Comm n on Human Rights v. Vudu Lounge OATH Index No. 233/12 (Dec. 16, 2011), adopted, Comm n Dec. & Order (Mar. 22, 2012)

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1 Comm n on Human Rights v. Vudu Lounge OATH Index No. 233/12 (Dec. 16, 2011), adopted, Comm n Dec. & Order (Mar. 22, 2012) Nightclub discriminated based on gender by advertising for a hostess and refusing to accept application from male applicant. Civil penalty of $7,500 and affirmative relief recommended. NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS In the Matter of COMMISSION ON HUMAN RIGHTS Petitioner - against - VUDU LOUNGE Respondent REPORT AND RECOMMENDATION KEVIN F. CASEY, Administrative Law Judge Petitioner, the New York City Commission on Human Rights, brought a complaint against respondent, Vudu Lounge, alleging that it violated section of the Administrative Code by advertising for a hostess and refusing to accept an application from a male applicant. At a hearing on November 28, 2011, respondent appeared by its president Michael Bergos, without an attorney. After explaining the benefits of an attorney and the risks of going forward without one, I offered Mr. Bergos the opportunity for an adjournment to retain counsel. He declined that offer and elected to continue with the hearing (Tr. 4-7). Petitioner presented documentary evidence and the testimony of former Commission employee, Daniel Patlan. Respondent relied on testimony from its general manager, Michael Stein. For the reasons below, I find that respondent violated the Administrative Code and recommend a $7,500 civil penalty and other affirmative relief. ANALYSIS The Complaint and Answers In a verified complaint dated June 1, 2010, petitioner alleged that on May 3, 2010, respondent posted an employment advertisement on Craigslist.org for a door hostess (ALJ Ex.

2 -2-1). Two days later, the Commission sent a male tester to respondent s place of business. The tester met with respondent s manager and expressed an interest in the open position. The manager replied that the position was only available to hostesses but offered the tester a position as a promoter (ALJ Ex. 1). On June 17, 2010, respondent submitted an answer (Pet. Ex. 1). Respondent admitted that it posted the advertisement, but explained that it was an open call to screen for potential qualified employees, not to conduct interviews (Pet. Ex. 1). Respondent further alleged that a male candidate was hired for the position (Pet. Ex. 1). In a follow-up letter to the Commission, dated July 6, 2010, manager Michael Stein asserted that the person responsible for posting the advertisement no longer worked for respondent and had no right to post the advertisement, because, We had no need or intention to hire for this position (Pet. Ex. 2). The letter further explained that the man who was hired was a retired police sergeant who accepted an offer of employment but never worked for respondent (Pet. Ex. 2). Preliminary Issues Prior to the hearing, respondent sought to call Asha Smith as a witness but this tribunal declined to compel her attendance (Tr. 12). Ms. Smith is an attorney who previously represented petitioner in this matter and she no longer works for the Commission (Tr. 12). According to Mr. Stein, during an earlier stage of litigation, he presented the facts of the case to Ms. Smith and she offered her opinions (ALJ Ex. 2). For example, respondent asserted that Ms. Smith stated, We can work this out and You guys haven t done anything wrong (Tr. 12). Respondent protested that it was unfairly prejudiced by Ms. Smith s absence (Tr , 15). That claim lacks merit. Ms. Smith was not an eyewitness to the incident that led to the charges. Her opinions, offered in the context of a settlement discussion, were not relevant or admissible. See 48 RCNY 1-31(b) (settlement offers shall be confidential and shall be inadmissible at the trial of any case ). In any event, respondent suffered no prejudice from Ms. Smith s absence. As I explained to respondent, if Ms. Smith made relevant statements to Mr. Stein, he was a party to the conversation and he could have testified about those statements, but he neglected to do so (Tr. 15). See Matter of Seyfried, OATH Index No. 127/97 at 10 (Jan. 3, 1997), adopted in part, Loft Bd. Order No (Mar. 20, 1997) (no necessity to call party s

