Case Name: In the Matter of Carol Aurecchione, Appellant, v. New York State Division of Human Rights et al., Respondents
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 2002-04-25
Citations: 98 N.Y.2d 21
Docket Number: 
Parties: In the Matter of Carol Aurecchione, Appellant, v New York State Division of Human Rights et al., Respondents.
Judges: 
Reporter: New York Reports
Volume: 98
Pages: 21–28

Head Matter:
[771 NE2d 231, 744 NYS2d 349]
In the Matter of Carol Aurecchione, Appellant, v New York State Division of Human Rights et al., Respondents.
Argued March 19, 2002;
decided April 25, 2002
POINTS OF COUNSEL
Edward Cherney, Port Jefferson, and John J. Andrews for appellant.
I. The local federal courts consistently grant prejudgment interest on back pay awards in employment discrimination cases. The State Division of Human Rights (SDHR) must do the same. (Saulpaugh v Monroe Community Hosp., 4 F3d 134; Gierlinger v Gleason, 160 F3d 858; Sharkey v Lasmo [AUL Ltd.], 214 F3d 371.) II. The purpose of the remedies set forth in the Human Rights Law is to make employees whole from the effects of employment discrimination. (Loeffler v Frank, 486 US 549; Albemarle Paper Co. v Moody, 422 US 405; West Virginia v United States, 479 US 305.) III. In employment discrimination cases tried in state courts, rather than in SDHR, prejudgment interest on back pay awards is invariably granted. (McIntyre v Manhattan Ford, Lincoln-Mercury, 176 Misc 2d 325; Boutique Indus. v New York State Div. of Human Rights, 228 AD2d 171; Tiffany & Co. v Smith, 224 AD2d 332; McIntosh v Irving Trust Co., 873 F Supp 872.) IV. The current trend of the law is to grant prejudgment interest. (State Div. of Human Rights v New York State Dept. of Correctional Servs., 90 AD2d 51; Matter of Kohler v Board of Educ. of S. Huntington Union Free School Dist., 142 AD2d 676; McIntyre v Manhattan Ford, Lincoln-Mercury, 176 Misc 2d 325; Matter of Boylan v Town of Yorktown, 179 AD2d 753; Barr v Crosson, 175 Misc 2d 865.) V. Georgeson & Co. v Stewart, upon which the court below relied, is unpersuasive authority. (Georgeson & Co. v Stewart, 267 AD2d 126, 95 NY2d 758; Matter of New York City Tr. Auth. v State Div. of Human Rights, 78 NY2d 207; Matter of Mize v State Div. of Human Rights, 33 NY2d 53; Boutique Indus. v State Div. of Human Rights, 228 AD2d 171; Tiffany & Co. v Smith, 224 AD2d 332.) VI. This proceeding is legal and not equitable. Prejudgment interest is mandatory and not discretionary. (Cornell v T.V. Dev. Corp., 17 NY2d 69; Eighteen Holding Corp. v Drizin, 268 AD2d 371; Lambert v Genesee Hosp., 10 F3d 46; Song v Ives Labs., 957 F2d 1041; Selbst v Touche Ross & Co., 587 F Supp 1015.) VII. Assuming, arguendo, that this proceeding is equitable, denial of prejudgment interest is an abuse of discretion. (Sharkey v Lasmo [AUL Ltd.], 214 F3d 371.)
Michael K. Swirsky, Bronx, and Gina M. Lopez for New York State Division of Human Rights, respondent.
The Division is constrained by law from granting preorder interest on back pay damages. (Georgeson & Co. v Stewart, 267 AD2d 126, 95 NY2d 753; State Div. of Human Rights v Massive Economic Neighborhood Dev., 47 AD2d 187; Child School v New York State Div. of Human Rights, 208 AD2d 478; American Intl. Group v Rosa, 224 AD2d 179; Matter of State Div. of Human Rights v Gissha White Plains Corp., 107 AD2d 750; Matter of City of Fulton v New York State Div. of Human Rights, 221 AD2d 971; Tiffany & Co. v Smith, 224 AD2d 332; Boutique Indus. v New York State Div. of Human Rights, 228 AD2d 171; State Div. of Human Rights v New York State Dept. of Correctional Servs., 90 AD2d 51.)
