Labor & Employment Law Daily Wrap Up, INDIVIDUAL RIGHTS—2d Cir.: Employers bringing associational rights claims challenging NY’s reproduction rights law face high bar, (Jan 3, 2025)

By Marjorie Johnson, J.D.

Having previously ruled that a pregnancy center plausibly alleged the law burdened its right to expressive association, the Second Circuit held that employers have a stricter burden than voluntary organizations in bringing such claims.

Three religious organizations won reinstatement of their constitutional claims alleging that a New York law that prevents employers from discriminating against employees based on their reproductive health decisions violated their right to freedom of expressive association. Vacating the district court’s dismissal of their claims, the Second Circuit remanded for a determination of whether they each plausibly alleged that the law burdened their distinct associational rights by forcing them to “employ individuals who act or have acted against” their “very mission” and with respect to specific employment decisions. The appeals court also vacated the district court’s issuance of a permanent injunction barring enforcement of the law’s notice provision, concluding the state’s requirement that employers that use a handbook include a notice of employee rights and remedies under the law was not unconstitutional as to all employers in all situations (CompassCare v. Hochul, Nos. 22-951-cv (L) and 22-1076-cv (2d Cir. Jan. 2, 2025)).

The law. The three religious employers—a pro-life pregnancy center, an organization comprised of pro-life pregnancy centers, and a Baptist church—brought this lawsuit challenging the constitutionality of New York Labor Law Section 203-e, which prohibits “discrimination based on an employee’s or a dependent’s reproductive health decision making,” and in particular prohibits employers from discriminating or retaliating “with respect to compensation, terms, conditions, or privileges of employment.” The Act also contains a notice provision that requires an employer that chooses to issue an employee handbook to “include in the handbook notice of employee rights and remedies under this section.”

The lawsuit. The employers asserted that the Act unconstitutionally infringed upon their First Amendment freedoms of expressive association, speech, and religion by “forcing them to employ and associate with those persons who do not share or live by the organizations’ beliefs regarding abortion, contraception, and the impropriety of sexual relations outside the context of a marriage between a man and a woman.” They also argued that the notice provision compelled speech in violation of the First Amendment.

In the decision below, the district court granted the state’s motion to dismiss all their constitutional claims, finding in particular for purposes of appeal that the burdens on their expressive activity were “incidental.” The court also permanently enjoined enforcement of the notice provision as unconstitutional.

Slattery v. Hochul. The parties’ appeal was held in abeyance pending the Second Circuit’s decision in Slattery v. Hochul, a case brought by a crisis pregnancy center alleging similar constitutional challenges to the Act. The Second Circuit affirmed the dismissal of the employer’s speech, exercise, and vagueness claims, but reversed as to its expressive association claim and remanded for further proceedings. Significantly, Slattery held that an employer may state a plausible associational rights claim by asserting that the Act forces it to employ individuals “who act or have acted against the very mission of its organization.”

Employers’ right to expressive association. In light of Slattery, the Second Circuit vacated the dismissal of the employers’ claims in the instant action alleging that the Act violated their freedom of expressive association by prohibiting them from terminating or refusing to hire a person who has made a reproductive health decision (such as using contraception or having an abortion) that conflicted with their beliefs. However, the issues on appeal did not end there since neither Slattery nor any opinion by the Supreme Court addressed the state’s argument that employers do not have the same expressive-association rights as voluntary membership organizations, though Slattery did foreclose the state’s contention that employers have no freedom of expressive association with respect to their relationships with paid employees.

Higher burden. After a careful analysis, the Second Circuit concluded that employers do not enjoy the same scope of expressive-association rights as voluntary membership organizations. Meaningful differences include that employees rely on their jobs for their livelihoods, and termination of or refusal to hire an employee can have significantly greater impact than exclusion from a voluntary association. Furthermore, significant power imbalances often exist between employers and employees that may not be present in voluntary associations, requiring courts to ensure that the right to expressive association does not serve as a shield for unlawful discrimination.

“In light of these significant differences between voluntary associations and employment relationships, and the long and complex history of regulation of employment relationships, the Supreme Court’s decisions regarding the freedom of expressive association enjoyed by voluntary associations do not apply neatly to employers,” explained the appeals court.

Thus, to sustain their challenge to the Act, each employer must adequately allege (and eventually prove) that the Act “threatens its very mission not only in a vague and generalized sense, but in the context of a specific employment decision.” This would seemingly require an assessment of the employee’s responsibilities—including whether their position was client-facing or involved expressly or implicitly speaking for the organization—and the employee’s particular conduct or attribute that rendered employment in their particular position a threat to the employer’s mission. On remand, each employer would need to meet this standard separately and independently.

Injunction improper. The Second Circuit also vacated the district court’s grant of summary judgment to the employers as to the Act’s notice provision and issuance of a permanent injunction barring its enforcement. Applying the rational basis review standard, the appeals court concluded that the provision “reasonably related to the State’s interest in preventing deception of” employees as to their statutory rights that may—or may not—apply to them. Indeed, “this sort of disclosure requirement is common and well-established in federal and state employment laws.”

Moreover, the provision was not unduly burdensome since it did not impair the employers’ ability to convey their own beliefs or directly contradict their core mission and message. “Plaintiffs remain free to oppose the Act, and the policy judgments that underlie it, and have many avenues to do so.”

The Second Circuit further clarified, however, that if any plaintiff succeeds on remand in stating a plausible expressive-association claim, the district court must determine whether the required notice was factually accurate and not misleading as applied to each employer under the rational basis review standard.

The case is Nos. 22-951-cv(L) and 22-1076-cv.

Judge: Merriam, S.

Attorneys: John J. Bursch (Bursch Law) for CompassCare. Laura Etlinger, Office of the Attorney General, for Kathy Hochul.

Companies: CompassCare; National Institute of Family and Life Advocates; NIFLA; First Bible Baptist Church

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