3 -3- attorney as a witness regarding conversations, where party could have offered the same testimony). At the outset of the hearing, respondent also argued, without elaboration, that petitioner had not served the proper party (Tr. 20). That claim is mistaken. The primary purpose of service of pleadings in an administrative adjudication is to provide notice. Dep t of Buildings v. 98 West 183rd Street, Bronx, OATH Index No. 845/97 at 3-4 (Apr. 8, 1997), aff d sub nom., Deli Food Grocery Corp. v. Silva, 259 A.D.2d 345 (1st Dep't 1999) (actual service on person who identified herself as owner of corporation deemed sufficient to establish that corporate store owner had notice of padlock proceeding). Actual notice satisfies the constitutional guarantee of due process. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) (service must be reasonably calculated, under all circumstances, to apprise all interested parties of the pendency of the action and afford them an opportunity to present their objections); see also Reda v. Dep t of Health of the City of New York, 137 Misc. 2d 61, 63 (Sup. Ct. N.Y. Co. 1987), aff d, 143 A.D.2d 1073 (1st Dep't 1988). Here, there was no dispute that respondent, Vudu Lounge, had actual notice well in advance of the hearing. Respondent submitted an answer, requested and received an adjournment, and appeared by its representative, corporation president Michael Bergos, who filed a notice of appearance. Having answered, appeared, and contested the matter on the merits; respondent waived any technical objections to service of the petition. See also Dep t of Buildings v Westchester Avenue, Bronx Co., OATH Index No. 1943/99 at 3 (Oct. 26, 1999) (actual notice of proceedings deemed sufficient where respondent occupant received a copy of the petition and notice of hearing from respondent owner in advance of the hearing and appeared through counsel to request an adjournment); compare Comm n on Human Rights ex rel. Canty v. Magnamart Cleaners & Launderers, OATH Index No. 2659/08 at 4 (Aug. 7, 2008), adopted, Comm n Dec. & Order (Feb. 19, 2009) (proof of service deemed sufficient to provide notice to business entity), with Comm n on Human Rights ex rel. Hollinger v. Dep t of Education, OATH Index No. 486/05, mem. dec. at 3-4 (Jan. 26, 2005) (dismissal of petition where no proof of service or actual notice).

4 -4- The Evidence at the Hearing Mr. Patlan testified that he worked as a college aide for petitioner in His responsibilities included scanning Craigslist for possible discriminatory advertisements (Tr. 23). On May 3, 2010, the following advertisement appeared on the website: Busy Manhattan night club looking for door hostess... Open call Tuesday and Wednesday 11:00 a.m. to 4:00 p.m. Responsibilities include socializing and operating guest list (Pet. Ex. 4). The advertisement listed the name and address of respondent s nightclub (Pet. Ex. 4). On May 5, 2010, Mr. Patlan went to respondent s premises, displayed the advertisement to someone at the entrance, and asked to speak to a manager regarding the host position (Tr. 23). Mr. Patlan was escorted to the bar and introduced to the manager, named Mike (Tr. 25). The manager said that the position was strictly for women but he did offer Mr. Patlan a position as a promoter (Tr. 25). After leaving the premises, Mr. Patlan promptly made some notes on the back of the advertisement (Pet. Ex. 4; Tr. 26). Two days later, Mr. Patlan prepared a memorandum summarizing his observations (Pet. Ex. 5; Tr. 26). According to the notes and memorandum, Mr. Patlan spent two minutes at the location and the manager said that he needed a female to check in guests (Pet. Exs. 4, 5). When offered the promoter position, Mr. Patlan said that he only had hosting experience (Pet. Ex. 5). The manager also stated that he would take Mr. Patlan s resume in case a position became available (Pet. Ex. 5). Mr. Stein testified that he has been general manager of Vudu Lounge for more than two years (Tr. 35). A graduate of the University of Las Vegas, he has previous experience as a manager with another nightclub and the Harrah s Corporation (Tr. 35). He has formal and informal training regarding gender discrimination in hiring (Tr. 36). According to Mr. Stein, he would never tell someone that the host position was only available for females (Tr. 31). Nor would he offer anyone a position without seeing a resume (Tr. 32). If a male applicant had been qualified for the host position, Mr. Stein would have offered him the position (Tr ). Although Mr. Stein claimed that men previously worked as hosts at the club, he did not identify any or offer any supporting proof for this claim (Tr. 31). Mr. Stein testified that he did not post the advertisement on Craigslist (Tr. 31). He believed that a promoter, who did not work for respondent, must have posted it (Tr. 31). Mr. Stein had no recollection of meeting with or speaking to Mr. Patlan (Tr. 31).

