Key Points

  • The Fourth Department unanimously confirmed the State Division of Human Rights' determination that Tessy Plastics Corp. unlawfully retaliated against an employee who reported an alleged sexual assault by a coworker.
  • The court held that the civil penalty imposed under Executive Law § 297(4)(c)(vi) did not violate the jury-trial right in article 1, section 2 of the New York Constitution, because Human Rights Law claims are statutory, did not exist at common law, and were first enacted in 1945.
  • The court held that the commissioner rationally found a suspension, even with pay, to be an adverse employment action, and rationally found the employer's stated reason for the firing to be pretextual based on more lenient treatment of other employees.
  • The court rejected the argument that the adjudication counsel lacked authority to prepare the alternative proposed order the commissioner adopted.
  • The court granted enforcement of awards totaling $147,208.60 to the complainant, $88,961 in attorney's fees, and a $45,000 civil fine, and remitted to Supreme Court, Onondaga County, to fix attorney's fees for the appellate proceeding.

A New York appeals court held Friday that an employer had no right to a jury trial under the State Constitution before the New York State Division of Human Rights fined it, upholding a $45,000 civil penalty against Tessy Plastics Corp. for retaliating against a worker who reported that a coworker had sexually assaulted her.

The Appellate Division, Fourth Department, unanimously confirmed the division's finding that Tessy Plastics unlawfully retaliated against Rebecca A. Beebee. The record showed that she was suspended almost immediately after she reported an allegation that a coworker had sexually assaulted her, and that the company fired her weeks later without letting her return to work. The five-judge panel, in an unsigned memorandum decision, ordered the company to pay Beebee more than $147,000 in lost wages and damages, plus interest.

The decision rejects a state constitutional challenge to the civil fines the division may impose under the Human Rights Law, and it relies on a ruling the Third Department issued earlier this year. The panel also held that a suspension can count as retaliation even when the employee continues to be paid.

Tessy Plastics argued that the penalty, imposed under Executive Law § 297(4)(c)(vi), violated article 1, section 2 of the New York Constitution, which guarantees the right to trial by jury. The panel said the company, as the party attacking the statute, bore the burden of proving the provision invalid beyond a reasonable doubt. "Here, petitioner failed to meet that burden," the court wrote.

Under a 1992 decision of the Court of Appeals, the State Constitution guarantees a jury in cases that were tried to juries under the common law before 1777. It also guarantees a jury in cases to which the Legislature extended the right by statute between 1777 and 1894. Quoting that decision, the panel wrote that the right "also extends to new cases that are analogous to those traditionally tried by a jury."

Tessy Plastics "failed to establish that the present proceeding is analogous to common-law cases traditionally entitled to trial by jury before 1777 or by statutory enactment between 1777 and 1894," the court held, citing the Third Department's decision in Ball v. New York State Department of Health.

The panel quoted its own 2010 decision in Kimmel v. State of New York, which the Court of Appeals affirmed in 2017, for the point that "[a] discrimination claim under the Human Rights Law is an action created by statute, which did not exist at common law." The court added that the law's anti-discrimination provisions were first enacted in 1945. "Petitioner was therefore not entitled to a jury trial under the New York Constitution before a civil penalty could be imposed," the panel wrote.

On the retaliation finding itself, the court applied the substantial-evidence standard, under which a reviewing court asks only whether the record supports the agency's determination. The panel noted that a court may not reweigh the evidence or second-guess the agency's choice where the evidence conflicts.

Tessy Plastics contended that a paid suspension was not an adverse employment action, one of the elements an employee must show to make out a retaliation claim. The panel disagreed, holding that "the SDHR Commissioner rationally concluded that a suspension of employment under these circumstances, even with pay, constituted an adverse employment action."

Such a suspension may well "dissuade[ ] a reasonable worker from making or supporting a charge of discrimination," the court wrote. That is the test the Court of Appeals applied in its 2024 decision in Matter of Clifton Park Apartments, LLC v. New York State Division of Human Rights.

The company's stated reason for firing Beebee was that she had allegedly violated its sexual harassment policy. The panel held that the commissioner rationally found that reason to be a pretext, a cover for retaliation. The record, the court wrote, "contains evidence that other employees who engaged in similar or more significant misconduct were not penalized as harshly."

The court also rejected the company's argument that the division's adjudication counsel lacked authority to prepare the alternative proposed order that the commissioner ultimately adopted. State regulations allow an adjudication counsel to issue such an order, based on the record, in addition to an administrative law judge's recommended order "[w]hen the interests of justice so require."

Quoting a 2025 Third Department decision, the panel acknowledged that "the better practice would have been to explain the 'interests of justice' basis for submitting the alternative proposed order." The omission did not require reversal, the court held, because the interim orders of the judge and the adjudication counsel were "only proposals."

The order directs Tessy Plastics to pay Beebee $82,208.60 in lost wages, with 9% annual interest running from Jan. 1, 2022. It also directs the company to pay her $25,000 for mental anguish and humiliation and $40,000 in punitive damages, each with 9% interest from Oct. 10, 2025.

The company must also pay $88,961 to Beebee's law firm and the $45,000 fine to the state comptroller, both with interest. It must train its supervisors and employees on their obligations under the Human Rights Law to avoid unlawful retaliation.

Tessy Plastics brought the case under Executive Law § 298. Justice Kevin P. Kuehner of state Supreme Court in Onondaga County transferred it to the Appellate Division in an order entered Jan. 20, 2026. The panel granted the division's cross-petition to confirm and enforce its determination.

The panel consisted of Presiding Justice Whalen and Justices Bannister, Nowak, Hannah and Skinner. Tessy Plastics was represented by Christopher J. Harrigan of Barclay Damon LLP. The division was represented by its general counsel, Melissa Franco. Beebee was represented by Mairead E. Connor of the Law Office of Mairead E. Connor, PLLC.

The court held that Beebee, as a prevailing party under Executive Law § 297(10), may also recover attorney's fees for the proceeding in the Appellate Division. It sent the case back to Supreme Court in Onondaga County to determine a reasonable amount.