Mehtani v. New York Life InsuranceMehtani v. New York Life Insurance
OPINION OF THE COURT
Section 296 (13) of the Executive Law, commonly referred to as the "Arab Boycott Law”, does not apply to the cancellation of an employment contract or the discharge of an employеe where the alleged act of discrimination did not occur in the course of an organized boycott or blacklisting.
In August 1982, plaintiffs-respondents, Satish Mehtani and Sneh Mehtani, his wife, commenced the above-cаptioned action No. 1 against defendants-appellants, New York Life Insurance Company (New York Life) and its senior vice-president in charge of marketing, Lee Buck, and defendants "John Doe” and "Richard Roe”, investigators assigned to Buck’s department. The original verified complaint stated two causes of action, the first alleging that Satish had been wrongfully
Following a decision rendered by the Court of Appeals on March 29, 1983, holding that, "This court has not and does not now recognize a cause of aсtion in tort for abusive or wrongful discharge of an employee” (Murphy v American Home Prods. Corp.,
At about the time that this meeting took place, the circumstances under which Satish had sold a life insurance policy to a woman who died six months thereafter were under investigation. As a result of that investigation, New York Life commenced an action in July 1982, designated herein as action No. 2, against Satish and a medical doctor, Sarup Sharma, alleging that they had conspired to fraudulently obtain the policy without a medical examination for the woman, who had a serious heart condition. The two lawsuits were subsequently consolidated as above captioned.
In denying defendants-appellants’ motion for summary judgment dismissing Satish and Sneh Mehtani’s complaint, Special Term held that there existed a question of fact as to whether Satish was an independent contractor or an employee, an issue bearing on the applicability of Executive Law § 296 (1) (a). The court further held that even if Satish were found to be an independent contractor and thus ineligible for relief
We first address the issue of whether there exists a genuine question of fact rеgarding Satish’s status with New York Life. It is undisputed that the proscription against unlawful discriminatory practices contained in Executive Law § 296 (1) (a) applies solely to employees and not to independent contractors. The statute provides as follows:
"1. It shall be an unlawful discriminatory practice:
"(a) For an employer or licensing agency, because of the age, race, creed, color, national origin, sex, or disability, or marital status of any individual, to refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment.”
Satish’s association with New York Life commenced on July 1, 1971, when the parties entered into an Apprentice Field Underwriter’s Agreement for an initial two-year period. This contract, which authorized Satish to solicit applications for insurance policies on behalf of New York Life, and outlined the terms and conditions upon which he would do so, contained the following provision: "Neither the term 'Field Underwriter’ * * * nor anything contained herein оr in any of the rules or regulations of [New York Life] shall be construed as creating the relationship of employer and employee between [New York Life] and the Field Underwriter. Subject to the provisions hereof and within the scope of the authority hereby granted, the Field Underwriter, as an independent contractor, shall be free to exercise his discretion and judgment with respect to the persons from whom he will solicit applications, and with respect to the time, place, method and manner of solicitation and of performance hereunder.”
At the expiration of the initial period, Satish continued his work аs a field underwriter, with his compensation consisting solely of commissions. Consistent with the practice utilized for independent contractors, New York Life did not deduct any withholding taxes from these commissions. Other indicia оf independent contractor status were Satish’s hiring of a secretary whose salary was paid by Satish, not New York Life,
, Satish’s assertions to the contrary fail to establish any genuine issues of fact and, аt best, are suggestive solely of "incidental control” which by itself is legally insufficient to constitute an employer-employee relationship. (Matter of Ted Is Back Corp. [Roberts],
Satish further claims that he may seek redress for the alleged acts of discrimination under Executive Law § 296 (13). This statute was enacted in 1975, in part "to curb the discriminаtory business practices of corporations which resulted from the pressures of foreign governments, including the Arab boycott of Jewish businesses and individuals”. (Holly v Pennysaver Corp.,
"It shall be an unlawful discriminatory practice (i) for any persоn to discriminate against, boycott or blacklist, or to refuse to buy from, sell to or trade with, any person, because of the race, creed, color, national origin or sex of such person, or of such person’s partners, members, stockholders, directors, officers, managers, superintendents, agents, employees, business associates, suppliers or customers, or (ii) for any person wilfully to do any act or rеfrain from doing any act which enables any such person to take such action. This subdivision shall not apply to:
"(a) Boycotts connected with labor disputes; or
"(b) Boycotts to protest unlawful discriminatory practices.”
In the 13 years since its enactment, Executivе Law § 296 (13) had never been applied in any case not involving collective action or action aimed at a particular group, until the decision appealed herein. As summarized in General Elec. Co.
In a memorandum of approval, dated August 4, 1975, Governor Hugh Carey observed: "This bill prohibits commercial boycotts and blacklisting”. (1975 McKinney’s Session Laws of NY, at 1765.)
In light of the clear legislative intent underlying Executive Law § 296 (13), we must reject Satish’s contention that this statute is applicable to a cancellation of contract or wrongful discharge from employment that is unaccompaniеd by any form of blacklisting or commercial boycott. So expansive a reading of the statute is neither supported by its legislative history nor its terms.
Finally, we note that Sneh’s cause of action for loss of consortium is a derivative one which must fall with the dismissal of Satish’s claims (Liff v Schildkrout,
Murphy, P. J., Sullivan and Carro, JJ., concur.
Order, Supreme Court, New York County, entered on June 14, 1988, unanimously reversed, on the law, the motion granted, and the complaint dismissed in its entirety, without costs and without disbursements.