5 -5- At the conclusion of the hearing, respondent argued that the charges lacked merit because the advertisement was posted by someone not even known to the company (Tr. 37). Respondent further denied that the tester was ever told that the position was only for females (Tr. 37). Respondent s representative argued that the nightclub had been in existence for 11 years and had male hosts (Tr. 37). The complaint should be sustained because petitioner s witness was more credible than respondent s. Mr. Patlan s testimony was corroborated by contemporaneous notes, a memorandum, and other documentary evidence (Pet. Exs. 3, 4, 5). He did not exaggerate or embellish. For example, he did not claim to recognize Mr. Stein at the hearing. Instead, Mr. Patlan credibly testified that he went to the premises, asked for the manager, and was introduced to a white male named Mike. Mr. Stein, a white male named Mike, testified that he has been respondent s manager for more than two years. Under these circumstances, it is more likely than not that Mr. Patlan spoke to Mr. Stein. As for the substance of their conversation, Mr. Patlan had no discernable motive to lie and he took notes that day, which he summarized in a memorandum. In contrast, respondent offered conflicting, unsupported, and unpersuasive claims. For example, respondent argued at the hearing that some unknown person took out the advertisement. But this conflicted with respondent s answer to the complaint, which admitted to taking out the advertisement (Pet. Exs. 1, 2). Moreover, petitioner presented evidence, obtained from Craigslist, indicating that Michael Bergos, president of the company, paid for the advertisement with his credit card (Pet. Ex. 3). Respondent offered no credible evidence to rebut that proof. Similarly, respondent claimed that the charges must be false because it had hired male hosts in the past. Respondent offered no reliable proof, such as payroll records, to support this contention. Instead, respondent offered general denials. It is unlawful for an employer to discriminate in hiring based on gender. Admin. Code 8-107(1)(a). It is also unlawful for an employer to circulate any advertisement which expresses, directly or indirectly, any limitation, specification or discrimination as to gender. Admin. Code (1)(d). Here, the evidence showed that respondent violated both of these provisions. The evidence supports the conclusion that respondent made a deliberate decision to discriminate based on gender when it posted an advertisement specifically limited to a hostess and told a tester that male applicants were ineligible for the position. Thus, the complaint should be sustained.

6 -6- FINDING AND CONCLUSION Petitioner proved that respondent discriminated based on gender, as alleged in the verified complaint. RECOMMENDATION Petitioner has requested a civil penalty of $10,000 and additional affirmative relief of anti-discrimination training (Tr. 41). Upon a finding of unlawful discrimination, petitioner may impose a civil penalty of up to $125,000 to vindicate the public interest; and in the case of a willful, wanton or malicious act of discrimination, the penalty may be as high as $250,000. Admin. Code 8-126(a) (Lexis 2011). Civil penalties are designed to punish the violator and to strengthen and expand the enforcement mechanisms of the law so the Commission could prevent discrimination from playing any role in actions related to employment, public accommodations, housing and other real estate East 97th Street Corp. v. Comm n on Human Rights, 220 A.D.2d 79, 88 (1st Dep t 1996). As petitioner explained, the Commission follows the principle of proportionality and tailors its civil penalties to specific factual circumstances (Tr. 39). Among the relevant factors are the egregiousness of the discrimination and whether it was committed over a period of time, whether there are any previous findings of discrimination against the respondent, and the potential impact of respondent s discrimination on the public. See Comm n on Human Rights v. Rent The Bronx, Inc., OATH Index No. 1619/11 at 13 (July 27, 2011), adopted, Comm n Dec. & Order (Oct. 27, 2011) ($5,000 civil penalty imposed where real estate broker posted discriminatory advertisement on the internet and discriminated against tester based on source of income; penalty mitigated by absence of evidence of impact on the public, proof of financial hardship, and broker s acceptance of responsibility); Comm n on Human Rights v. Silver Dragon Restaurant, OATH Index No. 677/03 (May 30, 2003), modified on penalty, Comm n Dec. & Order (July 28, 2003), modified on penalty, NYLJ, Mar. 31, 2004, at 24 (Sup. Ct. Kings Co.) (Commission-imposed civil penalty of $10,000 reduced by court to $5,000 for single act of discrimination where restaurant discriminated against a tester based on race by requiring her to pay for her order before she received her food while not requiring the same from

