Farah v. Emirates

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

KAYENAT FARAH, JOSEPH

CAMMARATA, CHARLOTTE

ARMSTRONG, and VIOLET SIMPSON, on

behalf of themselves and all others similarly

situated,

Plaintiffs, 21-CV-05786-LTS

-against-

EMIRATES and EMIRATES SEVERANCE

PLAN,

Defendants.

MEMORANDUM ORDER

Kayenat Farah, Joseph Cammarata, Charlotte Armstrong, and Violet Simpson

(collectively, “Plaintiffs”) bring this putative class action on behalf of all those similarly situated

against Emirates Airlines (“Emirates”) and Emirates Severance Plan (“the Plan”) (together,

“Defendants”), asserting claims predicated on alleged violations of the Employee Retirement

Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., the New York State Worker

Adjustment and Retraining Notification Act (“NY WARN”), N.Y. LAB. LAW § 860 et seq., Title

VII of the Civil Rights Act of 1965, 42 U.S.C. § 2000 et seq., the New York State Human Rights

Law (“NYSHRL”), N.Y. EXEC. LAW § 296 et seq., and the New York City Human Rights Law

(“NYCHRL”), N.Y.C. ADMIN. CODE § 8-107 et seq. (Docket entry no. 38 (the “Amended

Complaint” or “AC”).) The Court has jurisdiction of this action pursuant to 28 U.S.C. sections

1331 and 1367.

The case is before the Court on Defendants’ Motion to Dismiss counts 1-10 of the

Amended Complaint for failure to state a claim upon which relief may be granted, pursuant to

Federal Rule of Civil Procedure 12(b)(6),1 as well as the Defendants’ motion to strike Plaintiffs’

jury demand pursuant to Federal Rule of Civil Procedure 39(a)(2). (Docket entry no. 42

(“MTD”).) The Court has carefully considered the submissions of both parties and, for the

following reasons, Defendants’ motions are denied in their entirety.

BACKGROUND

Unless otherwise indicated, the following allegations are taken from the Amended

Complaint, all well-pleaded factual content of which is presumed true for purposes of this

motion practice.2

Plaintiffs in this action are former employees of Emirates who were furloughed on

April 15, 2020, and later laid off during the summer of 2020. (AC ¶¶ 17-20.) Plaintiffs are each

United States citizens living in the State of New York. (Id.) Farah, Armstrong, and Simpson

(hereafter, the “City Employees”) were three of approximately sixty employees working in

Emirates’ New York office located at 55 East 59th St., New York, New York in March 2020. (Id.

¶¶ 17, 19, 20.) Cammarata was one of approximately forty-three total employees working at

Emirates’ Call Center location in Nassau County, New York in March 2020. (Id. ¶¶ 18, 99.) On

or about April 15, 2020, Plaintiffs received a notice letter informing them that they were being

placed on unpaid furlough. (Id. ¶ 77.) The notice explained, inter alia, that furloughs were

1 Defendants do not move to dismiss counts 11-13 of the AC, which assert the Plaintiffs’

individual retaliation claims under Title VII, NYSHRL, and NYCHRL, respectively.

(See AC ¶¶ 265-80.)

2 The Court has also considered factual matter drawn from documents which are integral

to, attached to, or incorporated by reference in the Amended Complaint. See DeLuca v.

AccessIT Grp., Inc., 695 F. Supp. 2d 54, 60 (S.D.N.Y. 2010) (“[E]xtrinsic documents may

be considered as part of the pleadings if they are (1) attached to the complaint; (2)

incorporated into the complaint by reference; or (3) integral to the complaint.”).

necessary because of COVID-19 and “its drastic impact on our industry.” (Id. ¶¶ 78-82; see also

docket entry no. 44-5 (“Furlough Letter”).) The notice stated that the furlough “may last several

months, and could last up to six months,” that Emirates would keep the situation “constantly

under review,” and that Emirates would notify furloughed employees of any changes. (AC

¶¶ 80, 82.) All Plaintiffs began their furlough in April 2020. (Id. ¶ 77.) While on furlough,

Plaintiffs were prohibited from performing any work for Emirates. (Id. ¶ 118; Furlough Letter.)

Cammarata was notified that his employment was permanently terminated on

June 24, 2020. (Id. ¶ 18; see also docket entry no. 44-6 (“Termination Letter”).) Emirates

terminated forty-two out of forty-three Call Center employees, including Cammarata, on or

around June 24, 2020. (AC ¶¶ 99, 208, 209.) On July 1, 2020, Emirates permanently terminated

fifteen employees from the City Office, including Farah, Armstrong and Simpson. (Id. ¶¶ 17, 19,

20, 116.) On or about October 2020, Emirates terminated an additional twenty-five employees

from the City Office. (Id. ¶ 209.)

Following their terminations, each Plaintiff, through counsel, submitted a claim

for benefits under the Plan, and each was denied any severance payment. (Id. ¶ 65.) Cammarata

was separately informed by Jennifer Jackson, the Human Resources (“HR”) Business Partner,

that “there is no severance payment with this redundancy.” (Id. ¶ 63.) Plaintiffs plead, upon

information and belief, that Emirates had paid qualified terminated employees benefits under the

Plan in 2016 and prior years, including redundancy pay accrued per year of service as well as

three months of extended health insurance with employer premium contributions. (Id. ¶ 50.)

