Trathony Griffin and Michael Godwin, Appellants,v.Sirva, Inc. and Allied Van Lines, Inc., Respondents.BriefN.Y.March 28, 2017CTQ-2016-0002 Court of Appeals of the State of New York TRATHONY GRIFFIN and MICHAEL GOODWIN, Plaintiffs-Appellants, - against - SIRVA, INC. and ALLIED VAN LINES, INC., Defendants-Respondents. ------------------------------ ON CERTIFIED QUESTIONS FROM THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT, DOCKET NO. 15-1307 BRIEF FOR AMICUS CURIAE AMERICAN MOVING & STORAGE ASSOCIATION, INC. DANIEL GAMMERMAN, ESQ. Attorney for Amicus Curiae American Moving & Storage Association, Inc. 6800 Jericho Turnpike, Suite 110W Syosset, New York 11791 Tel.: (516) 921-5600 Fax: (516) 921-5666 February 6, 2017 NEW YORK STATE COURT OF APPEALS CERTIFICATE OF CORPORATE DISCLOSURE I hereby certify, pursuant to Rule 500.1(±), that Amicus Curiae American Moving & Storage Association, Inc. has no parents, subsidiaries or affiliates. Dated: Syosset, New York February 6, 2017 Daniel Gammerman, Esq. 6800 Jericho Turnpike, Suite 110W Syosset, New York 11791 Tel: (516) 921-5600 Fax: (516) 921-5666 Attorney for Amicus Curiae American Moving & Storage Association, Inc. i TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... ii STATEMENT OF THE CASE .................................................................................. 1 ARGUMENT ............................................................................................................. 5 I. SIRVA AND ALLIED ARE NOT “EMPLOYERS” UNDER HRL SECTION 296(15) ....................................................................... 5 II. ALLOWING PLAINTIFFS INTO CUSTOMERS’ HOMES WOULD CONSTITUTE AN UNREASONABLE RISK .................. 10 CONCLUSION ........................................................................................................ 16 ii TABLE OF AUTHORITIES Page(s) Cases: Dinah v. Salzman Electric Co., Inc., 2005 N.Y. Misc. Lexis 3591 (Sup. Ct. Queens Cty. 2005) ..................... 12, 13 In the Matter of the Board of Higher Education v. Carter, 14 N.Y.2d 138, 250 N.Y.S.2d 33 (1964) ......................................................... 6 Jacobson v. Comcast Corp., 740 F. Supp. 2d 683 (D. Md. 2010) ................................................................... 14, 15 Lawrence v. Adderley Indus., 2011 U.S. Dist. LEXIS 14386 (E.D.N.Y. 2011) ..................................... 13, 14 Peluso v. Smith, 540 N.Y.S.2d 631 (Sup. Ct. 1989) ................................................................ 11 Statutes & Other Authorities: 49 U.S.C. § 13907 ...................................................................................................... 3 49 U.S.C. § 13907(d) ................................................................................................. 4 49 C.F.R. § 375.205(a) ............................................................................................... 4 49 C.F.R. § 375.205(a)(1) .......................................................................................... 4 49 C.F.R. § 375.205(a)(2) .......................................................................................... 4 49 C.F.R. § 375.205(b) .............................................................................................. 4 49 C.F.R. § 375.205(c) ............................................................................................... 4 HRL § 291 ................................................................................................................ 10 HRL § 292(5) ............................................................................................................. 6 HRL § 296 .............................................................................................................. 5, 6 HRL § 296(15) ..................................................................................................... 5, 11 N.Y. Correct. Law § 750(2) ....................................................................................... 6 N.Y. Correct. Law § 752 .......................................................................................... 11 iii N.Y. Correct. Law § 753 .......................................................................................... 15 N.Y. Correct. Law § 753(1) ....................................................................................... 9 N.Y. Correct. Law article 23-A ............................................................................... 