Franklin & Gringer, P.C., Garden City (Martin Gringer and Joshua A. Marcus of counsel), for Classic Coach and others, respondents.
I. The court below properly held that prejudgment interest on a State Division of Human Rights (SDHR) back pay award is within the discretion of the Commissioner as a matter of legislative mandate. (Matter of New York City Tr. Auth. v State Div. of Human Rights, 78 NY2d 207; Matter of Mize v State Div. of Human Rights, 33 NY2d 53; Matter of Imperial Diner v State Human Rights Appeal Bd., 52 NY2d 72; Georgeson & Co. v Stewart, 267 AD2d 126.) II. The court below properly held that the Commissioner did not abuse his discretion in denying petitioner-appellant prejudgment interest. (New York State Natl. Org. of Women v Pataki, 261 F3d 156.) III. Several courts have held that the Commissioner did not abuse his discretion by failing to award prejudgment interest. (State Div. of Human Rights v Massive Economic Neighborhood Dev., AD2d 187; American Intl. Group v Rosa, 224 AD2d 179; Matter of City of Fulton v New York State Div. of Human Rights, 221 AD2d 971; Child School v New York State Div. of Human Rights, 208 AD2d 478; State Univ. Agrie. & Tech. Col. at Farmingdale v State Div. of Human Rights, 134 AD2d 339; Matter of Corning Glass Works v Ovsanik, 84 NY2d 619.) IV. Petitioner-appellant cannot rely on federal law to assert prejudgment interest is mandatory under the Human Rights Law. (Matter of Classic Coach v Mercado, 280 AD2d 164; Thoreson v Penthouse Intl., 80 NY2d 490; Matter of State Div. of Human Rights v Gorton, 32 AD2d 933; Saulpaugh v Monroe Com munity Hosp., 4 F3d 134.) V. Petitioner-appellant cannot rely on cases in which plaintiff elected a judicial remedy instead of an administrative remedy under the Human Rights Law. (McIntyre v Manhattan Ford, Lincoln-Mercury, 176 Misc 2d 325, 256 AD2d 269; Matter of Boylan v Town of Yorktown, 179 AD2d 753; Matter of Kohler v Board of Educ. of S. Huntington Union Free School Dist., 142 AD2d 676; Barr v Crosson, 175 Misc 2d 865; Boutique Indus. v New York State Div. of Human Rights, 228 AD2d 171; State Div. of Human Rights v New York State Dept. of Correctional Servs., 90 AD2d 51; Tiffany & Co. v Smith, 224 AD2d 332.) VI. Georgeson & Co. v Stewart is good law. (Matter of New York City Tr. Auth. v State Div. of Human Rights, 78 NY2d 207; Matter of Mize v State Div. of Human Rights, 33 NY2d 53; Georgeson & Co. v Stewart, 267 AD2d 126.) VII. CPLR 5001 (a) is irrelevant to proceedings brought before the SDHR. (Matter of United States Power Squadrons v State Human Rights Appeal Bd., 84 AD2d 318, 59 NY2d 401.)

Opinion:
OPINION OF THE COURT
Ciparick, J.
Petitioner Carol Aurecchione prevailed in a human rights employment discrimination claim she filed against her former employer, respondents Classic Coach, Schoolman Transportation System, Inc. and Bill Schoolman. Following a finding of discrimination, the State Division of Human Rights (Division) awarded her back pay. The Division refused, however, to award "pre-determination interest" — interest accruing from the date of discrimination. The sole issue on this appeal is whether victims of employment discrimination are entitled to predetermination interest on back pay awards. We hold that, under the facts presented, the denial of pre-determination interest was an abuse of discretion.