Emirates maintained the Plan documents in its New York HR office and provided these

documents only to HR employees and managers, who were instructed to keep the information

confidential. (Id. ¶¶ 34-37.) Plaintiffs were not given access to any review procedures available

under the Plan. (Id. ¶ 66.) Emirates did not respond to Plaintiffs’ October 19, 2020, requests for

copies of the governing Plan documents. (Id. ¶¶ 67-68.)

Plaintiffs further assert that, during their employment at Emirates, they were

discriminated against on the basis of their national origin, specifically because they were or were

perceived to be American, and that discrimination caused their ultimate termination. (Id. ¶¶ 6-7.)

Plaintiffs also allege that Emirates denied them severance and other benefits that were paid to

similarly situated non-American employees and former employees (id. ¶ 148), and failed or

refused to take reasonable steps to prevent and correct instances of discrimination against

American employees (id. ¶¶ 146-48). Plaintiffs allege that Emirates’ head of Human Resources

in the United States stated on multiple occasions that she preferred non-American workers (id.

¶ 132), and that the Call Center should be closed because it was staffed by American workers

who “complained too much and felt entitled” (id. ¶¶ 52, 133). According to Plaintiffs, Emirates

also maintained a different wage scale for American workers, UAE nationals, and other non-

American workers brought from overseas to work in the United States (id. ¶ 143), provided only

non-American workers with travel benefits for one year or more following a termination of

employment (id. ¶ 144), and otherwise maintained policies that favored hiring and promoting

non-American nationals (id. ¶¶ 134, 145).

DISCUSSION

To survive a motion to dismiss, a complaint must plead “enough facts to state a

claim to relief that is plausible on its face,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007), and “allow[] the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). In deciding a Rule 12(b)(6)

motion to dismiss, the Court must “draw all reasonable inferences in [p]laintiff’s favor, assume

all well-pleaded factual allegations to be true, and determine whether they plausibly give rise to

an entitlement to relief.” Faber v. Metro. Life Ins. Co., 648 F.3d 98, 104 (2d Cir. 2011) (internal

quotation marks omitted). “In adjudicating a motion to dismiss, a court may consider only the

complaint, any written instrument attached to the complaint as an exhibit, any statements or

documents incorporated in it by reference, and any document upon which the complaint heavily

relies.” In re Thelen LLP, 736 F.3d 213, 219 (2d Cir. 2013), certified question accepted sub nom.

Thelen LLP v. Seyfarth Shaw LLP, 22 N.Y.3d 1017 (2013), and certified question answered, 24

N.Y.3d 16 (2014) (citing Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002)).

ERISA Claims

Counts 1-3 of the Amended Complaint assert various causes of action under the

ERISA premised on Defendants’ denial of severance benefits to all Plaintiffs. Plaintiffs assert

claims to recover benefits under the terms of the Plan, 29 U.S.C § 1132(a)(1)(B); for breach of

the fiduciary duties of prudence and loyalty, id. § 1132(a)(3); and for Defendants’ violation of

statutory filing requirements and failure to furnish information to plan participants upon written

request, id. § 1132(c)(1)(A). The threshold issue for all three ERISA claims is whether Plaintiffs

plausibly allege the existence of an ERISA-governed “employee welfare benefit plan.” See 29

U.S.C. § 1002(1), (2)(A). To determine whether a severance plan qualifies as an ERISA-

governed plan, courts employ a three-factor test which considers: (1) “whether the employer's

undertaking or obligation requires managerial discretion in its administration,” (2) “whether a

reasonable employee would perceive an ongoing commitment by the employer to provide

employee benefits,” and (3) “whether the employer was required to analyze the circumstances of

each employee’s termination separately in light of certain criteria.” Schonholz v. Long Island

Jewish Med. Ctr., 87 F.3d 72, 76 (2d Cir. 1996) (internal quotations and citations omitted). No

single factor is determinative. Id.

Plaintiffs assert that Emirates maintained an ERISA-governed severance plan,

which provided benefits to employees who were found to qualify under set criteria. (AC ¶¶ 3-4.)

The Plan provided a lump sum severance payment, calculated based on years of service, and a

three-month extension of employer-provided health insurance with Emirates covering 90% of

employee healthcare premiums. (Id. ¶¶ 41-42, Ex. A.) The Plan was administered by Emirates

and funded by Emirates’ operating assets. (Id. ¶ 43.) To determine if an employee was eligible,

Emirates had to evaluate whether the employee’s termination was for “just cause” or a change in

business structure, and whether the employee complied with administrative and performance

requirements during the notice period; each individual employee’s benefits had to be evaluated

and approved by the Senior Vice President (“SVP”) of Human Resources and the SVP of

Business under these considerations. (Id. ¶ 44.) The governing Plan terms were documented in

the “US Pay and Allowance Manual,” which was stored in a two-ring binder in the New York

HR Office, as well as in electronic format. (Id. ¶¶ 35-36.) Copies of the Plan were provided to

HR employees and managers, who were instructed to keep the Plan contents secret from other

employees. (Id. ¶¶ 37-38.) Through her role in HR, Farah knew about and was trained to apply

the Plan to each proposed termination. (Id. ¶ 49.) Employees terminated in 2016 received the

benefits promised under the terms of the Plan. (Id. ¶ 50.)