12 STATEMENT OF THE CASE Amicus curiae AMERICAN MOVING & STORAGE ASSOCIATION, INC. (“AMSA”), hereby adopts and incorporates the Statement of Case set out herein in the brief of defendants-appellees SIRVA, INC. (“SIRVA”) and ALLIED VAN LINES, INC. (“ALLIED”), with the following additional points. AMSA is the national trade association representing the interests of approximately 4,000 member companies that provide household goods moving and storage services in interstate, intrastate and local commerce. AMSA’s members include national van lines, agents, and independent moving companies, as well as international movers, along with suppliers of goods and services to the household goods moving and storage industry. Defendants-appellees SIRVA and ALLIED are both members in good standing of AMSA. The issues in this case center on the contractual relationship between a van line and its agents, and whether the facts and circumstances surrounding that relationship might lead to a finding that a van line is somehow an employer of the workers hired, managed, scheduled, paid and disciplined solely by the agent company. Such a finding would jeopardize the longstanding, federally regulated van line-agent structure in the household goods industry. Since at least the 1930’s, the U.S. household goods moving and storage industry has operated under a system of national van line companies, each with a 2 varying number of independently owned and operated agents. The van lines, such as ALLIED, have authority from the U.S. Department of Transportation to transport household goods by motor carrier in interstate commerce. (A-337). An agent, such as defendant ASTRO MOVING & STORAGE CO., INC. (“ASTRO”), typically does not have its own authority to operate in interstate commerce, but will have authority from a state or local government to provide moving and storage services in intrastate and/or local commerce. (A-338). This structure developed over time because it allowed a national van line to market its services nationwide, and to offer household goods moves to and from any place in the United States, while still having a local presence in every market. When a van line contracts with a customer for a move, the van line will contact the local agent to provide the actual packing, creation of inventory, loading, transportation, unloading and sometimes storage services. The move is conducted under the van line’s interstate operating authority. The move might take the local agent’s truck and driver hundreds of miles from the home base, however, and rather than return to the origin with an empty trailer, the agent may use the marketing services of the van line to secure a return move heading in the direction of home. This allows both the van lines and the agents to operate most efficiently with the highest load factors and the fewest empty miles. When the customer pays for the move, the van line and agent split 3 the revenues based on a contractually pre-arranged percentage and other charges and fees. Additionally, agents may (but are typically not required to) use ancillary services offered by the van lines, such as billing, loss and damage claims management, accounting services, insurance and other matters that offer the agents economies of scale and allows them to operate efficiently as part of a nationwide system. But the agents are and remain separately incorporated and independently owned and operated businesses. They may bid for and provide local or intrastate moves, often in competition with the national van line or other agents from the same or different van line systems. Van line agents have a contractual relationship with their national van line, but these relationships are not permanent. Agents often change van lines at the end of a contractual term, seeking a better financial deal or a more cohesive working arrangement from a different national van line. Or, an agent may simply decide to avoid being part of any national van line system and become an independent moving and storage company, providing all of its moving and storage services under its own interstate and intrastate authorities. This relationship between a van line and its agents is recognized in federal statute, 49 U.S.C. § 13907. That statute also confers limited immunity from the antitrust laws for discussions or agreements between a motor carrier providing 4 transportation of household goods and its agents (whether or not an agent is also a carrier) related to rates, charges, terms of service and affiliated matters. 49 U.S.C. § 13907(d). Moreover, in addition to being subject to motor carrier safety and consumer protection requirements, the operating relationship between a van line and its agent is also regulated by the U.S. Department of Transportation. 