When the Legal Process Becomes the Retaliation

The First Department’s Decision in Denson v. Donald J. Trump for President, Inc. Demonstrates How Employers Can Weaponize Lawsuits, Arbitration, and Other Lawful Procedures to Punish Employees for Exercising Their Civil Rights

I. Introduction: The Right to Take Legal Action Does Not Include the Right to Retaliate

An employer may have the contractual right to initiate arbitration, the statutory authority to pursue disciplinary charges, or the procedural right to commence litigation. However, the existence of those rights does not give an employer unrestricted authority to use the legal process to punish an employee for complaining about discrimination, sexual harassment, or other unlawful employment practices. The distinction is particularly important because retaliation frequently occurs under the appearance of legitimate institutional action, with employers invoking workplace regulations, contractual obligations, disciplinary procedures, or litigation remedies to justify conduct that may have been motivated by an employee’s exercise of protected rights.

The problem arises when courts and litigants confuse the legal authority to undertake an action with the motivation for undertaking it. An employer’s ability to identify a contractual provision, disciplinary regulation, or statutory mechanism authorizing a particular proceeding does not necessarily establish that the proceeding was commenced for a legitimate purpose. A legal process that serves an entirely proper function in one circumstance may become an instrument of retaliation in another, depending on the circumstances surrounding its invocation and the evidence concerning the employer’s actual motivation.

On October 22, 2026, the Appellate Division, First Department, addressed this distinction in Denson v. Donald J. Trump for President, Inc., 2026 N.Y. Slip Op. 06197 (1st Dep’t Oct. 22, 2026). The Court unanimously reversed an order granting summary judgment to Donald J. Trump’s former presidential campaign organization on a retaliation claim brought under the New York City Human Rights Law (NYCHRL). The underlying controversy concerned Jessica Denson, a former director of Hispanic engagement for Trump’s 2016 presidential campaign, who commenced litigation alleging discrimination and a hostile work environment. Approximately one month later, the campaign initiated arbitration against her, demanding $1.5 million in damages for allegedly violating a nondisclosure agreement through allegations contained in her discrimination complaint.

The First Department did not conclude that the campaign had conclusively engaged in retaliation. Instead, it determined that the evidence developed during discovery raised material factual questions concerning whether the campaign’s asserted contractual justification was pretextual. The decision illustrates an important principle of retaliation law: an employer cannot necessarily obtain dismissal of a retaliation claim merely by establishing that it possessed the formal legal authority to undertake the challenged action. Where the evidence permits a finding that retaliatory animus was a motivating factor, the employer’s invocation of an otherwise lawful process does not conclusively establish the legitimacy of its conduct.

II. A $1.5 Million Arbitration Demand Following a Discrimination Lawsuit

The chronology in Denson is important because it places the campaign’s arbitration demand within the broader context of the employee’s protected activity. In November 2017, Denson commenced litigation against the campaign asserting claims that included discrimination, hostile work environment, and defamation. Approximately one month later, the campaign filed a demand for arbitration alleging that her discrimination complaint violated the parties’ nondisclosure agreement and seeking $1.5 million in damages. Denson subsequently asserted a supplemental claim for post-employment retaliation under the NYCHRL, contending that the arbitration proceeding was not simply an effort to enforce contractual obligations but an attempt to punish her for exercising her statutory rights.

The financial consequences of the campaign’s response were substantial. An employee pursuing discrimination litigation may already confront unemployment, reputational injury, diminished financial resources, and the expense of challenging an employer with considerably greater institutional resources. When the employer responds by initiating a separate proceeding seeking seven figures in damages, the consequences extend beyond the ordinary costs of employment litigation. Such a proceeding may impose additional legal expenses, increase financial exposure, and create substantial pressure on the employee to abandon or compromise the underlying discrimination claims. Those potential consequences do not establish retaliation by themselves, but they provide essential context for evaluating whether the employer’s conduct was reasonably likely to deter protected activity.

The controversy was further complicated by subsequent judicial determinations concerning the nondisclosure agreement and the arbitration proceedings. In Denson v. Donald J. Trump for President, Inc., 530 F. Supp. 3d 412 (S.D.N.Y. 2021), the United States District Court for the Southern District of New York held that the agreement was invalid and unenforceable. However, the invalidity of the agreement did not automatically establish that the campaign commenced arbitration with retaliatory intent. The legal sufficiency of the underlying contractual claim and the motivation for asserting it remained separate questions requiring independent examination.

This distinction is essential to understanding the October 2026 decision. An unsuccessful legal proceeding is not necessarily retaliatory, just as an otherwise authorized proceeding is not necessarily legitimate. The relevant inquiry concerns whether the employer invoked the legal process because the employee engaged in protected activity. In Denson, that inquiry required consideration of the campaign’s explanations for commencing arbitration, the evidence supporting its claimed damages, and whether its conduct reflected a broader pattern of responding to discrimination allegations through contractual enforcement proceedings.

