In the Matter of Carol
Aurecchione,
Appellant,
v.
New York State Division of Human
Rights, et al.,
Respondents.
2002 NY Int. 41
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
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
Aurecchione then brought this proceeding pursuant to Executive Law § 298, to challenge the Commissioner's denial of pre-determination 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 2 543 [2d Dept 2001]). We granted leave to appeal and now reverse.
The Human Rights Law, Executive Law Article 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
In Loeffler v Frank (486 US 549, 557-558 [1988]), the
United States Supreme Court, in the context of a Title VII claim,
characterized predetermination interest as an essential
accompaniment to back pay awards. The Court noted that the "back
pay 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 Ultramar Corp., 214 F3d
371 [2d Cir 2000]; Gierlinger v Gleason, 160 F3d 858 [2d Cir
1998]; Saulpaugh v Monroe Community Hospital, 4F3d 134 [2d Cir
Although the Human Rights Law, like Title VII, makes no specific reference to pre-determination interest, a liberal reading of the statue is explicitly mandated to effectuate the statute's intent (Executive Law § 300; 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 Property Development Associates, , 96 NY2d 577 [2001]; Lawyers' Fund for Client Protection of State of NY v Bank Leumi Trust Co. of NY, , 94 NY2d 398, 407 [2000]; Prager v New Jersey Fidelity and Plate Glass Ins. Co. of Newark, N.J., 245 NY 1, 5-6 [1927]). Pre-determination 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
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
We reject petitioner's argument, however, that pre- determination 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 New York City Transit Authority v State Division of Human Rights, , 78 NY2d 207, 219 [1991]).
Finally, we urge the Division to complete its interest calculation within 30 days (see 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.