New York Labor Law Specifically Limits Preclusive Effect of Unemployment Decisions in Subsequent Lawsuits Against Same Employer

People frequently ask me whether they can sue their former employer for discrimination even though the unemployment insurance board found that they were terminated “for cause” and thus denied them unemployment benefits. Fortunately, the answer in New York is “yes.”

Pursuant to New York Labor Law § 623(2), determinations made by a Department of Labor Administrative Law Judge or even by the New York Unemployment Insurance Appeal Board have no preclusive effect in subsequent judicial actions against the same employer. Specifically, the statute provides that, “No finding of fact or law contained in a decision rendered … by … by a referee [or] the appeal board … shall preclude the litigation of any issue of fact or law in any subsequent action or proceeding.”

In Payton v. City University Of New York, 453 F.Supp.2d 775 (S.D.N.Y. 2006), the court found that “Labor Law § 623(2) provides that unemployment proceedings have no preclusive effect on court proceedings,” and in Wooten v. New York City Dep’t of Gen. Services, 207 A.D.2d 754 (1st Dept. 1994), the court cited Labor Law § 623(2) when it refused to give preclusive effect to the Unemployment Insurances Board’s finding.

This is because “unemployment benefit hearings are designed to be quick and inexpensive…. Further … generally the hearing officer or the board has no special competence in deciding discrimination claims.” Arroyo v. WestLB Admin., Inc., 54 F.Supp.2d 224, 230 (S.D.N.Y. 1999); See also Hamilton v. Niagara Frontier Transp. Authority, 2008 WL 4724324, 5 (W.D.N.Y. 2008) (“There is simply no reason to present the Appeals Board’s determination of facts regarding plaintiffs injury, leave and termination to the jury when the jury can and should be presented with the same or better evidence to reach its own conclusion as to these important issues.”); Abramowitz v. Inta-Boro Acres Inc., 1999 WL 1288942, 8 (E.D.N.Y. 1999) (excluding unemployment insurance rulings because they “contain factual conclusions that, if taken at face value, might reasonably be construed as foreclosing deliberation on whether the firing of plaintiff was pretextual.”)

If you believe that your former employer discriminated against you, regardless of whether you were denied unemployment benefits, we strongly recommend consulting with an attorney as soon as possible. Call the Law Office of Yuriy Moshes today to preserve all your legal rights or contact us online.