New York Expands Protections for Whistleblowers
Whistleblowers are essential for protecting the health and safety of the workplace and reporting fraud, waste, or corruption affecting the citizens of New York.
However, without critical laws protecting those brave individuals, there is no question that individuals would face dangerous work conditions, retaliation, and more.
The significance of whistleblower protections became even more apparent during the COVID-19 pandemic, as price gouging, consumer fraud, employment issues, and discrimination plagued our state.
Fortunately, New York amended its whistleblower laws, enhancing protections for whistleblowers by making it easier for individuals to bring retaliation claims and protecting more workers who report suspected wrongdoing.
New York Whistleblower Laws
In October 2021, Governor Kathy Hochul amended Section 740 of the New York Labor Law, expending protections against employer whistleblower retaliation.
Before the amendments, New York law required employees to have knowledge of an actual violation that also presented a “substantial and specific danger to the public health and safety,” and an employee had to provide their employer a reasonable opportunity to correct the alleged violation before reporting the violating activity or policy.
Thankfully, recent amendments to Labor Law § 740 have broadened the scope of prohibited employer retaliatory activity in several significant ways.
7 Ways New York Enhanced Protections for Whistleblowers
Effective January 26, 2022, employers and employees should take note of the following expansions on New York whistleblower protections:
1. Individuals protected. Formerly, the law only protected current employees. After the amendments, the definition of an “employee” is now “an individual who performs services for and under the control and direction of an employer for wages or other remuneration, including former employees… [and] independent contractors.”
2. Protected activities. The former law protected employees that reported an actual violation of a law, rule, or regulation.
Moreover, that violation had to create and present a substantial and specific danger to public health or safety.
Now, anti-retaliation protections apply when an individual reasonably believes that the activity, policy, or practice violates a law, rule, or regulation or poses a substantial and specific danger to public health or safety.
“Law, rule, or regulation” was amended to include federal, state, and local statutes and executive orders; rules or regulations promulgated under statutes or executive orders; and judicial or administrative decisions.
Protections for testifying before various bodies have been expanded to include persons providing testimony or information before an executive branch (federal, state, or local).
Previously, protections were limited to testimony before the legislature (federal, state, or local), court or grand jury, administrative agencies, or law enforcement agencies.
3. Prohibited actions. Labor Law § 740 expanded the meaning of “retaliatory action.” Formerly, it only included discharge, suspension, demotion, or adverse actions regarding the terms and conditions of the whistleblower’s employment.
Now, retaliatory action consists of any “adverse action taken by an employer or his or her agent to discharge, threaten, penalize, or in any other manner discriminate against” a whistleblower, even if the action is not related to the individual’s employment.
The following are now considered retaliatory conduct: (1) adverse employment actions or threats of adverse actions, including discharge, suspension, or demotion; (2) actions or threats to act that would impact a former employee’s current or future employment; and (3) contacting or threatening to contact U.S. immigration authorities related to the citizenship or immigration status of an employee or their family member.
4. Statute of limitations. The new law extends the statute of limitations for filing a claim from one year to two years.
5. Remedies. The former law limited a whistleblower’s remedies to injunctive relief; reinstatement; compensation for lost wages, benefits, other remuneration; and reasonable costs.
Now, individuals may also pursue a jury trial, front pay instead of reinstatement, civil penalties up to $10,000, and punitive damages.
In addition, an employer may be entitled to attorneys’ fees if a court determines the employee’s claim was not based in law or fact.
6. Notification requirements. The former law required a whistleblower to notify their employer of the violation and provide a reasonable opportunity to remedy the situation.
This requirement has been amended to require employees to make a “good-faith effort.” However, there are five exceptions where employer notification is not required:
(1) imminent or serious danger to public health or safety; (2) employee believes reporting to their supervisor would lead to the destruction of evidence or other concealment practices; (3) concealment activity of an employer would lead to endangering the welfare of a minor; (4) reporting to a supervisor would result in physical harm to the employee or another; or (5) employee reasonably believes supervisor is already aware of the violation and will not correct the activity, policy, or practice.
7. Posting requirements. Employers must post a notice informing employees of their rights under Labor Law § 740 in an area that is easily accessible, well-lit, and frequented by employees and job applicants.
With the amendments to Labor Law § 740, former employees and independent contractors may now enjoy anti-retaliation protections, and a reasonable belief of a violation is sufficient to trigger the protections.
Employees no longer need to provide an employer with the opportunity to correct an alleged violation, and employers cannot retaliate against employees who provide information, including testimony, to investigating bodies.
As a result of the many changes, your employer will likely need to modify their policy, and many employers will now be required to institute a policy.
Whistleblowers are critical in the battle against corruption, fraud, and abusive workplace practices.
Our attorneys have extensive employment law knowledge and are committed to fighting for the rights of New York employees and executives.