Applying these allegations to the Schonholz factors yields ambiguous results. On

the first factor, Defendants have argued persuasively that the calculation of benefits under the

Plan constitutes “simple arithmetic” and not the sort of managerial discretion or administration

that supports the existence of an ERISA-governed plan. See Taverna v. Credit Suisse First

Boston (USA), Inc., No. 02-CV-5240-DC, 2003 WL 255250, at * 10 (S.D.N.Y. Feb. 4, 2003).

Additionally, although the Plan provides for an extension of employer-contribution to healthcare

premiums, the administrative burden of such benefits is minimal and likewise fails to provide

compelling evidence of an ERISA plan.

To evaluate the second Schonholz factor, the Second Circuit has enumerated

certain considerations to determine whether a reasonable employee would perceive an “ongoing

commitment by the employer” to provide benefits. Courts should consider, among other things,

“(1) whether the plan is ‘subject to termination or amendment’ by the employer, [and] (2)

whether the employer or the employee has ongoing responsibilities under the agreements.”

Kuhbier v. McCartney, Verrino & Rosenberry Vested Prod. Plan, 239 F. Supp. 3d 710, 731

(S.D.N.Y. 2017) (internal citations omitted). First, the purported US Pay and Allowance Manual

excerpt that is annexed to the Complaint does not address the terminability of the Plan. Plaintiffs

have plead that they lack access to information regarding the terms of the Plan because of the

Defendants’ purposeful concealment of Plan documents during Plaintiff’s employment and their

refusal to furnish those documents to counsel upon request. (AC ¶¶ 38, 67.)

Plaintiffs have also alleged that Emirates has demonstrated an ongoing

commitment to providing the Plan’s benefits to employees over many years. Cf. James v.

Fleet/Norstar Fin. Grp., Inc., 992 F.2d 463, 468 (2d Cir. 1993) (finding no ERISA-governed plan,

in part, because the promised severance payments were to be disbursed in a single, lump sum

amount conditioned on a single event occurring at a definite time in the near future). Emirates

employees terminated in 2016 received benefits under the Plan, and HR employees and

managers were informed of the Plan and were trained to apply the Plan consistently to new

terminations. (AC ¶¶ 48-51.) Defendants unpersuasively argue that a “reasonable employee”

would not have expected to benefit from the Plan because the terms of the Plan were not

disseminated. (Def. Mem. at 17 (citing Hayles v. Adv. Travel Mgmt. Corp., No. 01-CV-10017-

BSJ-DFE, 2004 WL 26548, at *8 (S.D.N.Y. Jan. 5, 2004) (finding, on a motion for summary

judgment, no ERISA-governed plan, in part, because the alleged Plan was unwritten and,

accordingly, there was no showing that the employer “published or publicized any policy

indicating that it normally pays out severance benefits”)).) Unlike in Hayles, Plaintiffs allege

that Emirates maintained a written Severance Policy (AC ¶¶ 32-36), disseminated the written

policy to HR employees and managers (id. ¶ 37), and trained HR employees to apply the Plan to

terminated employees (id. ¶ 49). Read in the light most favorable to their claim, these

allegations weigh in favor of finding that a reasonable employee would have perceived a

commitment on Emirates’ behalf to providing benefits.

However, actual benefits provided under the Plan — the lump sum payment and

short extension of health insurance premium contributions — are not the sort of “ongoing

commitment” to post-employment engagement that weighs in favor of an ERISA-governed plan.

See Sheer v. Israel Discount Bank of N.Y., No. 06-CV-4995-PAC, 2007 WL 700822, at *2

(S.D.N.Y. Mar. 7, 2007) (finding no “ongoing commitment” where neither the employer nor the

employee had ongoing responsibilities after the “employee receives her severance payment and

leaves the company”); cf. Tischman v. ITT/Sheraton Corp., 145 F.3d 561, 567 (2d Cir. 1998)

(finding an ERISA-governed plan, in part, due to the employee’s ongoing responsibility, even

after termination, to “be available” to render services to the company under “reasonable

circumstances”). Therefore, the structure of the benefit payments does not weigh clearly for or

against a determination that the Plan is an ERISA-governed plan, and the second Schonholz

factor yields ambiguous results.

The final Schonholz factor asks whether the employer had to evaluate each

employee individually to determine who qualified for benefits under the Plan. Plaintiffs allege

that Emirates had to evaluate whether employees were terminated for cause, whether the

employee continued to perform satisfactorily during the notice period, and whether the employee

met certain administrative requirements, such as signing necessary forms. (AC ¶¶ 39-40, 44.)

All benefits for each individual employee had to be “evaluated and approved” by Emirates’ SVP

of HR and the SVP of Business. (Id. ¶ 44.) While these determinations do require the exercise

of some discretion, courts have not always found these determinations to be “the type of

managerial discretion contemplated by ERISA.” Sheer, 2007 WL 700822, at *3; compare Okun

v. Montefiore Med. Ctr., 793 F.3d 277, 280 (2d Cir. 2015) (finding a plan required “discretion

and individualized evaluation to administer” where the employer had to determine if termination

was voluntary or for cause, and there could be a discretionary review of the amount owed to

senior employees), and Simas v. Quaker Fabric Corp. of Fall River, 6 F.3d 849, 853 (1st Cir.

