Leibowitz v. Bank Leumi Trust Co.

152 A.D.2d 169, 548 N.Y.S.2d 513, 4 I.E.R. Cas. (BNA) 1786, 1989 N.Y. App. Div. LEXIS 15216
Appellate Division of the Supreme Court of the State of New York·Decided November 27, 1989·Published·Cited by 97 cases

Opinion

OPINION OF THE COURT

Balletta, J.

Does a complaint state a cause of action under Labor Law § 740, the so-called "Whistleblowers’ Statute”, in the absence of an allegation that the reported unlawful activity represented a "substantial and specific danger to the public health or safety”? The answer must be in the negative. [171] When deciding a motion to dismiss for failure to state a cause of action under CPLR 3211 (a) (7), "the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail” (Guggenheimer v Ginzburg, 43 NY2d 268, 275; see also, Foley v D’Agostino, 21 AD2d 60). All of the factual allegations of the complaint are to be assumed to be true (see, Tobin v Grossman, 24 NY2d 609, 612), and the complaint is to be interpreted in a fair and reasonable manner (see, Williams v Williams, 23 NY2d 592).

The plaintiff alleges that she commenced her employment with the defendant Bank Leumi Trust Company of New York (hereinafter Bank Leumi) in April 1981 as a junior collector in the collections department, and that the individual defendants Hahn and Hurley were her supervisors throughout the entire period of her employment. Although the plaintiff assertedly "had an outstanding work record” and "commanded the respect of her fellow workers and peers”, she alleges that she was "repeatedly denied promotions that others less qualified received”, owing to the fact that she is "a Jewish female”.*

Moreover, the complaint alleges, the plaintiff was the "only Jewish female in the department headed by” Hahn, and was frequently the subject of derogatory remarks, often being called a "Hebe” or a "kike”. Other alleged forms of "harassment” and "intimidation”, included (1) being told that "she would have to choose between her health or her job” when she could not work overtime one day due to a doctor’s appointment, (2) other employees being told not to talk to her, and (3) not being allowed a "personal day to go to the funeral of her closest friend” which caused her extreme distress. Also, when she became ill in February of 1986 due to food poisoning, Hahn and Hurley allegedly attempted to get her fired.

The plaintiff further alleges that during the course of her employment, she "had come upon some possible fraudulent activities, regarding a car dealership”, which she reported to her supervisors. However, Hahn allegedly told her not to report the incidents, saying that he would "look into it himself’, although he never did. Of the two incidents of suspected fraud alluded to by the plaintiff, one involved an automobile loan where documents showed different signatures for the [172] borrower, and the other involved a past due automobile loan where neither the vehicle nor the borrower could be traced.

In addition, the plaintiff alleges, she was asked by Hahn and Hurley not to report any repossessed vehicles on the monthly loan delinquency reports and not to debit the loan accounts since, they explained, the cars would eventually be resold anyway. This practice is purportedly illegal under New York State banking laws. The plaintiff claims that the defendants Hahn and Hurley were therefore "deriving some kind of personal benefit in their dealings with this car dealership, in detriment to the interests of bank leumi”. When the plaintiff refused to do as she was told, Hahn and Hurley began to harass her, and when she reported the bad loans to the auditing department and the harassment to the personnel director, nothing was done. Thus, the plaintiff alleges, she had no choice but to resign effective April 4, 1986.

The plaintiff commenced the instant action by the service of a summons and complaint some time in January 1987. The verified complaint set forth four causes of action. In her first cause of action under Labor Law § 740, the plaintiff claimed that she was forced to resign owing to the harassment of Hahn and Hurley in retaliation for her refusal to participate in the purportedly fraudulent activities. The second cause of action claimed a violation of the Human Rights Law (see, Executive Law § 296) which prohibits discrimination in employment on the basis of religion or sex in that she was denied promotions because she was Jewish and female. The third cause of action alleged that as a result of the defendants’ "harassment” she had "wrongfully been deprived of her employment”, and the fourth cause of action asserted "[t]hat the defendants [had] maliciously, wantonly and intentionally inflicted severe emotional harm on the plaintiff”.

The defendants timely moved pursuant to CPLR 3211 (a) (7) to dismiss the complaint for failure to state a cause of action. The plaintiff withdrew her second cause of action alleging sex and religious discrimination because those claims were pending before the New York State Division of Human Rights. The Supreme Court dismissed the remaining causes of action pursuant to CPLR 3211 (a) (7), finding that in their entirety those causes of action stated a claim to recover damages for wrongful discharge, which does not lie in New York for an at-will employee. The Supreme Court also found that the allegations of the complaint were insufficient to state a cause of action to recover damages for intentional infliction of emo[173] tional distress. The court found that the cause of action labeled as one sounding in "harassment” was in reality a component of the wrongful discharge and intentional infliction of emotional distress causes of action. Finally, the court found that the complaint failed to state a cause of action under Labor Law § 740, the so-called "Whistleblowers’ Statute”.

The plaintiff contends that she has stated an adequate cause of action under Labor Law § 740 in that the complaint alleges that she was forced to resign in retaliation for refusing to participate in the activities of Hahn and Hurley in connection with two automobile dealerships. She also contends that her allegations of being called a "Hebe” and a "kike”, of being told to choose between her health and her job, and of being told she could not use a paid personal day to attend the funeral of her "closest” friend, sufficiently support her causes of action to recover damages for harassment and intentional infliction of emotional distress.

We start our analysis with the long-standing and well-established rule in this State that if the employment is not for a definite term, and if there is no contractual or statutory restriction on the right to discharge, an employer may lawfully discharge an employee whenever and for whatever cause, without incurring liability for wrongful discharge (see, Martin v New York Life Ins. Co., 148 NY 117; see also, Sabetay v Sterling Drug, 69 NY2d 329, 333; Murphy v American Home Prods. Corp., 58 NY2d 293, 300; O’Connor v Eastman Kodak Co., 65 NY2d 724, 725). The Court of Appeals has reaffirmed this principle as recently as February of this year (see, Ingle v Glamore Motor Sales, 73 NY2d 183, 188).

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Leibowitz v. Bank Leumi Trust Co., 152 A.D.2d 169, 548 N.Y.S.2d 513, 4 I.E.R. Cas. (BNA) 1786, 1989 N.Y. App. Div. LEXIS 15216 (N.Y. Ct. App. 1989).

152 A.D.2d 169 (Leibowitz v. Bank Leumi Trust Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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