7 -7- other customers; despite deplorable nature of discrimination, court found no evidence of discriminatory conduct over an extended period or other aggravating factors). For hiring discrimination, recent civil penalties after a hearing range from $5,000 to $15,000. See Human Rights ex rel. Cherry v. Stars Model Management, OATH Index No. 1464/05, at (Mar. 7, 2006), adopted, Comm n Dec. & Order (Apr. 13, 2006), aff d sub nom Secor v. NYC Comm n on Human Rights, 13 Misc.3d 1220A (Sup. Ct. N.Y. Co. 2006) ($15,000 civil penalty imposed where employment agency handled bookings for hundreds of companies and told respondent, we don t take niggers in the show ); Comm n on Human Rights ex rel. Campbell v. Personal Employment Services, OATH Index No. 1579/07 (Aug. 20, 2007), adopted, Comm n Dec. & Order (Dec. 14, 2007) ($5,000 civil penalty and $1,000 compensatory damages where employment agency discriminated against a job applicant based on her age and there was no evidence of protracted discrimination or significant impact on the public). Moreover, the Commission has recently settled several cases similar to this one, involving gender discrimination in hiring based on advertisements confirmed by testers. The typical settlement for this type of case includes a $5,000 civil penalty. See Settlements, NYC Commission on Human Rights (2011), (listing six cases in 2011 where employers posted advertisements that discriminated based on gender; one settled for $6,500, four for $5,000, and one for $2,500). Here, a penalty closer to the $5,000 for the isolated discrimination in Personal Employment Services, rather than the $15,000 imposed for the egregious discrimination in Stars Model Management is appropriate. Indeed, petitioner conceded that respondent s conduct was not particularly egregious or protracted conduct and there was no evidence of a prior finding of discrimination or use of offensive language (Tr. 39). Petitioner correctly noted that respondent committed two acts of discrimination by advertising for the position on a widely used website and by refusing to accept the tester s application (Tr ). However, the two acts were inextricably linked. The tester confirmed the discriminatory intent of the advertisement. In support of its request for a $10,000 civil penalty, petitioner argued that this type of conduct potentially affected a large number of job seekers deterred from applying based on the advertisement s discriminatory language (Tr. 39). There is considerable force to petitioner s argument. However, there was no evidence of how many people viewed the posting. Nor was

8 -8- there any evidence that the advertisement deterred any qualified male from applying. There was no evidence of protracted discrimination and there was no evidence that the Commission had received any complaints. Under these circumstances, a reduced penalty is appropriate. Compare Rent the Bronx, Inc., OATH 1619/11 at 21 (although realtor posted discriminatory advertisement on Craigslist, there was no evidence that any potential renter viewed the site or were deterred by advertisement); with Comm n on Human Rights v. Coticelli, OATH Index No. 970/11 at 7-9 (Aug. 19, 2011), adopted, Comm n Dec. & Order (Nov. 21, 2011) ($10,000 civil penalty imposed where result of investigation by Commission testers was consistent with anonymous complaint that homeowner discriminated on the basis of race by refusing to rent an apartment to a black person). Although there was no evidence of prolonged discrimination or any complaint, the $5,000 civil penalty imposed in Campbell Employment Services, Silver Dragon Restaurant, and Rent the Bronx, Inc., would not be appropriate. Respondent offered no credible evidence of financial hardship. Moreover, this is not a case involving a carelessly drafted advertisement by an unsophisticated businessperson. Respondent s general manager has extensive managerial experience and familiarity with anti-discrimination laws. The conduct here appeared to be a deliberate decision to discriminate based on gender, committed by those who should have known better. Accordingly, I recommend imposition of a $7,500 civil penalty and the affirmative relief of requiring respondent s management and hiring staff to undergo anti-discrimination training. See Admin. Code 8-120(a) (authorizing the Commission to require respondent to take affirmative action to effectuate the purpose of the City s Human Rights Law). Kevin F. Casey Administrative Law Judge December 16, 2011

