Minimal Inference Pleading of Race Discrimination under Section 1981 and NYSHRL: Flanagan v. Girl Scouts of Suffolk County

Minimal Inference Pleading of Race Discrimination under Section 1981 and NYSHRL: Flanagan v. Girl Scouts of Suffolk County

Introduction

Flanagan v. Girl Scouts of Suffolk County, Inc., 23-7900-cv (2d Cir. May 27, 2025) is a Second Circuit summary order addressing pleading standards in employment discrimination and whistleblower claims. Five former employees of the Girl Scouts of Suffolk County (“GSSC”)—including an African-American Director of Technology, Kyle Grant—challenged salary reductions, demotions, and terminations they alleged were motivated by race, retaliation, and improper use of Paycheck Protection Program (“PPP”) funds. The district court dismissed all claims. On appeal, the Second Circuit vacated dismissal of the race discrimination claims under 42 U.S.C. § 1981 and New York Human Rights Law (“NYSHRL”) but affirmed the dismissal of retaliation, False Claims Act (federal and New York), and New York Not-for-Profit Corporation Law claims.

Summary of the Judgment

  • The district court had granted Defendants’ Rule 12(b)(6) motion in full.
  • On appeal, the Second Circuit:
    • VACATED the dismissal of the § 1981 and NYSHRL race discrimination claims brought by Plaintiff-Appellant Kyle Grant (an African-American employee).
    • AFFIRMED the dismissal of:
      • Section 1981 and NYSHRL retaliation claims;
      • Federal and New York False Claims Act claims;
      • New York Not-for-Profit Corporation Law § 715-b claim.
    • REMANDED the case for further proceedings on the surviving discrimination claims.

Analysis

1. Precedents Cited

The Court relied on—and distinguished—numerous Second Circuit and Supreme Court decisions:

  • Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009): Require “plausible” factual allegations to survive a Rule 12(b)(6) motion.
  • Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72 (2d Cir. 2015): A complaint need only “nudge” its claim “across the line from conceivable to plausible.”
  • Comcast Corp. v. National Ass’n of Afr. Am.–Owned Media, 589 U.S. 327 (2020): § 1981 requires “but-for” causation—that race must be a but-for cause of the adverse action.
  • Ruiz v. County of Rockland, 609 F.3d 486 (2d Cir. 2010): Disparate treatment supports an inference of discrimination.
  • Littlejohn v. City of New York, 795 F.3d 297 (2d Cir. 2015): Minimal inference of discriminatory motivation suffices at the pleading stage.
  • Qorrolli v. Metropolitan Dental Associates, 124 F.4th 115 (2d Cir. 2024): NYSHRL post-2019 amendments align with the liberal NYCHRL pleading standard.
  • Chorches for Bankr. Est. of Fabula v. AMR, 865 F.3d 71 (2d Cir. 2017): Elements of a false-claims retaliation claim under the FCA.

2. Legal Reasoning

a. Race Discrimination under § 1981 and NYSHRL

  • Plaintiff Grant alleged:
    • He is African-American (protected class).
    • Defendant CEO Mastrota targeted him within her first week—predicting he would be among the first fired.
    • He was demoted without cause, and his salary cut (40%) was disproportionately severe compared to Caucasian employees.
    • He was subjected to disparaging remarks, differential treatment of similarly situated Caucasian coworkers, and repeated singling-out at meetings.
  • Under Twombly/Iqbal and Vega, these factual allegations “plausibly give rise to an inference of unlawful discrimination.”
  • “But-for” causation (§ 1981) is met if race was “one but-for cause” of the adverse acts. Disparate treatment and comparative salary data suffice to nudge the claim into plausibility.
  • The amended NYSHRL (effective August 12, 2019) adopts an even more liberal pleading standard—NYCHRL-style—and thus the state‐law claims survive if the federal claims do.

b. Retaliation

  • Plaintiffs alleged retaliation for:
    • Sending a July 2020 whistleblower letter complaining of discriminatory pay cuts.
    • Defending coworker Grant against the CEO’s actions.
  • To plead § 1981 retaliation, one must show a causal link between protected activity and termination—“but-for” causation.
  • The Court found:
    • No direct or circumstantial evidence that the Board terminated Plaintiffs because of that letter.
    • The Board initially promised no reprisals, conducted an independent investigation, and then Mastrota and Brown departed voluntarily.
    • The six-month interval and intervening separation negotiations break the causal chain.
  • Under the more lenient NYSHRL standard, causation must be “at least in part” motivated by retaliation—but Plaintiffs still failed to allege any actionable nexus.

c. False Claims Act and New York False Claims Act

  • Plaintiffs claimed they were fired for reporting that GSSC’s PPP application contained false information.
  • Protected activity under the FCA requires an allegation that the relator reported a “false or fraudulent claim” with requisite scienter.
  • The July 2020 letter merely warned that employees might have to be paid back; it did not expressly call out an FCA violation or allege knowing fraud.
  • Therefore, no protected activity; and in any event, no causal link to termination.

d. New York Not-for-Profit Corporation Law § 715-b

  • This statute requires non-profits to adopt and oversee a whistleblower policy.
  • Plaintiffs argued the Board’s post-letter investigation was in bad faith and paved the way for later retaliation.
  • The Court assumed, without deciding, a private right of action exists—but held no actionable violation was pled:
    • The policy was adopted and an investigation conducted;
    • No facts showed the investigation was a sham;
    • No causal link to Plaintiffs’ terminations.

3. Impact

Flanagan clarifies key points of federal and state employment pleading doctrines:

  • Affirms that minimal “bits and pieces” of comparative treatment can carry § 1981 and NYSHRL discrimination claims past a motion to dismiss.
  • Reiterates that retaliation claims require a plausible causal link—remote timing and intervening events weaken any inference.
  • Highlights that whistleblower letters must explicitly allege falsity and scienter to trigger FCA or NYFCA protection.
  • Leaves open—but narrows—the scope of private suits under N-PCL § 715-b.

Complex Concepts Simplified

“Plausible pleading” (Twombly/Iqbal)
The complaint must contain enough factual detail to move a claim from “possible” to “plausible,” not merely restate legal conclusions.
“But-for causation” (§ 1981)
Plaintiff must show that, if not for discrimination, the adverse act (e.g., demotion or firing) would not have occurred.
“Disparate treatment”
Showing an employee in the same position but outside the protected class was treated more favorably helps infer discriminatory intent.
“Protected activity” (FCA)
Under the False Claims Act, you must allege that you reported or attempted to stop an actual false claim—mere general concerns about government funds are not enough.
“Summary Order”
A Non-precedential decision by the Second Circuit; citation is permitted but it does not create binding law.

Conclusion

In Flanagan v. Girl Scouts of Suffolk County, the Second Circuit drew a clear line between:

  • The modest yet meaningful factual showing necessary to sustain race discrimination claims under § 1981 and the expanded NYSHRL; and
  • The exacting requirements for retaliation, FCA whistleblower, and N-PCL claims—especially the need for specific allegations of causation and scienter.

As a result, employment plaintiffs will feel empowered to plead minimal—but concrete—evidence of disparate racial treatment, while defendants can press early dismissal of retaliation and whistleblower claims lacking a tight factual and temporal nexus. On remand, the district court will proceed only on Grant’s race discrimination counts, shaping the pleading landscape in the Second Circuit for years to come.

Case Details

Year: 2025
Court: Court of Appeals for the Second Circuit

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