III. The First Department Rejects the Proposition That a Claimed Contractual Right Automatically Defeats Retaliation

The campaign maintained that it commenced arbitration because it believed Denson had violated the nondisclosure agreement. That explanation supplied an ostensibly legitimate contractual basis for its conduct, but it did not resolve whether retaliation also motivated the decision. The First Department applied the standard articulated in Watson v. EmblemHealth Services, 158 A.D.3d 179, 182–83 (1st Dep’t 2018), recognizing that a causal connection between protected activity and an employer’s subsequent conduct may be established where retaliatory animus was a motivating factor in the challenged action.

The motivating-factor standard is particularly consequential because employers may act for several reasons simultaneously. An employer may identify a legitimate contractual concern, a possible disciplinary infraction, or a workplace policy violation while also being motivated by hostility toward an employee’s discrimination complaint. The existence of a permissible consideration does not necessarily eliminate the impermissible one. Accordingly, the legal inquiry cannot end merely because the employer articulates a facially legitimate explanation. Where the employee develops evidence suggesting that the explanation is inconsistent, selectively applied, or otherwise pretextual, the employer’s actual motivation remains a factual question.

The First Department determined that the campaign satisfied its initial burden of establishing a nonretaliatory explanation for commencing arbitration. Nevertheless, Denson produced sufficient evidence to raise a triable issue concerning whether that explanation was pretextual. This distinction is particularly important at the summary judgment stage, where an employer’s explanation cannot be treated as conclusive merely because it has been presented through an affidavit or supported by the existence of a contractual provision. The record must be examined to determine whether a factfinder could reasonably conclude that the asserted justification concealed retaliatory motivation.

Although Denson concerned contractual arbitration, its reasoning has broader implications for employment disputes involving formal disciplinary charges, administrative investigations, and employer-initiated litigation. Employers routinely defend these actions by emphasizing that management possessed the authority to initiate them. However, possessing discretionary authority and exercising that discretion lawfully are different matters. Where an employee alleges that a proceeding was initiated because of protected activity, the employer’s formal authority does not eliminate the need to examine the surrounding circumstances, the decision-makers’ explanations, and the evidence concerning pretext.

IV. The Decision-Maker’s Deposition Exposed the Weaknesses in the Employer’s Explanation

One of the most instructive aspects of Denson concerns the distinction between an employer’s carefully articulated litigation position and the actual reasoning of the individual responsible for the challenged decision. The campaign initially relied on an affidavit from its former chief operating officer, Michael S. Glassner, who asserted that arbitration was commenced because Denson’s discrimination complaint contained disparaging and sensational allegations extending beyond what was necessary to state viable discrimination claims. That explanation suggested that the campaign had evaluated the allegations individually, distinguished legitimate pleading requirements from unnecessary disclosures, and pursued arbitration to enforce a contractual obligation rather than punish Denson for filing suit.

However, Glassner’s subsequent deposition substantially undermined that explanation. He testified that the decision to commence arbitration was his personally and that he considered every substantive paragraph of Denson’s complaint to violate the nondisclosure agreement. When questioned about his reasoning, he could not adequately explain how he distinguished permissible allegations from impermissible ones or identify which particular allegations were unnecessary to pursue the discrimination lawsuit. Those deficiencies were consequential because the campaign’s asserted justification depended on the proposition that Denson had exceeded the legitimate boundaries of her discrimination claims. If the individual who authorized arbitration could not articulate those boundaries, a factfinder could reasonably question whether the purported distinction actually motivated the decision.

The First Department also examined the campaign’s demand for $1.5 million in damages, particularly its inability to establish a corresponding economic injury. Although Glassner testified that the figure originated from discussions with counsel, he acknowledged that he could not determine whether the campaign had suffered any monetary loss because Denson commenced her lawsuit. A substantial damages demand is not inherently improper, and an employer does not necessarily engage in retaliation by pursuing contractual remedies that carry significant financial consequences. Nevertheless, when an employer demands an extraordinary amount from an employee for pursuing discrimination litigation but cannot identify the resulting financial injury, that discrepancy may support an inference that the demand was intended to discourage or punish protected activity rather than compensate for an actual loss.

The Court further considered evidence that the campaign had initiated similar proceedings against other former employees who had alleged discrimination. That evidence was significant because it permitted the arbitration demand to be examined as part of a broader course of conduct rather than as an isolated contractual dispute. The combination of inconsistent explanations, an inadequately supported damages demand, and comparable enforcement proceedings presented factual questions that could not properly be resolved in the campaign’s favor on summary judgment. These circumstances also demonstrate why examining the actual decision-maker is often indispensable in retaliation litigation. An employer’s institutional explanation may appear legitimate until the individual responsible for the decision is required to identify the evidence considered, explain the reasoning employed, and reconcile that explanation with the contemporaneous record.