9 -9- SUBMITTED TO: PATRICIA GATLING Commissioner APPEARANCES: KEITH CHAPMAN, ESQ. Attorney for Petitioner MICHAEL BERGOS Respondent s Representative

10 -10- CITY OF NEW YORK COMMISSION ON HUMAN RIGHTS x In the Matter of NEW YORK CITY COMMISSION ON Complaint # HUMAN RIGHTS Petitioner, -against- VUDU LOUNGE, OATH Index # Respondent. 233/ x DECISION AND ORDER On June 1, 2010, the Law Enforcement Bureau ( the Bureau or LEB ) of the New York City Commission on Human Rights ( the Commission ) filed a Verified Complaint ( complaint ) on its own motion, charging Vudu Lounge ( Respondent ) with violating Title 8 of the Administrative Code of the City of New York, ( Code or the Human Rights Law ). Specifically, the Bureau alleged that on May 3, 2010, Respondent advertised a job opening for a door hostess on the website Craigslist.org ( Craigslist ). The advertisement announced an open call for the position, which was to be held on Tuesday, May 4, 2010 and Wednesday, May 5, A male tester ( the Bureau tester ) attended the open call on May 5, 2010, and was interviewed by a man named Michael, who introduced himself to the Bureau tester as Respondent s manager. The Bureau tester expressed interest in the open position, and asked whether or not the position was limited to hostesses. Michael confirmed that the position was limited to hostesses. He then offered the Bureau tester an interview for a promoter position. By letter dated June 17, 2010, Respondent answered the complaint, denying the allegations of unlawful discrimination; asserting that a male candidate was hired for the position in question; and stating that Respondent could neither confirm nor deny that the Bureau tester attended the open call. In a letter dated July 16, 2010, signed by Respondent s General Manager, Michael Stein, Respondent supplemented its answer. In the July 16 letter, Mr. Stein stated that a former employee had posted the ad, doing so without authorization, and that, the posting was not cleared through our office administrator, who would have caught on to the gender limitation. Mr. Stein further asserted that although a retired New York City Police officer was

11 -11- offered the position, and had accepted it, he never started the job or received payment; and that Respondent had no payroll information concerning the officer. After unsuccessful efforts to settle the case, the Bureau referred to matter to the Office of Administrative Trials and Hearings (hereafter referred to as OATH ). A trial was held before Administrative Law Judge Kevin F. Casey on November 28, Respondent appeared pro se, via Michael Burgos, Respondent s president. After ALJ Casey warned him of the risks of doing so, Mr. Burgos chose to proceed to trial without counsel. Mr. Burgos presented testimony from Michael Stein. The Bureau presented testimony from former Commission employee Daniel Patlan, as well as documentary evidence. The relevant testimony of the Bureau s witness was consistent with the complaint, in that Mr. Patlan testified that he worked for the Commission in 2010, where his duties included reviewing advertisements placed on Craigslist for possible discriminatory content (Tr. 23). In May 2010, Mr. Patlan was assigned to investigate an advertisement placed on Craigslist, in which Respondent sought door hostesses. (Tr. 23; Pet. Ex. 4), and announced an open call for applicants for that position. Mr. Patlan testified that he went to Vudu Lounge on May 5, 2010, where he displayed a copy of the advertisement to someone at the entrance, and asked to speak with a manager regarding the host position (Tr. 24). After being led to the bar and introduced to the manager, Mr. Patlan inquired about the job. The manager told him that the position was strictly for women, but offered him a job as a promoter (Tr. 25). Mr. Patlan declined the offer, saying that he had only hosting experience. He then left the premises, making notes about the interaction on the back of the advertisement (pet. Ex. 4; Tr. 26). Two days later, on May 7, 2010, he wrote a memorandum concerning the incident (pet. Ex. 5; Tr. 26). In the memorandum, Mr. Patlan indicated that the manager he spoke with was a Caucasian male who introduced himself as Michael. At trial, Mr. Patlan stated that he did not recognize Mr. Stein as the manager he had spoken with, and that the entire incident lasted two minutes (Tr. 28). In addition to the copy of the Craigslist ad on which Mr. Patlan made his notes, and the May 7, 2010 memorandum, the Bureau also entered into evidence documents provided by Craigslist in response to a subpoena (Pet. Ex. 3), which showed that Michael Bergos, Respondent s president, paid for the ad with his credit card. Mr. Stein testified that he has experience as a nightclub manager with another nightclub and with the Harrah s corporation, where he received anti-discrimination training, and that he