49 C.F.R. § 375.205(a) allows a household goods motor carrier authorized to operate in interstate commerce to have agents as long as the carrier and its “prime agent(s)”1 have written and signed agreements, and those agreements are retained in the carrier’s files for a period of at least 24 months following the date of termination of each agreement. 49 C.F.R. § 375.205(b) and (c). These regulations recognize the principal carrier/van line and the agent as separate and distinct entities, and the requirement for a written and signed agreement setting out the terms of the operating arrangement underscores the independent nature of the relationship. 1 Under 49 C.F.R. § 375.205(a)(1), a prime agent provides a transportation service for the principal motor carrier on its behalf, including the selling of, or arranging for, a transportation service. The principal carrier may permit or require the agent to provide services under the terms of an agreement or arrangement with it. A prime agent does not provide services on an emergency or temporary basis. A prime agent does not include a household goods broker or freight forwarder. A carrier may also have a temporary or emergency agent under 49 C.F.R. § 375.205(a)(2), and that agent may provide such services under the terms of an agreement or arrangement with the van line/carrier on an emergency or temporary basis. 5 Thus, the van line-agent relationship has a long commercial and regulatory history that has evolved to meet the needs of the national and local household goods motor carriers and their customers. It is not some recent invention designed to avoid employer responsibilities; rather, it is recognized by Congress and the federal regulatory agencies as a legal mechanism to promote efficient nationwide service to customers. AMSA and its members are vitally interested in maintaining that industry structure without imposing employer responsibilities on the van lines where none have ever been contemplated or recognized before. Van lines have never been considered the employer of their agents’ workers, and there is no compelling public policy reason for departing from that approach at this time. ARGUMENT I. SIRVA and ALLIED ARE NOT “EMPLOYERS” UNDER HRL SECTION 296(15) In granting summary judgement to SIRVA and ALLIED, the District Court held that HRL Sec. 296(15) applies only to employers because “only an employer can “deny…employment.” (A-355). To be deemed an "employer" under HRL Sec. 296, the District Court held that courts require a showing "that [the] person has: (A) any ownership interest in the employer; or (B) the power to do more than carry out personnel decisions made by others." To determine whether a defendant has 6 sufficient authority under prong (B), courts apply the "economic realities" test that balances "whether the alleged employer (1) had the power to hire and fire employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records." (A-356). Nothing in this case even remotely suggests that plaintiffs GRIFFIN and GODWIN had an employer-employee relationship with either SIRVA or ALLIED under either test in HRL Sec. 296. The HRL and Correction Law do not define the word “employer.”2 The HRL’s legislative history, however, reflects that the word “employer” should be construed according to its “accepted and dictionary meaning.” In the Matter of the Board of Higher Education v. Carter, 14 N.Y.2d 138, 143, 250 N.Y.S.2d 33 (1964), the Court cited the definition of “employer” in a report of the New York State Temporary Commission against Discrimination: …The [Temporary Commission’s] report noted that "We have found no definition of the word 'employer' as clear and comprehensive as the word itself in its accepted and dictionary meaning” (emphasis added). Id. at 148. 2 HRL § 292(5) states, “The term ‘employer’ does not include any employer with fewer than four persons in his or her employ.” Correction Law § 750 (2) defines “private employer” as “any person, company, corporation, labor organization or association which employs ten or more persons.” 7 The facts supporting summary judgement for SIRVA and ALLIED in the District Court, which led to the dismissal of the Complaint, conclusively establish that the Plaintiffs were not employees of SIRVA or ALLIED. The facts showed that ALLIED’s interstate moving services are provided to the general public through ALLIED’s national network of limited statutory household goods agents located throughout the United States (A-337). ASTRO is one of ALLIED’s limited household goods agents in New York (A-338). Neither SIRVA nor ALLIED had any employment contract with GRIFFIN or GODWIN (A-337, A-339). Under the Agency Contract between ALLIED and ASTRO, ASTRO’s employees are not employees of ALLIED, and ALLIED and ASTRO have no joint employer status with respect to either party’s employees. ALLIED has no control over