New York State Expands Whistleblower Protection Law

On January 26, 2022, recent amendments to New York State’s whistleblower statute, New York Labor Law § 740, will go into effect.

New York State’s whistleblower protection law was established with the intent of protecting employees from retaliation when they engage in certain protected activity related to a violation of a rule or law that “creates and presents a substantial and specific danger to the public health or safety or constitutes health care fraud.” The amended law broadens the definitions of protected activity and adverse action and provides an expanded set of individuals with wider reaching protections and remedies.

Expanded Definitions

Previously under the whistleblower statute, an employee was defined as “an individual who performs services for and under the control and direction of an employer for wages or other remuneration.” The amendments to the statute expand the definition of employee to include “former employees” and “independent contractors.” Additionally, the definition of a law, rule or regulation under the statute was expanded to not only include statutes, ordinances, rules, and regulations issued under federal, state, or local law, but also executive orders and any rules promulgated pursuant to that order, as well as any judicial or administrative decision, ruling, or order. The definition of a public body has also been expanded and now includes Congress or any state legislature or local governmental body or their members or employees; any federal, state or local court, or any of their members or employees; any grand or petit jury; any federal, state, or local regulatory, administrative or public agency or authority; any federal, state or local prosecutor or police/peace officer; any federal, state or local department of an executive branch of government; and any division, board, bureau, office, committee, or commission of any of public body covered by this definition.

Protected Activity

Previously an employee was protected from retaliation if the employee: (a) disclosed or threatened to disclose “to a supervisor or to a public body an activity, policy or practice of the employer that is in violation of law, rule or regulation which violation creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud”; (b) provided information to, or testified before, any public body regarding such violation; or (c) objected to or refused to participate in such violation. The amended statute expands what is considered protected activity. Instead of simply protecting disclosures related to public health or safety, or health care fraud, the amended statute protects employees who disclose, or threaten to disclose an activity, policy or practice that the employee reasonably believes is in violation of any law, rule or regulation or that the employee reasonably believes poses a substantial and specific danger to public health of safety.  The amended statute also changes the standard of proof for employees who make such disclosures. Protected disclosures are no longer limited to actual violations. Now, an employee only needs to reasonably believe that there is a violation of law or danger to public health and safety. The shift to a reasonable belief standard, and the expansion of the statute to all laws, will serve to protect a greater number of disclosures.

Further, employees are no longer required to report violations to their employer before disclosing violations to a public body in order to receive protection from retaliation under the statute. Under the amendments, employees are only required to make a “good faith effort” to notify their employer before disclosing the violation. However, employees are not required to give their employer notice where:

• there is imminent and serious danger to public health;

• the employee reasonably believes reporting the violation to the employer would result in the destruction of evidence, concealment, or harm to the employee or another person (including endangering the welfare of a minor);

• or the employee reasonably believes that their supervisor is already aware of the violation and will not correct it.

Retaliatory Actions

Under the amendments, retaliatory actions are no longer limited to discharge, suspension, demotion, or “other adverse employment action taken against an employee in the terms and conditions of employment”. Retaliatory actions now include adverse actions taken by an employer or its agent against an employee or former employee such as:

• adverse employment actions or threats to take such adverse employment actions against an employee in the terms of conditions of employment including but not limited to discharge, suspension, or demotion;

•  actions or threats to take such actions that would adversely impact a former employee's current or future employment; or

•  threatening to contact or contacting U.S. immigration authorities or reporting or threatening to report an employee or an employee’s family or household member’s suspected citizenship or immigration status.

Employee Notice Requirement

Every employer is now required to inform their employees of their protections, rights, and obligations under this law by posting a notice conspicuously in an easily accessible and well-lighted place customarily frequented by employees and applicants for employment. We will continue to monitor this requirement for the publication of a model posting concerning these amendments.

Additional Changes

Under the amended law, plaintiffs claiming violations of this statue are entitled to a jury trial and can recover front pay, civil penalties not to exceed ten thousand dollars, and punitive damages if the violation was willful, malicious, or wanton. Additionally, the statute of limitations has been extended from one year to two years.

Takeaways

Employers should be aware of the broader protections offered to their employees under the amended statute and may consider whether to revise any applicable whistleblower policy accordingly. Additionally, employers should prepare to post a notice of these protections, rights, and obligations in a conspicuous and easily accessible place frequented by their employees. Individuals with questions should feel free to contact Caroline Secola at csecola@fglawllc.com or any other attorney at the Firm.

DISCLAIMER: This alert is provided to clients and friends of the firm for informational purposes only and the distribution of this alert is not intended to, and does not, establish an attorney-client relationship. This alert also does not provide or offer legal advice or opinions on any specific factual situations or matters. This communication may be considered Attorney Advertising. Prior results do not guarantee a similar outcome.