1993) (“The ‘for cause’ determination, in particular, is likely to provoke controversy and call for

judgments based on information well beyond the employee’s date of hiring and termination.”),

with Taverna, 2003 WL 255250, at *3 (finding no ERISA plan where the employer had to

exercise “minimal quantum of discretion” to determine if employees had to continue satisfactory

job performance between notice and termination). Once again, this factor yields ambiguous

results.

Viewing the allegations and drawing all reasonable inferences in favor of the

Plaintiffs — and accounting for the limited information available to them without the benefit of

discovery — the Court concludes that the allegations could support an inference that the

Severance Plan was an ERISA-governed plan. Therefore, the Court finds that Plaintiffs have

adequately plead claims for relief under ERISA for denial of benefits, breach of fiduciary duty,

and failure to furnish plan information upon written request. Defendants’ motion to dismiss

counts 1-3 of the Amended Complaint is, accordingly, denied.

Discrimination Claims

Counts 5-10 of the Amended Complaint assert employment discrimination claims

for both intentional discrimination and disparate impact discrimination under Title VII,

NYSHRL, and NYCHRL, respectively.

Intentional Discrimination

Intentional discrimination claims brought under Title VII are subject to the

McDonnell-Douglas burden shifting framework. McDonnell Douglas Corp. v. Green, 411 U.S.

792, 801 (1973). The NYCHRL imposes a more liberal pleading standard; Plaintiffs are only

required to plead sufficient information to show they have a “plausible case” for discrimination.

Ya-Chen Chen v. City Univ. of N.Y., 805 F.3d 59, 75 (2d Cir. 2015). Intentional discrimination

claims accrued prior to the August 12, 2019, amendment of the NYSHRL should be analyzed

under the same standard as claims brought under Title VII. Tolbert v. Smith, 730 F.3d 427, 438-

39 (2d Cir. 2015). NYSHRL discrimination claims accrued after August 12, 2019, must be

construed “liberally for the accomplishment of the remedial purpose of [the law]” and should

now be interpreted as “rendering a standard for claims closer to the standard of the NYCHRL.”

Cooper v. Franklin Templeton Invs., No. 22-2763-CV, 2023 WL 3882977, at *3 (2d Cir. June 8,

2023) (citing N.Y. EXEC. LAW § 300); see also Baptiste v. City Univ. of N.Y., No. 22-CV-2785-

JMF, 2023 WL 4266914, at *3 n.1 (S.D.N.Y. June 29, 2023). Given that Title VII has stricter

pleading requirements than either the State or City laws, if Plaintiffs adequately state a claim

under Title VII, they necessarily state a claim under both NYSHRL and NYCHRL.

To plead a prima facie case of intentional discrimination under Title VII, Plaintiffs

must plausibly allege: (1) they are members of a protected class, (2) they were qualified for the

position held, (3) they suffered an adverse employment action, and (4) that adverse action

occurred under circumstances giving rise to an inference of discrimination. Brown v. Daikin

Am. Inc., 756 F.3d 219, 229 (2d Cir. 2014) (citing Windham v. Time Warner, Inc., 275 F.3d 179,

187 (2d Cir. 2001)). Plaintiffs allege that they are a protected class because their national origin

is American. (AC ¶ 6; see also Goyette v. DCA Advert., Inc., 828 F. Supp. 227, 232-33

(S.D.N.Y. 1993) (“There is no dispute that the plaintiffs, as person of American national origin,

benefit from the protection of Title VII.”).) Next, Plaintiffs allege that they were well-qualified

for their respective positions, in which each had worked for several years before termination and

for which their performance was regularly deemed satisfactory. (AC ¶¶ 125, 138.) Plaintiffs

have also alleged that they suffered various adverse employment actions including the denial of

benefits (id. ¶ 222), lower pay (id.), and ultimately, termination (id. ¶ 135).

Finally, Plaintiffs have alleged facts sufficient to find that these actions occurred

under circumstances giving rise to an inference of impermissible discriminatory motivation. See

Littlejohn v. City of N.Y., 795 F.3d 297, 310-11 (2d Cir. 2015) (“[A]t the initial stage of the

litigation—prior to the employer’s coming forward with the claimed reason for its action—the

plaintiff does not need substantial evidence of discriminatory intent. . . . [She need only satisfy] a

minimal burden of showing facts suggesting an inference of discriminatory motivation[.]”

(emphasis in original)). Plaintiffs allege, inter alia, that one high-ranking Emirates employee

stated that she preferred non-American workers and that the Call Center — which was

effectively closed in June 2020 — should be closed because American workers complained too

much and felt entitled. (AC ¶¶ 132-33.) They also allege that Emirates did not terminate and

refuse severance benefits to any non-American workers in the United States during the pandemic

layoffs, yet all American workers fired during that time were denied those benefits. (Id. ¶¶ 139-

41.) Emirates also allegedly provided non-American workers travel benefits that were not

offered to American workers, and “at nearly all levels” paid American workers lower salaries

than non-American workers in the United States. (Id. ¶¶ 143-45.) These allegations satisfy

Plaintiffs’ minimal burden at the pleading stage. Littlejohn, 795 F.3d at 308-309.

