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Judge Rejects MTA Partnership Claim

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Staten Island court KOs health benefits recognized by Manhattan court, union contract

A state trial judge on Staten Island has rejected a lawsuit seeking domestic partnership health benefits for the New York City-registered partner of an employee of the State Island Rapid Transit Operating Authority (SIRTOA), a subsidiary of the both the New York Transit Authority (TA) and the Metropolitan Transportation Authority (MTA).

Ruling on December 22, Justice Philip G. Minardo granted the defendants’ motion to dismiss the case, rejecting the plaintiffs’ claim that it was improper to throw out the case before discovery could be held. Leslie Rios filed suit when SIRTOA refused to extend health care coverage to her domestic partner, Melissa Medina-Rios, after they registered their partnership at the city clerk’s office.

The New York Law Journal reported on the case in a page one article on December 28.

Ironically, the decision was issued just shortly after employees of the TA ratified a new collective bargaining agreement that will go into effect in 2005, providing domestic partnership health benefits for the employees. To compound the irony, that agreement was negotiated after a state trial judge in Manhattan, Robert D. Lippmann, ruled in January 2003 in a virtually identical lawsuit against the MTA itself, that the plaintiffs were entitled to discovery and that city laws banning sexual orientation discrimination ap-plied to the Transit Authority. Having failed in its attempt to avoid application of the city human rights law, the TA turned to the bargaining table and negotiated the benefits with the Transit Workers Union.

The attorney who represented the plaintiff in the earlier case, Thomas Shanahan, also represents Rios and Medina-Rios in the Staten Island case.

The question of applicability of city law in the earlier lawsuit was particularly crucial because that case was decided in late 2002 before the Legislature amended the state human rights law to forbid sexual orientation discrimination as a matter of state law. The TA had argued in that case that as a state entity it was immune from complying with the city law. Lippmann rejected that argument, and the agency evidently saw the writing on the wall.

The applicability of city law remained a very lively issue in this new case, however, which was filed in 2003, after the state law was passed. The reason for continued reliance on the city law is because the city law provides a legal theory important for this case that is not available under state law—disparate impact.

The state human rights law only forbids employer policies that directly discriminate based on the sexual orientation of an employee. By contrast, the city law goes further and forbids employer policies that have a “disparate impact” on the basis of employee sexual orientation, unless the employer has a “significant business justificat­ion” for its policy. The TA argues that its existing benefit policy does not discriminate based on sexual orientation, because unmarried heterosexual couples are also denied benefits. But the disparate impact against same-sex couples seems pretty clear.

While Minardo did not mention Lippman’s 2003 opinion in his ruling, he also rejected the defendants’ argument that they are immune from the city law, using the same theory that Lippmann had used, finding that a state public authority would only be immune if there were evidence that compliance with a city law would “interfere with the accomplishment of the public authority’s function and purpose. As such,” wrote Minardo, “the public authority defendants (the MTA and TA) will not be immunized by this court from complying with the Administrative Code provisions pertaining to employment discrimina­tion.”

However, that was just about the only important point that Rios won in Minardo’s ruling on the motion to dismiss the case. Minardo found a way to toss out all of her substantive claims, agreeing with the TA that there was no direct discrimination, thus no violation of the state law, and holding, without giving the plaintiffs any opportunity to conduct pre-trial discovery, that they had failed to present “substantial evidence” that would undermine the TA’s asserted “significant business reason” for refusing to provide health care for domestic partners.

According to Minardo, the TA argued that health benefits are employee benefits subject to collective bargaining, so they could not just extend the benefits to Rios and her partner in advance of negotiating about them with the Transit Workers Union, and they also contended that the cost of extending the benefits to Medina-Rios would be more than $5,750. The TA contended that saving money on health care was a legitimate business justification.

Minardo commented, in a footnote, “Since it would be clearly indefensible for defendants to provide additional coverage to plaintiffs without including all others similarly situated, the annual cost to SIRTOA would have to be considerably greater than the amount quoted, but any further estimate of its actual cost would only be speculative at this juncture.”

Minardo handed attorney Shanahan excellent grounds to appeal this ruling, which he has indicated that he will do. If, indeed, the actual cost of the benefits is only speculative, and the policy clearly has a disparate impact, there are significant factual questions to be resolved before this case can be decided on the merits. The plaintiffs are arguing that their eligibility for the benefits is a matter of civil rights, not merely employee benefits law, and cannot be held hostage to the requirement for union negotiations or decided solely as a matter of expenses.

If the TA maintained a benefits policy that violated bans against race or sex discrimination in order to save money, they could hardly defend against civil rights liability by arguing that they could not change the policy without collective bargaining, so why should they be able to make a similar claim in a sexual orientation discrimination case?

Indeed, the TA seems to be arguing in two different directions, on the one hand contending that the benefits are too expensive, on the other turning around and negotiating for such benefits with the union.

To some, this lawsuit may appear virtually moot, since the collective bargaining agreement will extend the benefits to Rios and her partner next year, but it is not moot because their claim, if valid, extends to coverage dating back to their first application after they filed their domestic partnership registration in October 2002, and they would be entitled to reimbursement for medical expenses that otherwise would have been covered.

As Minardo noted, the TA would be potentially liable for similar expenses suffered by similarly situated TA employees, so this is a live controversy with an indeterminate price tag.

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Updated 5:17 pm, July 20, 2018
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