651 F.Supp.3d 695
S.D.N.Y.2023Background
- Plaintiffs Lori Gardner-Alfred and Jeanette Diaz were long‑time employees of the Federal Reserve Bank of New York (FRBNY) who refused COVID‑19 vaccination on religious grounds and requested religious accommodations.
- FRBNY’s Vaccination Policy (Aug. 2, 2021) allowed religious exemptions after a formal request and interview; Plaintiffs’ requests were temporarily granted but later rescinded citing return‑to‑office, interaction with visitors, and essential on‑site job functions.
- Plaintiffs remained unvaccinated and were terminated March 14, 2022. They sued under RFRA, the Free Exercise Clause, Title VII, the New York State Human Rights Law (NYSHRL), and the New York City Human Rights Law (NYCHRL).
- FRBNY moved to dismiss, arguing (among other things) that Title VII preempts RFRA/Free Exercise claims and that the FRA’s "dismiss at pleasure" power preempts state and city anti‑discrimination laws.
- The Court denied dismissal of RFRA, Free Exercise, and Title VII claims, but granted dismissal of NYSHRL and NYCHRL claims as preempted by federal law given the FRBNY’s federal‑instrumentality status and the FRA’s dismissal‑at‑pleasure grant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Title VII preempts RFRA and Free Exercise claims for employment discrimination against the FRBNY | RFRA and Free Exercise remain available; FRBNY was subject to Title VII under the 1964 Act (not §717), so Brown‑type exclusivity does not apply | Title VII is the exclusive remedy for federal employment discrimination and thus preempts RFRA/Free Exercise claims | Court: Title VII does not preempt RFRA or Free Exercise claims here; plaintiffs may pursue both (Title VII coverage under 1964 Act distinguishes this case from §717 entities) |
| Whether RFRA and the First Amendment Free Exercise Clause apply to the FRBNY | FRBNY is a federal instrumentality and thus subject to RFRA and the Free Exercise Clause | FRBNY contends not all instrumentalities fall within RFRA/First Amendment and questions application | Court: FRBNY is a federal instrumentality under existing tests (including Lebron factors) and RFRA/Free Exercise apply; defendant’s new Smith‑based reply argument not considered now |
| Whether NYSHRL and NYCHRL are preempted by federal law (FRA §341(d)(5) / dismissal at pleasure) | State/city anti‑discrimination laws of general applicability should apply; any conflict should be limited to the extent laws exceed Title VII | FRA’s dismissal‑at‑pleasure power would be curtailed by state/city laws; application would create a patchwork undermining federal uniformity and is preempted | Court: NYSHRL and NYCHRL are preempted in full because they would condition or control a power granted by federal law (dismiss at pleasure) and aggregated local regulation would threaten federal grant |
| Whether Title VII religious‑accommodation allegations are sufficiently pled (bona fide belief, nexus to vaccine refusal) | Plaintiffs plead sincerely held, religious beliefs (Temple of Healing Spirit; Catholic objections) and nexus between beliefs and refusal to vaccinate | FRBNY argues beliefs insufficiently religious or not shown to conflict with the policy | Court: Complaint adequately alleges bona fide religious beliefs and a nexus to vaccine refusal; sincerity is a fact question for later stages |
Key Cases Cited
- Brown v. Gen. Servs. Admin., 425 U.S. 820 (1976) (held §717 provides exclusive remedy for federal employees covered by that provision)
- Cantero v. Bank of Am., N.A., 49 F.4th 121 (2d Cir. 2022) (federal grants of power to banks preempt state laws that "control" those powers; presumption against preemption diminished for federally chartered banks)
- Lebron v. Nat'l R.R. Passenger Corp., 513 U.S. 374 (1995) (two‑part test for when a congressionally created corporation is subject to constitutional constraints)
- Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014) (RFRA’s scope and application in protecting religious exercise)
- City of Boerne v. Flores, 521 U.S. 507 (1997) (limits on congressional power under Fourteenth Amendment and RFRA’s application to states)
- Johnson v. Railway Express Agency, Inc., 421 U.S. 454 (1975) (Title VII does not preclude pursuit of other federal or state remedies outside §717 context)
- Thomas v. Rev. Bd. of Ind. Emp. Sec. Div., 450 U.S. 707 (1981) (framework for determining whether beliefs are religious and entitled to protection)
- Starr Int’l Co. v. Fed. Reserve Bank of N.Y., 742 F.3d 37 (2d Cir. 2014) (Federal Reserve Banks perform important governmental functions and are federal instrumentalities)
- Fasano v. Fed. Reserve Bank of N.Y., 457 F.3d 274 (3d Cir. 2006) (discusses preemption approaches to FRA dismissal‑at‑pleasure clause)