V. The Broader Implications for Disciplinary Charges, Administrative Investigations, and Employer-Initiated Litigation

Although Denson arose from a private employer’s attempt to enforce a nondisclosure agreement, its reasoning provides a useful framework for evaluating retaliation allegations involving other legal and administrative proceedings. This is particularly relevant in public employment, where disciplinary authority is frequently exercised through formal procedures established by statute, regulation, or collective bargaining agreement. An employer may possess unquestioned authority to investigate alleged misconduct, prefer disciplinary charges, or pursue termination, but that authority does not necessarily resolve whether the particular proceeding was initiated because an employee complained about discrimination or otherwise engaged in protected activity.

Consider a public employee who files a discrimination complaint and subsequently becomes the subject of an internal investigation or formal disciplinary proceeding. The employer may defend its conduct by asserting that the investigation was authorized, that the charges were procedurally proper, or that management retained discretion to pursue discipline. Those assertions address the employer’s authority but do not necessarily establish the legitimacy of its motivation. The retaliation inquiry must also examine whether comparable employees were treated differently, whether established practices were disregarded, whether the employer’s explanations changed during the proceedings, and whether the decision-makers possessed a genuinely independent evidentiary basis for taking action. The central issue is not simply whether the employer could commence the proceeding, but whether it did so for a retaliatory reason.

The decision is equally instructive when employers respond to protected activity by imposing additional legal or financial burdens through threatened litigation, contractual enforcement actions, or professional complaints. These measures may be particularly effective forms of retaliation because they can impose consequences without requiring the employer to make an express admission of discriminatory or retaliatory intent. An employee who challenges unlawful workplace conduct may be required to defend a separate proceeding, incur substantial legal expenses, or confront a threatened financial penalty while simultaneously pursuing the underlying discrimination claims. Under the NYCHRL, the question is whether the challenged conduct was reasonably likely to deter protected activity and whether retaliatory motivation contributed to the employer’s decision.

The statutory distinction between the New York State Human Rights Law (NYSHRL) and the NYCHRL must nevertheless be preserved. Executive Law § 296(7) independently prohibits retaliation for protected activity, while Administrative Code § 8-107(7) establishes the corresponding protections under the NYCHRL. Although both statutes prohibit retaliation, Denson directly addressed an NYCHRL claim, and its particular holding should not be presented as automatically resolving every issue arising under the NYSHRL. Its broader analytical significance lies in demonstrating how the circumstances surrounding an employer’s use of otherwise authorized procedures may establish a factual basis for challenging the employer’s asserted motivation.

For practitioners, the decision reinforces the importance of developing a complete evidentiary record rather than allowing the employer’s formal characterization of its conduct to dictate the litigation. The relevant discovery should examine who authorized the challenged proceeding, when the decision was made, what information was available at that time, whether alternatives were considered, how comparable situations were handled, and whether the employer can substantiate the consequences it sought to impose. These inquiries may reveal that the stated legal justification was genuinely responsible for the decision, or they may expose inconsistencies permitting a finding of retaliatory animus. Either way, Denson demonstrates why the existence of procedural authority cannot substitute for an examination of the actual decision-making process.

VI. Conclusion: The Legal Process Cannot Become a Shield for Retaliation

The First Department’s decision in Denson reinforces an important limitation on the use of legal proceedings in employment disputes. Employers remain entitled to enforce legitimate contractual obligations, investigate misconduct, pursue disciplinary charges, and seek judicial or administrative relief. However, those rights do not confer immunity from retaliation claims merely because the employer chooses to implement its response through an established legal mechanism. Where the evidence permits a finding that an employer commenced a proceeding because an employee exercised protected rights, the formal legitimacy of the mechanism does not conclusively establish the legitimacy of the employer’s conduct.

The Court’s ruling was appropriately confined to the summary judgment record. It did not determine that the campaign’s arbitration demand was conclusively retaliatory, nor did it establish that every unsuccessful contractual enforcement action constitutes unlawful retaliation. Rather, the Court recognized that the campaign’s inconsistent explanations, inability to substantiate its damages demand, and evidence of similar proceedings presented factual questions concerning whether its asserted justification was pretextual. Those questions warranted resolution through the ordinary factfinding process rather than dismissal as a matter of law.

The broader significance of Denson lies in its recognition that retaliation may be implemented through institutions and procedures ordinarily associated with lawful dispute resolution. An employer need not terminate an employee, reduce compensation, or expressly threaten professional consequences to engage in potentially actionable retaliation. Depending on the evidence and applicable statutory protections, the employer’s decision to initiate a legal proceeding may itself constitute the retaliatory act. That principle is especially consequential where an employee’s discrimination complaint is followed by disciplinary charges, contractual enforcement proceedings, or litigation imposing substantial financial and professional burdens.

The law does not permit employers to transform otherwise lawful procedures into instruments of retaliation merely by invoking the authority under which those procedures operate. The relevant inquiry remains whether the employer exercised its authority for a legitimate purpose or whether retaliation was a motivating factor in its decision. By preserving that distinction, Denson provides meaningful guidance for evaluating the increasingly sophisticated ways in which employers may respond to employees who exercise their civil rights.

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