Scott v. Massachusetts Mut. Life Ins. Co., 86 N.Y.2d 429 (1995)

An independent contractor cannot bring a discrimination claim under Executive Law § 296(1)(a) unless they can demonstrate an employer-employee relationship; discrimination claims under Executive Law § 296(13) require showing a boycott, blacklisting, or concerted effort to disadvantage a protected class.

Summary

Marilyn Scott, an insurance agent, sued Massachusetts Mutual Life Insurance Company and its general agent, G. James Blatt, alleging discrimination based on gender, age, and marital status after her contract was terminated. Scott claimed violations of New York’s Human Rights Law, specifically Executive Law § 296(1)(a) and § 296(13). The court held that as an independent contractor, Scott could not claim discrimination under § 296(1)(a) because she failed to prove an employer-employee relationship. Furthermore, the court determined that § 296(13) did not apply because Scott did not demonstrate a boycott, blacklisting, or a concerted effort by the defendants to economically disadvantage women or any other protected group.

Facts

Marilyn Scott was hired as an insurance agent by G. James Blatt, a general agent for Massachusetts Mutual, in 1981 under a career contract explicitly stating that no employer-employee relationship was created. In 1987, she became a district manager. Both contracts were terminable at will. Blatt terminated Scott’s contract and her license to sell certain mutual funds in 1992. Scott was responsible for her operating expenses, support staff, and taxes were not withheld from her pay. She could also sell competitors’ products. She claimed she was required to recruit and train agents according to MassMutual’s guidelines, but this applied only to agents financed by MassMutual.

Procedural History

Scott sued Massachusetts Mutual and Blatt in New York Supreme Court, alleging discrimination under the Human Rights Law. The Supreme Court granted the defendants’ motion for summary judgment, dismissing the complaint. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

Issue(s)

1. Whether Scott, as an independent contractor, can bring a discrimination claim under Executive Law § 296(1)(a).
2. Whether Scott’s discrimination claim can proceed under Executive Law § 296(13), even if she is an independent contractor.

Holding

1. No, because Scott failed to raise a triable issue of fact as to whether an employer-employee relationship existed.
2. No, because Scott failed to present evidence of a boycott, blacklisting, or a concerted effort to economically disadvantage a protected class.

Court’s Reasoning

Regarding the first issue, the court stated that an employer-employee relationship exists when the employer exercises control over the results produced or the means used to achieve the results. Minimal control is insufficient. Here, Scott financed her operations, was paid by performance, didn’t have taxes withheld, could sell competitors’ products, and contracted as an independent contractor, demonstrating a high degree of independence. The court cited Matter of Ted Is Back Corp. [Roberts], 64 NY2d 725, 726, stating that "a determination that an employer-employee relationship exists may rest upon evidence that the employer exercises either control over the results produced or over the means used to achieve the results." Thus, summary judgment was proper.

Regarding the second issue, the court analyzed Executive Law § 296(13), noting its focus on boycotts, blacklisting, and refusals to deal. The court reasoned that "[s]ince the term ‘discriminate’ immediately precedes the list of terms including boycott, blacklisting and refusals to trade, that term should be construed to refer to similar types of commercial activity." Legislative history revealed that § 296(13) was enacted to address economic warfare against protected classes, such as the Arab Boycott Law. The court stated, "While the enactment found its impetus in the Arab boycott of Jewish businesses, it was drafted more broadly to prohibit not only boycotts imposed by foreign entities, but any business tactics, utilized in New York State or against a New York resident or corporation, which are driven by ‘religious or racial bigotry’" The court found no evidence of a formal boycott or blacklisting campaign against Scott, nor any pattern of conduct commercially disadvantaging only members of a protected class. Thus, the claim under § 296(13) was properly dismissed. The court emphasized that even without a formal boycott, a pattern of discriminatory conduct could suffice, citing Harvey v NYRAC, Inc., 813 F Supp 206. However, Scott’s allegations were insufficient to defeat summary judgment.