December 09, 2021 Amendments to the Labor Law Provision Prohibiting Retaliation Against Whistleblowers
KEEPING YOU INFORMED…
We are writing to advise you that Governor Hochul recently signed new legislation, effective January 26, 2022, amending Labor Law § 740 to substantially expand the existing protections for “whistleblowers.”
Prior to the amendments, Labor Law § 740 was limited in scope. As is relevant here, it prohibited “retaliatory action” against employees who reported certain activities, policies or practices of an employer; i.e., those that: (1) violated a “law, rule or regulation;” and (2) created “a substantial and specific danger to the public health or safety.” Moreover, the law only protected an employee who:
• Disclosed the activity, policy or practice to a supervisor;
• Disclosed the activity, policy or practice to a public body (e.g., Congress, the State Legislature, a court, a jury, an administrative agency, a regulatory agency, a law enforcement agency, a police officer or a prosecutorial office) but only if the employee first gave the employer a reasonable opportunity to correct the issue;
• Provided information to, or testified before, any public body conducting an investigation, hearing or inquiry into the activity, policy or practice; or
• Objected to, or refused to participate in, the activity, policy or practice.
As amended, Labor Law § 740 is now far broader. The additions and amendments are summarized below.
1. Independent Contractors and Former Employers. In addition to employees, Labor Law § 740 now also protects independent contractors and former employees (an independent contractor and a former employee are now included in the definition of “employee”).
2. Reasonable Belief. Prior to the amendments, for a whistleblower’s reporting to be protected by Labor Law § 740, the employer’s activity, policy or practice had to actually violate a law, rule or regulation and create a substantial and specific danger to the public health or safety. Now, the whistleblower need only have a reasonable belief that the employer has violated a law, rule or regulation and need only have a reasonable belief that the violation poses a substantial and specific danger to the public health or safety.
3. Employer Notification. Whistleblowers no longer need to have actually notified their supervisor before disclosing the activity, policy or practice to a public body. Instead, they need only have made “a good faith effort” to do so. Further, the employer notification is not required where:
a. There is “an imminent and serious danger to the public health or safety;”
b. The whistleblower “reasonably believes that reporting to the supervisor would result in a destruction of evidence or other concealment of the activity, policy or practice;”
c. The “activity, policy or practice could reasonably be expected to lead to endangering the welfare of a minor;”
d. The whistleblower “reasonably believes that reporting to the supervisor would result in physical harm to the employee or any other person;” or
e. The whistleblower “reasonably believes that the supervisor is already aware of the activity, policy or practice and will not correct [it].”
4. Retaliatory Action. The definition of “retaliatory action” has been substantially expanded to include an employer, or its agent, discharging, threatening, penalizing or in any other manner discriminating against the whistleblower. The amendments make clear that this includes: (i) any adverse actions, or threats to take adverse actions, in any of the whistleblower’s terms and conditions of employment (e.g., not just termination, but also work assignments, work locations, denying promotions; etc.); (ii) actions, or threats to take actions, that would adversely impact a former employee’s current or future employment; or (iii) threatening to contact, or contacting, United States immigration authorities or otherwise reporting, or threatening to report, a suspected citizenship or immigration status, or the suspected citizenship or immigration status of a whistleblower’s family or household member, to a federal, State, or local agency.
5. Law, rule or regulation. In addition to statutes and ordinances, the definition of “law, rule or regulation” now includes executive orders and decisions of a court or administrative agency.
6. Public body. The amendments confirm that the definition of a “public body” includes any department of the federal, State or local executive branch of government. It also confirms that the definition includes any member, employee, division, board, bureau, office, committee, or commission of: (1) Congress; (2) the State Legislature; (3) an elected local governmental body; (4) a federal, State or local court; (5) a jury; (6) a federal, State, or local regulatory, administrative, or public agency or authority; and (7) any department of the federal, State or local executive branch of government.
7. Statute of Limitations. The Statute of Limitations for a person to bring a lawsuit alleging a violation of Labor Law § 740 has been extended from one to two years.
8. Penalties. The penalties for a Labor Law § 740 violation have been substantially increased. In addition to a court ordering an injunction, reinstatement, back pay, front pay and attorneys’ fees, an employer can now also be fined up to $10,000 and ordered to pay additional punitive damages if the violation was “willful, malicious or wanton.”
9. Notification. Employers are now required to inform their employees of their rights and protections pursuant to Labor Law § 740 by conspicuously posting a notice in an easily accessible and well-lit place frequently used by employees and applicants for employment.
As a result of this expansion of New York’s “whistleblower law,” and the evolving laws, rules, regulations and executive orders addressing, among other topics, COVID-19 workplace health and safety requirements, we strongly encourage you to contact us before taking any potentially adverse employment actions in response to an employee’s complaint.
If you have any questions regarding the whistleblower law or the recent changes to it, please contact Adam S. Ross (asr@lambbarnosky.com) or one of our other attorneys at 631-694-2300.
THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.
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© Lamb & Barnosky, LLP 2021