Defendants argue that Plaintiffs have failed to state an intentional discrimination

claim under Title VII or NYSHRL because any discriminatory acts alleged were based on

Plaintiffs’ American citizenship rather than their national origin, and citizenship is not a

protected category under Title VII or NYSHRL for claims brought during the relevant period.3

(Def. Mem. at 19; see also Espinoza v. Farah Mfg. Co., 414 U.S. 86, 95 (1973) (“[N]othing in

the Act makes it illegal to discriminate on the basis of citizenship or alienage.”).) Plaintiffs have

adequately alleged discriminatory comments attributing negative characteristics to “Americans”

and treatment that — when read in the light most favorable to their claim — plausibly suggest

discrimination on the basis of their American origin. See Goyette, 828 F. Supp. at 234-35

(finding, on a motion for summary judgment, sufficient evidence to support an inference of

national origin discrimination, which included managers’ statements disparaging American

workers and favoring Japanese workers as well as the denial of benefits to American workers).

3 Defendants concede that citizenship is a protected category for claims brought under the

NYCHRL during the relevant period. (Def. Mem. at 19.)

To the extent that Defendants contend the discrimination was rooted in Plaintiffs’ citizenship,

Plaintiffs are entitled to the opportunity to respond to that explanation, and to show that it may be

pretextual, at later stages in litigation. Littlejohn, 795 F.3d at 307. Any determinations on the

validity of Plaintiffs’ prima facie case based on Defendants’ nondiscriminatory explanation

would be premature at this stage.

Therefore, the Court finds Plaintiffs have adequately stated a claim for intentional

discrimination under Title VII, and thus also state a claim under the more lenient standards of

NYSHRL, and NYCHRL with respect to the City Office employees. Defendants’ motion to

dismiss counts 5, 7 and 9 of the Amended Complaint is accordingly denied.

Disparate Impact

A prima facie case for disparate impact discrimination under Title VII must: “(1)

identify the specific employment practice or policy; (2) demonstrate that a disparity exists; and

(3) establish a causal relationship between the two.” Mandala v. NTT Data, Inc., 975 F.3d 202,

207-208 (2d Cir. 2020) (citation omitted). Disparate impact discrimination does not require a

Plaintiff to show that Defendants had the intent to discriminate against the impacted group. Id.

For NYCHRL claims, and NYSHRL accrued after August 12, 2019, Plaintiffs’ prima facie case

consists of the same three requirements, but the claims are to be “construed more liberally than

their counterparts under Title VII and the previous version of the NYSHRL.” Syeed v.

Bloomberg L.P., No. 20-CV-7464-GHW, 2022 WL 3447987, at *11 (S.D.N.Y. Aug. 17, 2022)

(internal quotations and citations omitted). Again, if Plaintiffs state a claim under Title VII, they

also state a claim under the more liberal pleading standards of NYSHRL and NYCHRL.

Plaintiffs allege that Emirates instituted “company-wide policies, patterns and/or

practices determining compensation and eligibility for promotion based on national origin[.]”

(AC ¶ 229.) They allege that Emirates instituted different wage scales for American and non-

American workers and “at nearly all levels” paid Americans less well than non-Americans. (Id.

¶ 145.) Emirates also purportedly maintained policies that favored hiring of non-American

workers over American workers and, since 2016, has been “replacing American workers in

upper management positions in the United States with United Arab Emirates nationals or other

non-American workers.” (Id. ¶¶ 134, 146.) As a direct result of these discriminatory policies

and practices, Plaintiffs have suffered damages including lost income, compensation, and

benefits. (Id. ¶¶ 230, 247, 263.) These allegations satisfy Plaintiffs’ burden at the pleading

stage. See Jenkins v. N.Y.C. Trans. Auth., 646 F. Supp. 2d 464, 469-70 (S.D.N.Y. 2009)

(finding, at the pleading stage for a disparate impact claim, a plaintiff need not provide statistical

evidence of discrimination but must identify a specific employment practice to “give the

defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests”

(quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002))).

The Court finds that Plaintiffs have adequately plead a claim for relief for

disparate impact discrimination under Title VII, NYSHRL and, with respect to the City Office

employees, NYCHRL. Defendants’ counterarguments that they did not, in fact, maintain the

alleged policies are premature at this stage. (See Def. Mem. at 23-24.) Therefore, Defendants’

motion to dismiss counts 6, 8, and 10 of the Amended Complaint is denied.

NY WARN Claim

The NY WARN Act provides that “[a]n employer who fails to give notice as

required by [the Act] before ordering a mass layoff, relocation, or employment loss is liable to an

employee entitled to receive notice who lost his or her employment.” N.Y. LAB. LAW § 860-g.

To state a claim for relief under NY WARN, Plaintiffs must allege facts showing, within the

meaning of the statute, that: (1) Defendant is an “employer,” (2) Plaintiffs are “affected

employees,” (3) a “mass layoff” occurred, and (4) Defendant failed to give ninety-days’ notice.

See N.Y.’s Health & Hum. Serv. Emps. Union 1199/SEIU, AFL-CIO v. Grossman, No. 02-CV-

6031-SLT-JMA, 2007 WL 2907386, at *18-19 (E.D.N.Y. Oct. 3, 2007). Defendants do not

dispute that Emirates is an “employer” and Plaintiffs are “affected employees” within the

meaning of the NY WARN Act. (See Def. Mem.) Defendants dispute, however, whether the

factual allegations of the Complaint plausibly establish that the terminations of the City Office

employees were a “mass layoff,” and whether Emirates gave sufficient notice under the

circumstances. (Id. at 8-15.)

