The complaint against Bruce Schanzer was filed by Nancy Mozzachio, the grocery-anchored REIT’s former COO, in New York State Supreme Court in Kings County in November 2017.
“The court concluded that all of Ms. Mozzachio’s claims should be resolved through her pre-existing arbitration case with the company, commenced pursuant to her employment agreement. This dismissal concludes Mozzachio’s personal lawsuit against Mr. Schanzer,” Cedar Realty said in a statement announcing the dismissal.
Cedar Realty declined to comment beyond the statement. Mozzachio referred comment to her attorney, Michael DiChiara, who did not respond to requests for comment as of press time.
Mozzachio began working at Cedar Realty in 2003 as its director of leasing. She worked her way up at the firm and was eventually promoted to COO effective January 1, 2015, replacing the company’s former COO Brenda Walker.
Just more than one year later, Mozzachio was fired “for cause,” according to Cedar. But Mozzachio alleges in her suit that she was terminated for complaining about sexual harassment and her compensation.
As part of her complaint, Mozzachio alleged she was “subjected to a hostile work environment” and was “leered at and subjected to inappropriate comments” by Schanzer, the complaint states.
Mozzachio’s complaint also alleged that other women reported sexual harassment by Schanzer during an investigation at the REIT. Mozzachio suggested the firm acquire a sexual harassment/management software program to train employees about such conduct, but Schanzer was “irate” at the suggestion, according to the complaint.
In terms of compensation, Mozzachio had a base salary of $367,000 in 2015. While this was greater than her predecessor’s salary, it was less than the firm’s CFO Philip Mays. More commonly, COO compensation at REITs is often the second highest at a firm after a CEO’s. Mays was paid a base salary of $381,225 in 2015 and received total compensation of $789,869, according to SEC filings. (With Mozzachio’s firing coming in early 2016, she received no stock awards or bonuses in her one year as the company’s COO.)
According to additional SEC filings, Cedar’s CFO compensation has typically been higher than for its COO. Mays’ total compensation was higher than Mozzachio’s predecessor, Brenda Walker, in 2012, 2013 and 2014. It was also higher than Mozzachio’s successor, Robin Zeigler, in 2016. In 2017, however, Zeigler’s total compensation did exceed May’s due to $560,000 in stock she received. (From 2012 through 2016, May’s base salary also exceeded the company’s COO salary. In 2017, however, both Mays and Zeigler had base salaries of $400,000.)
Mozzachio’s complaint, however, was filed as she was also challenging her termination through an arbitration process. In December, Cedar moved to dismiss the complaint and return to arbitration, claiming the complaint was filed to harass Schanzer. A judge eventually found in Cedar’s favor.
In an interview with NREI in May, Mozzachio said the culture that she witnessed at Cedar Realty obligated her to speak out. “It’s very disturbing to be running a publicly traded company that way,” she said.
Activist investor Snow Park Capital Partners in November called for a probe into the allegations made in the lawsuit against Schanzer, Bloomberg reported. The investigation did not uncover evidence to the claims, leading Jeffrey Pierce, Snow Park’s managing partner, to state that he believes Cedar Realty’s board thoroughly investigated the claims and that he is “comfortable with its findings that the allegations are without merit.”
That statement was made with Cedar Realty in announcing that the REIT would hire a search firm to find a new independent director candidate to be elected to the board at its annual shareholder meeting. As part of the agreement, Snow Park was to have the right to consult on and interview the candidate.
The case was filed amid a wave of public accusations of well-known figures in media, business and government for sexual harassment and abuse, which spawned the #MeToo movement to raise awareness against sexual harassment and assault.
One of the more explosive sexual harassment scandals for the commercial real estate industry has focused on casino mogul Steve Wynn, who has faced numerous allegations of sexual harassment and coercion that came to light as the result of a Wall Street Journal investigation. Wynn has denied the claims, and Wynn Resorts Ltd.’s investigation into the alleged conduct is said to conclude in the third quarter.
Research by NREI found that women in commercial real estate routinely face harassment and unwanted sexual advances. Eighty-seven percent of respondents agreed that sexual harassment occurs in the industry.