In April 1986, respondent Classic — a charter bus service provider — hired Aurecchione as a charter reservationist, and eight months later promoted her to the position of office manager. Shortly thereafter, in February 1987, she began to function as a general manager. Her responsibilities were expanded, yet her salary (at most $350 a week) remained well below that of male office managers (who earned up to $700 a week). In October 1987, following a change of personnel, Classic eliminated Aurecchione's position as manager, and offered her a position as a reservationist, which paid considerably less. Aurecchione refused to accept the position and ultimately requested a termination letter.
On February 23, 1988, Aurecchione filed a formal complaint with the Division of Human Rights charging respondents with employment discrimination under the Human Rights Law. The Division held its first public hearing on November 21, 1995, and continued hearings on the complaint until June 27, 1996. In September 1998, the case was reassigned to a second Administrative Law Judge who ultimately issued her recommended decision and order on March 10, 1999. Finally, on April 29, 1999, approximately 11 years after Aurecchione filed her complaint and approximately 12 years after the first incident of discrimination, the Commissioner rendered his decision and order, awarding her $21,500 in back pay and $1,500 in compensatory damages for mental anguish and humiliation. Additionally, the Commissioner ordered that interest be added to the back pay award at the statutory rate of 9% per annum, accruing from the date of his final order. The Commissioner denied Aurecchione's request for pre-determination interest on the back pay award.
Aurecchione then brought this proceeding pursuant to Executive Law § 298, to challenge the Commissioner's denial of predetermination interest. The Appellate Division confirmed the determination, noting simply that the "Commissioner of the New York State Division of Human Rights acted within his discretion in not including interest on the award of back pay" (281 AD2d 543, 543 [2d Dept 2001]). We granted leave to appeal and now reverse.
The Human Rights Law (Executive Law art 15), affords employees the opportunity to "obtain employment without discrimination" (Executive Law § 291 [1]). To ensure the protection of this right the Legislature enacted a comprehensive statutory scheme that provides employees with both the means to combat employment discrimination and a framework for redress. The remedial nature of the statute evinces a legislative intent to compensate fully victims of employment discrimination.
The issue of "prejudgment" interest awards on back pay in the employment discrimination context has been addressed on numerous occasions in the federal courts. The Human Rights Law, while unique in many respects, seeks to remedy the same type of discrimination as its federal counterpart — title VII of the Civil Rights Act of 1964 (42 USC § 2000e et seq.). We have acknowledged the similarities and attempted to resolve federal and state employment discrimination claims consistently (see e.g. Ferrante v American Lung Assn., 90 NY2d 623, 629 [1997]). Because both the Human Rights Law and title VII address the same type of discrimination, afford victims similar forms of redress, are textually similar and ultimately employ the same standards of recovery, federal case law in this area also proves helpful to the resolution of this appeal (see id.).
In Loeffler v Frank (486 US 549, 557-558 [1988]), the United States Supreme Court, in the context of a title VII claim, characterized pre-determination interest as an essential accompaniment to back pay awards. The Court noted that the "backpay award authorized by § 706 (g) of Title VII is a manifestation of Congress' intent to make 'persons whole for injuries suffered through past discrimination' " (Loeffler, 486 US at 558 [internal citations omitted]). Despite the lack of reference to prejudgment interest in the text of the statute, "[p]rejudgment interest, of course, is 'an element of complete compensation' " (id.; see also Sharkey v Lasmo [AUL Ltd.], 214 F3d 371 [2d Cir 2000]; Gierlinger v Gleason, 160 F3d 858 [2d Cir 1998]; Saulpaugh v Monroe Community Hosp., 4 F3d 134 [2d Cir 1993]; Clarke v Frank, 960 F2d 1146 [2d Cir 1992]). Indeed, the Second Circuit has consistently held that "[t]o the extent that the damages awarded to the plaintiff represent compensation for lost wages, 'it is ordinarily an abuse of discretion not to include pre-judgment interest' " (Gierlinger, 160 F3d at 873, quoting Saulpaugh, 4 F3d at 145).