Mass Layoff

A “mass layoff” is defined as a reduction in a workforce which “(1) is not the

result of a plant closing; and (2) results in an employment loss at a single site of employment

during any 30-day period, beginning on the date of the first employment lost, for either: [a]t least

twenty-five (25) employees constituting at least 33% of the employees at the site, OR at least

250 employees.” N.Y. LAB. LAW § 860-a(4); see also N.Y. COMP. CODES R. & REGS.

(“N.Y.C.R.R.”) tit. 12 § 921-6.3(f). An “employment loss” is defined, in relevant part, as a

termination, “other than a discharge for cause, voluntary departure, or retirement,” or “a mass

layoff exceeding six months.” N.Y. LAB. LAW § 860-a(2)(a)-(b). A temporary furlough is

considered a “short-term layoff” if it lasts fewer than six months but is considered an

“employment loss” if it exceeds six months. Id. § 860-d. If an initially short-term furlough is

later extended beyond six months for any reason other than business circumstances “not

reasonably foreseeable at the time of the initial layoff,”4 the “date of layoff,” for the purposes of

the statute, is considered to be the date the furlough originally commenced. N.Y.C.R.R. tit. 12

§ 921.3.1; see also id. § 921-1.1(c) (“Date of layoff means the last day an employee is eligible or

permitted to work for his/her employer.”).

Plaintiffs have alleged that all named Plaintiffs and proposed class members were

furloughed from either the City Office or the Call Center on or around April 15, 2020, and that

none of the furloughed employees received pay or was permitted to work for Emirates thereafter.

(AC ¶ 210.) For each employee, the temporary furloughs were extended into a permanent layoff

at various times over the following months; fifteen City Office employees were permanently

terminated on or around July 1, 2020 (id. ¶ 209), and twenty-five City Office employees were

permanently terminated in October 2020 (id.). Still, the “date of layoff” for all forty employees

in the City Office must be considered the last day they were permitted to work for Emirates —

the day the furlough commenced — in April 2020. (Id. ¶ 210.) Plaintiffs have alleged that the

City Office employed approximately sixty-five people at that time. (Id. ¶ 116.) Therefore, the

April 2020 furlough of forty City Office employees constituted a reduction in workforce of over

33% of the employees at the site, qualifying the event as a “mass layoff.” N.Y. LAB. LAW § 860-

a(4). Additionally, the April 2020 furlough of forty-two of the forty-three employees at the Call

4 Defendants argue that the terminations were a result of the COVID-19 pandemic (Def.

Mem. at 8-14), which constituted an “unforeseeable business circumstance” that was “not

reasonably foreseeable” at the time of the April 2020 furloughs. N.Y.C.R.R. tit. 12 § 921-

3.1. As discussed infra, Plaintiffs have alleged facts that, when viewed in the light most

favorable to their claim, plausibly support an inference that the ongoing effects of the

pandemic were “reasonably foreseeable” at the time of the April 2020 furloughs. (See

AC ¶¶ 71-73, 110-14.) Because a final determination regarding whether Emirates can

avail itself of the “unforeseeable business circumstances” defense is premature at this

stage, and the Court is bound to draw all reasonable inferences in favor of the Plaintiffs,

section 921-3.1 requires recognition of the mass layoff as beginning the day the first

furlough commenced.

Center, which was made permanent by the June 24, 2020, terminations, also satisfies the

definition of a “mass layoff” under the statute. Id. Therefore, the Court finds that Plaintiffs have

plausibly alleged that both the City Office and the Call Center layoffs were “mass layoffs”

requiring ninety days’ notice under the NY WARN Act.5

Notice and Exceptions

Defendants next argue that they did not violate the notice requirements of the NY

WARN Act because the unprecedented effects of the COVID-19 pandemic qualify for the

“unforeseeable business circumstances” and “natural disaster” exceptions to the notice

requirement. (Def. Mem. at 8-14.) At the outset, the Court may only dismiss a claim based on

an affirmative defense presented on a 12(b)(6) motion if the grounds for dismissal are evident on

the face of the claim itself. Jones v. Block, 549 U.S. 199, 215 (2007). Plaintiffs are “not

required to allege in the [Complaint] all circumstances necessary to negate [any] affirmative

defense[s].” In re Lehman Bros. Sec. & ERISA Litig., 799 F. Supp. 2d 258, 318 (S.D.N.Y.

2011). Therefore, the central question for the Court’s consideration at this stage is whether or not

Defendants’ notice requirement defenses “appear[] on the face of the complaint.” Ellul v.

Congregation of Christian Bros., 774 F.3d 791, 789 n.12 (2d Cir. 2014).

Plaintiffs allege that they were furloughed in April 2020, shortly after

international travel restrictions greatly impacted the airline industry. (AC ¶¶ 103-104.)

Emirates’ furlough letter and eventual notices of termination both stated that the workforce

5 Because Plaintiffs have sufficiently alleged that the layoffs at the Call Center and the City

Office both qualified as “mass layoffs” under NY WARN, the Court need not consider at

this time whether the offices ought to be considered a “single site” of employment for the

purposes of aggregating employment losses under the statute. (See Def. Mem. at 14-15;

Pl. Mem. at 17-18; see also N.Y. LAB. LAW § 860-a(p)(iii) (describing the relevant

considerations to determine whether separate buildings or facilities may be considered a

“single site of employment”).)

reduction was necessary to weather the “unprecedented” effects of the pandemic and the

resulting economic environment. (Furlough Letter; docket entry no. 44-6 (“Termination

Notice”).) The furlough letter itself provided deficient notice under NY WARN — Emirates did

not fulfill the Act’s specific notice requirements until they sent the final termination letter, which

informed Plaintiffs of their immediate employment loss.6 (AC ¶¶ 102-105; see also N.Y. LAB.