the selection, hiring, compensation, benefits, work schedules, job assignments, supervision, discipline or termination of ASTRO’s employees (A-339). Therefore, ASTRO’s alleged termination of plaintiffs was beyond the scope of its Agency Contract with ALLIED. Plaintiffs produced no evidence in opposition to SIRVA’s and ALLIED’s summary judgment motion or at trial suggesting that either defendant engaged in any conduct, apart from ASTRO’s conduct that caused plaintiffs’ terminations. The reason that plaintiffs were terminated is that ASTRO learned through a subsequent background check that each employee had been convicted of child sex 8 abuse charges. In 1997, GRIFFIN pleaded guilty to first degree child abuse and sexual misconduct for a sexual assault against a 7-year-old boy (A-340). In 1999, GODWIN pleaded guilty to first degree rape and first degree sexual abuse for a sexual assault against a 7-year-old girl (A-340). GRIFFIN and GODWIN had, respectively, served ten (10) years and nine (9) years in prison before being hired by ASTRO. Both are considered “Sexually Violent Offenders” under New York State criminal statutes and both remain under parole supervision. They are each prohibited from having any contact with children under eighteen (18) years of age unless accompanied by another adult (A-340). While they were employed by ASTRO, plaintiffs had no contact or communication with SIRVA or ALLIED, nor did they ever receive training or compensation from SIRVA or ALLIED (A-106, ¶90). Neither SIRVA nor ALLIED instructed ASTRO to terminate plaintiffs and Appellees had no prior knowledge of, or communication with, ASTRO about plaintiffs’ terminations before they occurred (A-106, ¶¶94-95). The only contact that ALLIED has with plaintiffs was whether they met the standards of ALLIED’s “Certified Labor Program,” which requires agents to screen their contractors and employees for significant felony criminal histories that disqualify them from participating in ALLIED’s interstate moving jobs (A-341). In developing its interstate CLP standards, ALLIED took into consideration all of 9 the factors, excluding age, set forth in N.Y. Correct. Law Sec.753(1) under which plaintiffs bring this action.3 Under ALLIED’s “Adjudication Guidelines” an agent’s, contractor’s or employee’s felony conviction for any sexual offense requires permanent disqualification from the agent’s jobs performed under ALLIED’s interstate motor carrier operating authority (A-342). Such a determination does not require or even suggest, however, that the agent must terminate or otherwise discipline its employees in any manner. ASTRO remained free to retain plaintiffs, regardless of their criminal backgrounds, for use in ASTRO’s own local, intrastate moving services under its own New York State Department of Transportation public mover licenses (A-343), or to perform other tasks that do not involve interacting with customers or members of the public. The reason for stringency in ALLIED’s Certified Labor Program is obvious. A customer typically invites a household goods mover’s workers into the 3 The factors considered by ALLIED in establishing its CLP rules include: (1) the seriousness of previous crime(s); (2) possible rehabilitation of the applicant based on the length of time since a criminal act; (3) the safety of ALLIED’s customers and their families; (4) the potential legal liability and business impact on ALLIED in the event an agent hires someone with a known criminal background who commits a crime against an ALLIED customer; (5) whether ALLIED’s customers would consent to having persons with certain criminal histories enter their homes if the customers knew about such histories; (6) ALLIED’s potential legal duty to advise customers of its agents’ employment of convicted sex offenders as drivers, packers or helpers who might come into contact with their children or other family members; (7) the high probability of repeat crimes being committed by sex offenders; (8) the labor shortage in the moving industry and (9) the public policy of some states to encourage employment of rehabilitated criminals (A-280, ¶56). 