 Stmt. ¶ 29; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 29.) Prior to the move, a Valdese employee traveled to New York to view the space. Cosgriff states that Valdese's approval of the space was required. (Pl.'s Resp. to Def. 56.1 Stmt. ¶ 96.) The showroom doors in both buildings displayed Valdese's name and logo, and "Valdese Weavers" also appeared on the building directory in the lobby of the 37 East 27th Street showroom. (Id. ¶ 87.)

Cosgriff answered the office phones, "Valdese Weavers" and distributed business cards with that name. (Id. ¶¶ 86, 90.) When in New York, Valdese personnel also used the showroom as office space, and both parties agree that, for some period of time, Valdese reimbursed between $1,000 and $1,200 per month of Highland Fabric's expenses; the parties dispute whether that payment was made as a payment of rent in exchange for Valdese's use of a desk, computer, and phone. (Def.'s Counterresp. to Pl.'s 56.1 Counterstmt. ¶ 85; Cosgriff Dep. I. at 119, 135, 140.)

Beginning in 2001 and continuing intermittently through 2008, Cosgriff complained to managers at Valdese Weavers about sexual harassment of female customers and female employees by Mike Shelton, Valdese's President of Sales. On one occasion, in 2002, Cosgriff witnessed Shelton "inappropriately hug" a female Valdese employee. (Cosgriff Dep. I at 173.) On other occasions Cosgriff was informed of the harassment by others. (Id.) In October 2008, a female Valdese employee filed an employment discrimination claim against Valdese with the Equal Employment Opportunity Commission, alleging that Shelton engaged in a persistent campaign of sexual harassment against her. (Heller Aff., Ex. G.)

In 1978, Cosgriff had been in a motor vehicle accident and injured his left leg, requiring multiple surgeries and skin grafts. (Def. 56.1 Stmt. ¶ 45.) This injury was well known to individuals at Valdese. (Def. 56.1 Stmt. ¶ 47; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 47.) Between 2001 and 2008, Cosgriff twice wore a temporary boot and used a cane to stabilize his foot after stress fractures. (Pl.'s Resp. to Def. 56.1 Stmt. ¶ 48.) ) Cosgriff also underwent three neck surgeries during 2003 and 2004. (Id. ¶ 49.) Cosgriff's lower left leg and foot were amputated on July 31, 2008. (Def. 56.1 Stmt. ¶ 50; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 50.) Cosgriff returned to work part-time on August 28, 2008 and returned to work full-time on October 1, 2008, shortly after which he began to use a prosthesis. (Pl.'s Resp. to Def. 56.1 Stmt. ¶ 51.) Cosgriff states that while he was speaking with Valdese managers in North Carolina over speakerphone, shortly before the surgery, Shelton made a comment referring to "Larry's Chop Shop," which Cosgriff states was a reference to his upcoming amputation. (Id.) Cosgriff also states that in October of 2008, another Valdese manager said, "it is very weird to see you without your bad foot." (Id.)

On November 21, 2008, Valdese terminated the Agreement with Highland Fabrics, after providing the requisite thirty days notice required by the contract. (Def. 56.1 Stmt. ¶ 69.) Cosgriff at that time was 60 years old. (Def. 56.1 Stmt. ¶ 20.) Valdese entered into a new agreement with NMN Fabrics and its principals Neil Nahoum and Cathy Schneider, who were two of the sales representatives who had been associated with Highland Fabrics, and who were both younger than Cosgriff. (Def. 56.1 Stmt. ¶ 70; Pl.'s Resp. to Def. 56.1 Stmt. ¶ 70.)

III. DISCUSSION

A. Applicable Law

The NYCHRL prohibits an employer from terminating an employee on the basis of, inter alia, age, disability, or the employee's engagement in an activity protected by that statute. See NYCHRL, §§ 8-107(1); 8-107(7).*fn1 The protections afforded by the NYCHRL extend to employees only, and not to independent contractors. Eisenberg v. Advance Relocation & Storage, 237 F.3d 111, 113 (2d Cir. 2000); Lavergne v. Burden, 665 N.Y.S.2d 272, 273 (N.Y. App. Div. 1997).*fn2 Whether a worker is an employee or an independent contractor is a question determined by the common law of agency. Cmty for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989); Salamon v. Our Lady of Victory Hosp., 514 F.3d 217, 226 (2d Cir. 2008). The relevant test, articulated by the Supreme Court in ...


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