SDNY Notes Split Re Conflict between Federal Reserve Act and State Anti-Discrimination Law

Per Goonan v. Federal Reserve Bank of New York, --- F.Supp.2d ----, 2013 WL 69196 (S.D.N.Y. Jan. 7, 2013:

The proper interpretation of the FRA's dismiss at pleasure provision is undeniably a difficult question. Some courts have concluded that there is no conflict between the FRA and state anti-discrimination laws because this provision speaks only to contractual and other common law rights created under state law. See Katsiavelos, 1995 WL 103308, at *2–4; Mueller, 797 F.Supp. at 662–63. Other courts have read the provision as a wide-ranging grant of discretionary authority that shields the Fed from any liability that arises from termination decisions—except as impliedly amended by later-enacted federal anti-discrimination statutes.See, e.g., Fasano, 457 F.3d at 288. These courts, in turn, have split over whether state anti-discrimination laws are preempted in their entirety or only to the extent that they sweep more broadly than their federal counterparts. Compare Arrow, 358 F.3d at 393 (entirely preempted), with Kroske, 432 F.3d at 988–89 (partly preempted), and James II, 471 F.Supp.2d at 236 (same); see also Fasano, 457 F.3d at 288 (reserving judgment on this issue while noting that “[w]e need not take a position on whether state remedies exactly consonant with the ADA and 12 U.S.C. § 1831j would similarly offend ‘the full purposes and objectives of Congress' ”). In a dissenting opinion, three Justices of the California Supreme Court have gone even further than the federal courts by strongly suggesting that later-enacted federal anti-discrimination laws did not impliedly amend the FRA—in which case the Fed would be immune even from ADA liability. See Peatros v. Bank of Am. NT & SA, 22 Cal.4th 147, 185 (2000) (Brown, J., dissenting). In sum, district and appellate courts that have addressed this issue are deeply divided.

Recognizing this split in judicial authority, and considering both the arguments advanced by the parties and the arguments offered by other courts, this Court concludes that the FRA doesnot preempt state and local anti-discrimination laws. In reaching that conclusion, the Court has considered all three forms of preemption: express, field, and conflict. None applies here.


At 6:35 PM, Anonymous Anonymous said...

Prof. Spencer,

Do you think this issue is one the Supreme Court will see fit to resolve any time soon? If not, do you think the federal anti-discrimination statutes are adequate to realistically cover the potential causes of action that will continue to arise in the employment setting? Also, is this judicial confusion over statutory interpretation typical in circumstances where a moral gulf exists between two congresses separated by so many decades?

Thank you,

J. Tyler Black
Washington and Lee School of Law
J.D. Candidate, May 2014

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State and Federal will always come at odds and unless there is something that really addresses the cause or issue it can be taken to a federal level.

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