10 customer’s home. The workers must handle and pack up all of the customer’s most prized possessions, load them on the truck, and safely transport them to a new home. This process of packing, moving and unpacking often takes several days, and usually requires working unsupervised in close proximity to and interaction with a customer and his or her family, including children. The customer must be able to trust implicitly that the moving company will not endanger the safety or security of the customer’s home, possessions or family members. If that trust is broken, the household goods moving industry as presently constructed will cease to exist in short order. Thus, the disqualification standard for a felony conviction for any sexual offense in ALLIED’s Certified Labor Program seems reasonable and appropriate under the circumstances. In contrast, any decision that might require or suggest that household goods movers must employ or contract with felons with sexual offense convictions, which necessarily requires placing them in customers’ homes and around their families, would be patently dangerous and irresponsible. II. ALLOWING PLAINTIFFS INTO CUSTOMERS’ HOMES WOULD CONSTITUTE AN UNREASONABLE RISK HRL Sec. 291 provides: Equality of opportunity a civil right. 1. The opportunity to obtain employment without discrimination because of age, race, creed, color, national origin, sexual orientation, military status, sex, marital 11 status, or disability, is hereby recognized as and declared to be a civil right. Under HRL Sec. 296(15) and Correction Law Sec. 752, it is unlawful for any public or private employer to deny any application for a license or employment "by reason of the individual's having been previously convicted of one or more criminal offenses" unless (1) there is a direct relationship between the criminal offense and employment sought or (2) employment would pose an unreasonable risk to individual or public safety. Plaintiffs herein clearly pose an unreasonable risk to household goods moving and storage customers and to the public. In Peluso v. Smith, 540 N.Y.S.2d 631, 634 (Sup. Ct. 1989), the trial court noted: The purpose of Correction Law article 23-A…was not to give ex-convicts preferred treatment; but to try to remove prejudice against former criminals obtaining jobs or licenses. Such prejudice, according to research, was not only widespread but unfair and counterproductive. While offenders were encouraged upon release from prison as part of their rehabilitation to find employment, their criminal records caused great difficulty though there was no connection between the job or license and the crime committed, its circumstances or the offender's back- ground. … Failure to find employment resulted in personal frustration, injured society as a whole, and contributed to a high rate of recidivism.; "the key to reducing crime is a reduction in recidivism," which this law (Correction Law art 23-A) would encourage but "in no way requires the hiring of former offenders" (internal citations omitted)(emphasis added). 12 Correction Law article 23-A attempts to balance the interests of reducing recidivism while protecting the public by requiring employers and public agencies to deal equitably with ex-offenders yet protect society's interest in assuring job performance by reliable, trustworthy and non-threatening persons. Id. But there is no balancing of interests that would allow the Court to mandate that convicted child sex offenders must have unsupervised access to a customer’s home or family members under the guise of promoting rehabilitation and re-entry into the job market. Public policy dictates that an unwitting customer’s safety and security take precedence over criminal rehabilitation interests. Other courts have reached this conclusion in similar cases. A New York trial court held that a mere contracting party cannot be deemed an “employer” under the HRL for merely refusing to work with another contracting party’s employees. In Dinah v. Salzman Electric Co., Inc. 2005 N.Y. Misc. Lexis 3591 (Sup.Ct. Queens Cty. 2005), the plaintiff was an employee of defendant Salzman who was a subcontractor of co-defendant Silverlining Interiors, Inc. Most of Salzman’s work was for Silverlining. When Silverlining advised Salzman that the plaintiff could no longer work at Silverlining’s job sites, Salzman stopped assigning jobs to the plaintiff. The plaintiff sued Salzman and Silverlining alleging an HRL discrimination claim. Silverlining moved to dismiss on the ground that it was not the plaintiff’s 13 employer. The Court granted Silverlining’s motion, holding that it had no direct control over the plaintiff’s employment by Salzman. As in this case, Silverlining did not establish the plaintiff’s wages, collect taxes or provide insurance or other benefits to the plaintiff. Id. at *2. Likewise, in Lawrence v. Adderley Indus., 2011 U.S. Dist. LEXIS 14386 (E.D.N.Y. 2011) the plaintiff filed an action against Adderley and Cablevision alleging violations of the Federal Fair Labor Standards Act and New York Labor Law. Id. at *1. Pursuant to a Services Agreement, Adderley performed installation, service and repair work for Cablevision in private residences and commercial buildings Id. at *3. Cablevision was