A reversal could leave the billionaire media magnate on the hook in a civil suit from a woman who says another Bloomberg employee raped her.
ALBANY, N.Y. (CN) — New York’s highest court appeared hesitant to change liability rules Thursday in hearing harassment claims from a fired Bloomberg employee who says a supervisor raped her.
The unnamed woman behind the lawsuit says the Bloomberg marketing department hired her just out of college when she was 22.
Though her main target is Nicholas Ferris, the global business director of Bloomberg’s Brief Newsletter Division, she also accuses the company’s eponymous founder of fostering a hostile work environment.
The complaint says Ferris started to make unwanted advances within weeks of the woman’s employment, then touched her inappropriately at a radio event in early 2013. Ferris continued to accost the woman with texts and emails, according to the complaint, and then raped her that February and again in March while she was drunk.
The woman also alleges Ferris caused her to become dependent on drugs he hid throughout the Bloomberg LP office, and that the feared of retaliation kept her from going to human resources. In October 2015, she was placed on medical leave following a breakdown and fired two months later.
CEO Michael Bloomberg was mayor of New York City during part of the woman’s tenure at the company.
A trial court hearing the case initially dismissed the billionaire media magnate from the complaint, finding that the claims did not personally involve the CEO as an individual. Later, however, the court found that Bloomberg could face repercussions under the New York City Human Rights Law, which holds employers liable for some acts by managers and supervisors.
Bloomberg later had the claims tossed in a 3-2 decision from an intermediate appeals court, which said the complaint failed “to connect Mr. Bloomberg in any way to the specific discriminatory conduct allegedly committed by Mr. Ferris.”
On Thursday, the case went before New York’s highest court, the Court of Appeals in Albany.
The woman’s attorney, Niall Macgiollabhui, argued Bloomberg did not personally harass the woman but that he should be held responsible for the culture at the company that allowed such harassment.
“Mr. Bloomberg in this case is not somebody who is a defendant in this case simply because he holds a particular title or simply because he holds a certain amount of stock in the company,” Macgiollabhui said. “He’s in this case because of what he did.”
Macgiollabhui conceded that a jury might clear the erstwhile presidential contender but that he should still stand trial. “That does not mean ultimately at the end of this case he will be found responsible, but at this juncture he does have a case to answer.”
Despite her sympathy to the idea that Bloomberg had some responsibility for the culture at the company, Judge Jenny Rivera seemed hesitant at the idea of a new judicial rule for vicarious liability.
“You’re [arguing] that Michael Bloomberg is responsible for having set that culture in place, that indeed he really is responsible for the opportunity and the environment that allowed for this kind of conduct to be encouraged, to have occurred, and to not be disciplined,” Rivera said.
Macgiollabhui agreed, stating that employers and higher-ups who have control over their companies and set the culture tone should face liability for the actions of subordinates in some cases. “I think accountability matters,” he said. “There shouldn’t be a cut-off, as it were, that if you’re elevated enough within a corporate hierarchy therefore you are insulated from liability as a result of your own conduct.”
Rivera later grilled Bloomberg’s attorney, Elise Bloom, on whether he could be held liable if discovery revealed that Bloomberg was not an ordinary shareholder and had actual control over the company.
“There are no allegations in this case that would support a conclusion that Mr. Bloomberg was in any way involved in any of the acts that happened in this case,” Bloom said. “It’s our position that based on the very, very detailed allegations in the complaint, that the only purpose of discovery in this case would be to try to uncover some fact, and that’s not the purpose of discovery.”
Bloom also stressed several times that the complaint had cherry-picked from media coverage on decades-old rumors about the culture at Bloomberg.
Sexual harassment lawsuits have dogged Bloomberg before, with women filing several lawsuits over the years claiming the CEO sexually discriminated against women.
Early last year, media reports about “The Wit and Wisdom of Michael Bloomberg” came out, detailing a 32-page booklet that allegedly included raunchy and sexist comments by Bloomberg. One of the comments included Bloomberg allegedly telling a co-workers to “kill it!” after learning she was pregnant.
Rivera said it did not matter that the woman could not prove Bloomberg was responsible for any alleged culture of harassment at the company. “They may not be able to prove it. The question is whether the complaint is sufficient to get them past that [discovery] threshold,” Rivera said.
Despite some of the judges’ seeming sympathetic with the idea that Bloomberg was responsible for the culture at the company, they also seemed loathe to institute a judicial policy change.
At the outset of oral arguments, Chief Judge Janet DiFiore pressed Macgiollabhui on whether the city’s law could allow Bloomberg to be held vicariously liable. “So where is the language in the city human rights law that supports the position that corporate shareholders were intended to be held strictly liable as employers for unlawful, discriminatory acts of corporate employees. Where is that?”
“It’s not there, your honor,” Macgiollabhui admitted.
Judge Leslie Stein also pushed Macgiollabhui on whether accountability already existed for Bloomberg and other owners. “If you’re looking for personal liability, aren’t there other provisions in the city human rights law that would create that, that aren’t based on vicarious liability?” she asked. “Isn’t that accountability already there?”
Macgiollabhui said accountability for vicarious liability likely didn’t exist under the statute, admitting that executives could face liability under aiding-and-abetting claims. Originally, the complaint included such a claim against Bloomberg, but it was dismissed and never appealed.
Liability only for the executive who administers a corporate policy, and not the one who set the policy, is wrong-headed, Macgiollabhui argued. “You’re pinning all the blame on lower-level employees, lower-level supervisors, and you’re insulating the people at the top, the people who set the course for companies,” he said.