Misperceived Criminal Records and Employer Liability:
A Detailed Commentary on Matter of Janitronics, Inc. v. New York State Division of Human Rights (2025)

1. Introduction

Matter of Janitronics, Inc. v. New York State Division of Human Rights (2025 NY Slip Op 03682) confronts two recurrent questions in New York employment-discrimination jurisprudence:

• Under what circumstances may a private employer rescind a job offer after discovering additional background-check information?
• How much procedural latitude does the Division of Human Rights (SDHR) possess when it disagrees with an Administrative Law Judge’s (ALJ) recommendation?

The case arose after Janitronics, a staffing contractor for Regeneron Pharmaceuticals, revoked an offer to applicant Theresa Donohue when a background check revealed a 2015 reincarceration that Donohue had not mentioned. Donohue complained to SDHR, alleging discrimination based on her earlier burglary convictions. An ALJ recommended dismissal, but the Division’s adjudication counsel, invoking 9 NYCRR 465.17(c)(2), issued an alternative proposed order sustaining the complaint. The Commissioner adopted that alternative order, imposed back pay, compensatory damages, and a civil fine.

2. Summary of the Judgment

The Appellate Division, Third Department:

1. Procedural Holding: Declined to consider Janitronics’ claim that SDHR lacked “interests-of-justice” grounds for issuing an alternative proposed order because the company failed to raise that objection before the agency, as required by Executive Law § 298. Even if considered, the Court held, the omission of an explicit written rationale did not invalidate SDHR’s authority.
2. Substantive Holding: Found substantial evidence supporting SDHR’s determination that Janitronics unlawfully discriminated under Executive Law § 296(15) by rescinding the offer on the mistaken belief that Donohue had an undisclosed conviction in 2015. A parole violation is not a “criminal conviction,” and discrimination based on an erroneously perceived conviction is still prohibited.
3. Penalty Review: Upheld $20,000 for mental anguish, $133,860 in lost wages, and a $10,000 civil fine, finding the sanction not “shocking to one’s sense of fairness.” The Court also refused to entertain a constitutional challenge to Executive Law § 297(4)(c)(vi) (agency-imposed fines without jury trial) because it, too, was not raised below.
4. Disposition: Determination confirmed, petition dismissed, cross-petition for enforcement granted.

3. Analysis

3.1 Precedents Cited and Their Influence

• Matter of Wegman v. NYS Department of Health (2024) – Reiterated that objections not raised in the agency proceed-ings are unpreserved under Executive Law § 298. This fortified the Court’s refusal to review Janitronics’ procedural objection.
• State Division of Human Rights v. Sorrento Cheese Co. (1985) and Matter of NYC DOC v. White (1990) – Established that discrimination based on an erroneously perceived criminal conviction is as unlawful as discrimination based on an actual conviction. The Court leaned on these cases to affirm SDHR’s finding.
• Matter of Pageau v. Tolbert (2003) – Clarified that ALJ recommendations are non-binding proposals. The Court used this to underscore that the Commissioner is the ultimate finder of fact.
• Haug v. SUNY at Potsdam (2018) and Clifton Park Apartments v. SDHR (2024) – Defined the “substantial evidence” test and reinforced judicial deference to SDHR’s fact-finding.
• SEC v. Jarkesy (U.S. 2024) – Cited by petitioners for a jury-trial argument, but distinguished because it involved federal law and, more importantly, was not preserved below.

3.2 The Court’s Legal Reasoning

A. Preservation Doctrine
Executive Law § 298 bars courts from considering objections not first raised before SDHR unless “extraordinary circumstances” exist. Janitronics objected to the merits of the alternate order but never contested adjudication counsel’s use of the “interests of justice” trigger. That omission proved fatal.

B. Agency Rule-Making Authority
Executive Law § 297(4)(d) authorizes SDHR to craft procedural rules. 9 NYCRR 465.17(c) empowers adjudication counsel to issue an alternative proposed order. The Court deemed this a legitimate delegation, noting the Commissioner’s final decision-making role ensures due process.

C. Substantial Evidence Review
The Court stressed that it cannot “re-weigh” evidence. Winter (Janitronics’ recruiter) admitted she “didn’t know” the basis for the 2015 incarceration but still revoked the offer. SDHR’s inference—that Winter assumed an undisclosed conviction—was “reasonable and plausible,” satisfying the minimal substantial‐evidence threshold.

D. Parole Violation ≠ Conviction
Citing CPL 1.20 and Penal Law § 10.00, the Court reaffirmed that a parole violation is not a new criminal conviction. Thus, the 2015 reincarceration could not legally justify rescission unless separate, permitted grounds existed (e.g., job-related falsification).

E. Sanction Proportionality
Applying the “shocks the conscience” standard, the Court upheld the combined $163,860 remedy, contrasting it with statutory maxima ($50,000 civil fine plus uncapped compensatory damages) to show the award fell well within legislative parameters.

3.3 Likely Impact on Future Cases

• Employer Background-Check Protocols: Organizations must distinguish convictions from arrests, parole violations, or administrative sanctions. Blanket revocations—especially without direct questioning—risk liability.
• Agency Procedure: SDHR’s alternative proposed order device survives scrutiny even when the “interests of justice” rationale is not spelled out. Expect greater use of this mechanism where the agency wishes to depart from an ALJ’s view.
• Litigation Strategy: Parties before SDHR must preserve every procedural and constitutional objection at the agency level, or risk forfeiture on judicial review.
• Constitutional Challenges to Agency Fines: Although Jarkesy raises broader separation-of-powers concerns, New York courts may regard those arguments as waivable if not timely raised. Practitioners will likely lodge “placeholder” objections pending further appellate guidance.

4. Complex Concepts Simplified

Executive Law § 296(15)

The section of New York’s Human Rights Law that forbids employers from denying employment based solely on a person’s criminal convictions, unless one of the narrow exceptions in Correction Law Article 23-A applies.

Correction Law Article 23-A

A statutory framework requiring employers to consider factors such as time elapsed and rehabilitation when evaluating applicants with convictions.

Substantial Evidence

A low standard of proof in administrative law: evidence a reasonable person could accept as sufficient, even if other conclusions are possible.

Alternative Proposed Order (9 NYCRR 465.17(c)(2))

An internal SDHR device allowing adjudication counsel to craft its own recommendation—contrary to the ALJ’s—when “the interests of justice so require.” Parties may file objections before the Commissioner issues a final decision.

Parole Violation vs. Criminal Conviction

A parole violation is an administrative breach of release conditions; it is not a new criminal conviction unless a separate crime is prosecuted and proven.

5. Conclusion

The Third Department’s decision in Janitronics crystallizes two guiding principles:

1. An employer that mistakenly believes an applicant concealed a criminal conviction can still violate the Human Rights Law; the perception of criminality alone triggers statutory protection.
2. Procedural objections—whether to SDHR’s use of an alternative proposed order or to the constitutionality of agency-imposed fines—must be lodged during the agency phase, or they are lost on appeal absent “extraordinary circumstances.”

Practically, the ruling urges employers to adopt meticulous, transparent background-check practices and cautions litigants to preserve every argument before SDHR. Procedurally, it cements the Division’s flexibility to override ALJ recommendations through alternative proposed orders, reinforcing the Commissioner’s central role in New York’s anti-discrimination enforcement architecture.