Adderley’s only client. Adderley was required to provide services to Cablevision in accordance with the latter’s procedures and specifications and furnish employees trained in accordance with Cablevision’s standards. Id. at *4. Cablevision kept a list of approved Adderley workers and anyone not on the list was not permitted to install Cablevision equipment. Id. at *9. Cablevision could remove individuals from the approved list, but Adderley could employ a non-approved technician in other capacities. Id. at 9-10. Cablevision also required Adderley “to perform criminal background checks, before hiring a technician…to protect the safety of Cablevision’s customers, whose homes Adderley’s technicians will be entering, and 14 Cablevision’s equipment, to which the technicians have access.” Id. at *10. The Services Agreement gave Cablevision the right to remove any Adderley employee from a Cablevision project, but Cablevision could not require Adderley to fire a technician. Id. Furthermore, Cablevision did not control Adderley technicians’ compensation, benefits, discipline or performance. Id. The District Court held that Cablevision was not a “joint employer” because it exercised no actual or functional control over the plaintiff. With respect to Cablevision’s background check policy, the Court held: Cablevision’s drug testing and background-check policy also does not indicate an employee/employer relationship. Rather, it is only good business sense for [Cablevision] to attempt to insure that [the technicians sent to its customers’ [homes] are fit to [enter those homes]. Id. at *25-26. See also, Jacobson v. Comcast Corp., 740 F. Supp. 2d 683 (D.Md. 2010), wherein Comcast required all contractors’ prospective technicians to pass criminal background checks and drug screening tests. Comcast was required to approve all prospective technicians prior to their hiring by the contractors. Comcast had authority to revoke a contractor’s technician’s "authorized contractor" status and prohibit him from working for Comcast. Thus, Comcast could effectively terminate a contractor’s non-approved technician. However, the Court held that Comcast was not the plaintiff’s employer. The Court reasoned that, although Comcast "unquestionably plays a role in hiring and firing technicians[,] …[i]t is 15 only in the context of quality control …that Comcast exercises power over the hiring or firing of technicians" (emphasis added). Id. at 689-90. These decisions properly weigh the overriding need to protect the public when a company must insert unsupervised workers into a customer’s home. Moreover, in this case, ASTRO could have elected not to terminate plaintiffs and, instead, employ them on ASTRO’s non-ALLIED local moves. Indeed, ASTRO contends that it did not terminate GRIFFIN and offered him warehouse work (A- 656, n.2). Alternatively, ASTRO could have reviewed the Sec. 753 factors and subjectively determined that either the "direct relationship" exception or the "unreasonable risk" exception applied to plaintiffs’ continued employment. CONCLUSION For the reasons set out above, the HRL's legislative history and the relevant precedents of this Court favor preserving the narrow common law definition of "employer." None of the established facts in the record of this case warrant an expansion of the scope of the term "employer" under the HRL beyond the limits intended by the Legislature, and amicus curiae AMSA respectfully requests that this Court reach the same conclusions of law as the District Court in granting summary judgment to defendant-appellees SIRV A and ALLIED. Dated: Syosset, New York February 6, 2017 16 Daniel Gammerman, Esq. 6800 Jericho Turnpike, Suite 11 OW Syosset, New York 11791 Tel: (516) 921-5600 Fax: (516)921-5666 Email: dgammerman@gmail.com Attorney for Amicus Curiae American Moving & Storage Association, Inc. NEW YORK STATE COURT OF APPEALS CERTIFICATE OF COMPLIANCE I hereby certify, pursuant to Rule 500.10), that the foregoing brief was prepared on a computer using Microsoft Word. Type: A proportionally spaced typeface was used as follows: Name oftypeface: Point Size: Line spacing: Times New Roman 14 Double Word Count: The total number of words in this brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, proof of service, certificate of compliance, corporate disclosure statement, questions presented, statement of related cases, or any authorized addendum containing statutes, rules, regulations, etc., is 3,482. Dated: Syosset, New York February 6, 2017 fl::. Daniernamtnerman, Esq. 6800 Jericho Turnpike, Suite 110W Syosset, New York 11791 Tel: (516) 921-5600 Fax: (516) 921-5666 Attorney for Amicus Curiae American Moving & Storage Association, Inc.