Although the Human Rights Law, like title VII, makes no specific reference to pre-determination interest, a liberal reading of the statute is explicitly mandated to effectuate the statute's intent (Executive Law § 300; Matter of Cahill v Rosa, 89 NY2d 14, 20 [1996]). Clearly, a central concern of the Human Rights Law is to make such victims "whole" (Executive Law § 297 [4] [c] [iii]). This Court has repeatedly acknowledged that as the purpose of an interest award (Spodek v Park Prop. Dev. Assoc., 96 NY2d 577 [2001]; Lawyers' Fund for Client Protection of State of N.Y. v Bank Leumi Trust Co. of N.Y., 94 NY2d 398, 407 [2000]; Prager v New Jersey Fid. & Plate Glass Ins. Co. of Newark, N.J., 245 NY 1, 5-6 [1927]). Predetermination interest awards are consistent with such concerns (see Loeffler, 486 US at 557-558). This is so because "an award of interest is often appropriate from the time at which a party was deprived of the use of money since without the addition of interest, the aggrieved party is not made whole" (Lawyers' Fund, 94 NY2d at 407).
Classic contends that it should not be penalized, by the imposition of interest, for the Division's delay and inefficiency. We have, on numerous occasions, rejected such arguments: "interest is not a penalty" (Love v State of New York, 78 NY2d 540, 544 [1991]). In Love, we affirmatively sanctioned the award of "prejudgment" interest in the context of a negligence claim. While the factual underpinnings of Love are somewhat distinct from the present appeal, the underlying policy concerns are identical. Specifically, interest is not a punishment arbitrarily levied upon a culpable party. Instead, an award of interest is simply a means of indemnifying an aggrieved person. It represents "the cost of having the use of another person's money for a specified period" (Love, 78 NY2d at 544).
Here, the Division determined that Classic wrongfully withheld payment of wages otherwise due Aurecchione. As a result, Aurecchione was deprived of the use of money at the time of discrimination. Furthermore, Classic, "who has actually had the use of the money, has presumably used the money to its benefit and, consequently, has realized some profit, tangible or otherwise, from having it in hand" (Love, 78 NY2d at 545). The denial of pre-determination interest here would be tantamount to an "interest-free loan" to Classic (Clarke v Frank, 960 F2d 1146, 1154 [2d Cir 1992]). Therefore, consistent with the underlying purpose and intent of the Human Rights Law to compensate victims of employment discrimination, here the award of pre-determination interest, accruing from the date of discrimination, complements the back pay award and is appropriate (Spodek, 96 NY2d 577; Lawyers' Fund, 94 NY2d at 407; Prager, 245 NY at 5-6).
We reject petitioner's argument, however, that predetermination interest must in every case be awarded as a matter of law, and hold that the Commissioner is afforded some discretion in determining the extent of appropriate compensation for violations of the Human Rights Law, subject to appellate review for abuse. Here, neither the Commissioner nor the Appellate Division offered any justification for the denial of pre-determination interest. We conclude, therefore, that the denial of pre-determination interest constituted an abuse of discretion (see Matter of New York City Tr. Auth. v State Div. of Human Rights, 78 NY2d 207, 219 [1991]).
Finally, we urge the Division to complete its interest calculation within 30 days (see Matter of Diaz Chem. Corp. v New York State Div. of Human Rights, 91 NY2d 932, 933-934 [1998]; Town of Oyster Bay v Commander Oil Corp., 96 NY2d 566, 576 [2001]).
Accordingly, the judgment of the Appellate Division should be reversed, with costs, and the matter remitted to the Appellate Division, with directions to remand to the New York State Division of Human Rights, for further proceedings in accordance with this opinion.
Chief Judge Kaye and Judges Smith, Levine, Wesley, Rosenblatt and Graffeo concur.
Judgment reversed, etc.