LAW § 860-b; N.Y.C.R.R. tit. 12 § 921-2.3.) Notice was not given until each Plaintiff received

their termination notice, in which Emirates wrote, “We apologize that we were unable to provide

you more advance notice of this [termination], but we were unable to do so.” (AC ¶ 102;

Termination Notice.) The letter also asserted that, “the sustained nature of governmental travel

restrictions due to COVID-19 was not foreseeable.” (Id.)

An employer may be exempt from the full ninety-day notice requirement if “the

need for a notice was not reasonably foreseeable at the time the notice would have been

required,” or “the . . . mass layoff is due to any form of natural disaster, such as a flood,

earthquake, or drought.” N.Y. LAB. LAW § 860-c(1)(b), (d). In order to qualify for the

“unforeseeable business circumstances” exception, Emirates must establish the layoffs were

caused by “the occurrence of some sudden, dramatic, and unexpected action or condition outside

of the employer’s control.” N.Y.C.R.R. tit. 12 § 921-6.3. The natural disaster exception requires

that the layoff was a “direct result of any form of a natural disaster including floods, earthquakes,

6 Defendants assert that they gave “effective notice” over sixty days before the first

termination, via the furlough letters that put employees on immediate unpaid furlough.

(Docket entry no. 47 (“Def. Reply”) at 6-7.) This argument is unpersuasive. At a

minimum, under NY WARN, “notice must be specific” and must meet certain

enumerated requirements, such as providing information regarding each employee’s

bumping rights, job training, and re-employment services. N.Y.C.R.R. tit. 12 § 921-2.1,

2.3. The furlough letter failed to meet NY WARN’s strict notice requirements.

droughts, storms, tidal waves, tsunamis, and or similar effects of nature.” Id. § 921-6.4. The

employer “bears the burden of proof to show that the requirements for an exception have been

met.” Id. § 921-6.1. Additionally, even under these exceptions, “the employer must provide as

much notice as possible in advance of the . . . mass layoff . . . to all required parties and also

include a statement of the reason for reducing the notice period.” Id. § 921-6.1. If an employer

must extend temporary furloughs into permanent layoffs due to “business circumstances . . . not

reasonably foreseeable at the time of the initial layoff,” the employer is required to give notice

“as soon as it becomes foreseeable that an extension is required.” Id. § 921-31.

Plaintiffs assert that Defendants are not entitled to a notice exception because the

mass layoffs were neither “unforeseeable” nor a “direct result” of the pandemic.7 (AC ¶ 109.)

Rather, they allege, Emirates could have complied with the Act’s notice requirements, because it

knew about the impending layoffs, and chose not to provide any notice whatsoever. (Id. ¶¶ 110-

14.) Plaintiffs allege Emirates had advanced warning of the pandemic’s effects because global

health and travel advisories began on January 31, 2020, and the United States instituted travel

bans on March 13, 2020, one month before the furloughs began. (Id. ¶¶ 71-73.) These

allegations, read in the light most favorable to Plaintiffs, plausibly support an inference that

Defendants failed to give “as much notice as possible,” even if Emirates can satisfy its burden of

7 Plaintiffs also dispute Defendants’ contention that the COVID-19 pandemic qualifies as a

“natural disaster” under the statute. The Second Circuit has not yet decided this issue in

the context of NY WARN. Courts outside of this Circuit have found that the pandemic is

not the sort of “natural disaster” contemplated under the federal WARN Act because, like

NY WARN, Congress chose not to include “terms like disease, pandemic or virus in the

statutory language of the WARN Act.” See Easom v. U.S. Well Servs., Inc., 37 F.4th 238,

244 (5th Cir. 2022), cert denied 143 S.Ct. 427 (Nov. 14, 2022). In other statutory and

legal contexts, courts within this district have found that COVID-19 qualifies as a

“natural disaster.” See, e.g., JN Contemp. Art LLC v. Phillips Auctioneers LLC, 507 F.

Supp. 3d 490, 501 n.7 (S.D.N.Y. 2020). In any event, the Court need not — and does not

— decide this issue at this stage.

establishing entitlement to either notice exception. Therefore, the Court finds on the face of the

Complaint that the pleadings are sufficient to support an inference that Emirates was required to

give terminated employees notice and the notice given was insufficient.

Because any determinations regarding the Defendants’ affirmative defenses are

inappropriate at this stage and Plaintiffs have adequately plead their prima facie case,

Defendants’ motion to dismiss count four of the Amended Complaint is denied.