12 -12- has worked as general manager at Vudu Lounge for more than two years (Tr ). He denied posting the ad on Craigslist, but believed that a promoter, one not employed by Respondent, must have done so (Tr. 31). Mr. Stein testified that he would never offer anyone a position without seeing a resume; that he would never tell anyone that the host position was limited to females; and that he would hire a qualified male applicant for the position (Tr ). He stated that men have previously worked as hosts at Vudu Lounge, but did not identify any such employees, or provide documentation corroborating their employment there (Tr. 31). Mr. Stein did not recall speaking to, or meeting with, Mr. Patlan (Tr. 31). ALJ Casey issued a Report and Recommendation on December 16, 2011, wherein he found that Respondent violated the Code, as alleged in the complaint. The ALJ recommended that Respondent be fined $7,500, and recommended that the Commission order Respondent s employees to undergo training on their obligations under the HRL. After reviewing the trial transcript and the exhibits, the Report and Recommendation, and the comments submitted by the Bureau * ; the Commission adopts ALJ Casey s recommendation. The Human Rights Law prohibits employers from discriminating in hiring based on gender; the code also prohibits the circulation of any advertisement which expresses, directly or indirectly, any limitation, specification or discrimination as to... gender... or any intent to make any such limitation, specification or discrimination. See Code Sections 8-107(1)(a) and 8-107(1)(d). In finding that Respondent violated these provisions, the ALJ properly applied the law, and there is ample basis in the record for his factual findings. Moreover, ALJ Casey found that petitioner s witness was more credible than respondent s (Rep t. and Rec. at 5). Assessments of witness credibility are the proper role of the fact finder, who has the opportunity to directly observe the witnesses, and the Commission finds no basis in the record for questioning the ALJ s credibility determinations. We find that the ALJ properly weighed the relevant factors in determining the recommended civil penalty, and find the recommended amount to be appropriate. The Commission agrees that the affirmative relief recommended is warranted, and adopts that recommendation, as well. * Respondent declined to submit comments to the Report and Recommendation.

13 -13- IT IS HEREBY ORDERED, that the respondent pay the City of New York a fine in the amount of $7,500; and provide training to its employees about their obligations under the New York City Human Rights Law. Within sixty (60) days after service of this order, Respondent shall provide this training to its employees and provide proof to the Commission that the training has occurred. Such proof must include the dates on which the training occurred; attendance records containing the names and signatures of the employees trained; and the name, address and qualifications of the person or persons conducting the training. Pursuant to Section 8-123(h) of Title 8 of the Administrative Code of the City of New York, anyone aggrieved by this Order has thirty (30) days after service to seek review in the New York State Supreme Court. Dated: New York, New York March 22, 2012 SO ORDERED: New York City Commission on Human Rights Grace Lyu-Volckhausen Commissioner Omar Mohammedi Commissioner Patricia L. Gatling Commissioner