Motion to Strike the Jury Demand

Defendants move to strike the Plaintiffs’ jury demand, pursuant to Rule 39(a)(2)

of the Federal Rules of Civil Procedure, on the basis that the Foreign Sovereign Immunities Act

(“FSIA”), 28 U.S.C. § 1602 et seq., prohibits jury trials of claims against instrumentalities of a

foreign sovereign. (MTD; Def. Mem. at 24-25.) “The district courts shall have original

jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign

state as defined in section 1603(a) of this title as to any claim for relief in personam with respect

to which the foreign state is not entitled to immunity . . . .” 28 U.S.C.A. § 1330(a) (Westlaw

through P.L. 118-41). The FSIA defines when a party is entitled to immunity as a foreign state,

and under what circumstances federal courts may exercise jurisdiction of foreign states. See 28

U.S.C. § 1603(a). The parties do not dispute that Emirates, even if entitled to the protection of

the FSIA, is not immune to any of the Plaintiffs’ claims. However, the FSIA only provides for

nonjury civil trials against foreign states. See 28 U.S.C. § 1330. Therefore, if Emirates is a

“foreign state” within the meaning of section 1603, Plaintiffs will not be entitled to a jury trial on

any of their civil claims. See Bailey v. Grand Trunk Lines New Eng., 805 F.2d 1097, 1101 (2d

Cir. 1986) (finding the Defendant immune from jury trials even though it “waived its immunity

from suit in the United States by virture [sic.] of its commercial activities [because] it remains

amenable to suit in our courts only to the extent permitted by, and in accordance with the express

terms of, the FSIA.”).

To invoke the FSIA, Defendants must produce prima facie evidence that they are

entitled to sovereign immunity. Plaintiffs then bear the burden of showing that, under the

exceptions set forth in the FSIA, immunity should not be granted. The ultimate burden of

persuasion remains with Emirates as the party asserting immunity. Marchisella v. Gov’t of

Japan, No. 02-CV-10023-DC, 2004 WL 307248, at *2-3 (S.D.N.Y. Feb. 17, 2004); see also

Robinson v. Gov’t of Malaysia, 269 F.3d 133, 141 (2d Cir. 2001).

Under 28 U.S.C. section 1603(b), an “agency or instrumentality of a foreign state”

is — in relevant part —any entity (1) “which is a separate legal person, corporate or otherwise,

and (2) which is an organ of a foreign state or political subdivision thereof, or a majority of

whose shares or other ownership interest is owned by a foreign state or a political subdivision

thereof.” 28 U.S.C.A. § 1603(b)(1)-(2) (Westlaw through P.L. 118-41). Emirates has proffered

evidence that it is owned by the Investment Corporation of Dubai (“ICD”), which is a sovereign

wealth fund wholly owned and controlled by the Government of Dubai. (Def. Mem. at 24; see

also docket entry no. 44-1 (the “Annual Report”).) Critically, Emirates is not itself owned by “a

foreign state or a political subdivision thereof,” but is instead owned by an intermediary

corporation — the ICD — which is, in turn, controlled by the Government of Dubai. (Def.

Mem. at 24.) Yet, the FSIA only provides immunity for instrumentalities which are directly

owned by a foreign state; the “tiering” of instrumentalities and subsidiaries is not permissible

under the FSIA. See Dole Food Co v. Patrickson, 538 U.S. 468, 473-74 (2003) (holding that

“indirect subsidiaries” of foreign governments do not satisfy the FSIA because “only direct

ownership of a majority of shares by the foreign state satisfies the statutory requirement”); see

also Chavez v. Occidental Chem. Corp., 8 F.4th 91, 95 (2d Cir. 2021). Thus, the Court cannot

find Emirates to be an instrumentality of Dubai on the basis of the government’s ownership of

ICD.

While indirect state ownership does not satisfy the “instrumentality” definition of

section 1603, Emirates may still be a “foreign state” within the meaning of the statute if it is an

“organ of a foreign state or a political subdivision thereof.” 28 U.S.C.A. § 1603(b)(2) (Westlaw

through P.L. 118-41); see also European Comm. v. RJR Nabisco, Inc., 764 F.3d 129, 144 (2d Cir.

2014), rev’d on other grounds, 579 U.S. 325 (2016). Because Congress did not define what

constitutes an “organ of a foreign state” under the FSIA, courts have developed a five-factor test

to determine whether a party meets the definition. See RJR Nabisco, 764 F.3d at 144 (citing

Filler v. Hanvit Bank, 378 F.3d 213, 217 (2d Cir. 2004)). Courts consider: (1) whether the

foreign state created the entity for a national purpose; (2) whether the foreign state actively

supervises the entity; (3) whether the foreign state requires the hiring of public employees and

pays their salaries; (4) whether the entity holds exclusive rights to some right in the [foreign]

country; and (5) how the entity is treated under foreign state law. Id. No single factor is

determinative, and the analysis requires a balancing process. Id.

On the current record, Emirates has proffered insufficient information to permit

the Court to engage in a determination as to whether it is an “organ” of Dubai. (See Def. Mem.

at 24-25.) Therefore, the Court finds that it lacks the necessary information to determine

Emirates’ status under the FSIA. Because Defendants have failed to establish a prima facie case

for immunity at this time, their motion to strike the jury demand is denied without prejudice to

renewal at a later date.

CONCLUSION

For the foregoing reasons, the Defendants’ motion to dismiss is denied in its

entirely. The Defendants’ motion to strike the jury demand is denied without prejudice to

renewal. Defendants are hereby directed to file an answer to the Amended Complaint by April

22, 2024. This case will be referred to Magistrate Judge Netburn for general pretrial

management.

This Memorandum Order resolves docket entry no. 42.

SO ORDERED.

Dated: New York, New York

March 31, 2024

/s/ Laura Taylor Swain

LAURA TAYLOR SWAIN

Chief United States District Judge