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Littler | New York Dramatically Expands Whistleblower Rights

New York has historically been known as a bedrock of employment-at-will.  Its legislature and courts were long resistant to permitting exceptions to this doctrine, such as by recognizing public policy “wrongful dismissal” lawsuits outside the statutory prohibitions against discrimination, harassment, and retaliation set forth in the state Human Rights Law.

In recent years, though, New York has significantly expanded legal protections for private-sector employees.  For instance, the #MeToo era led to sex harassment law reforms, and the legislature has expanded discrimination law protections to independent contractors.

New York has now also dramatically expanded protections for private-sector whistleblowers.  New York’s whistleblower law, codified at Section 740 of the Labor Law, had provided narrow whistleblower rights, prohibiting retaliation only against employees who complained of practices that actually constitute a “substantial and specific danger to the public health or safety.”

Effective January 26, 2022, however, the law will prohibit private-sector employers from retaliating against employees, former employees, and independent contractors for disclosing or threatening to disclose, to a supervisor or public body, any conduct that they reasonably believe violates any law, rule or regulation, executive order, or any judicial or administrative decision, ruling, or order; or that they reasonably believe constitutes a substantial and specific danger to the public health or safety.

Thus, the amendment will expand the current whistleblower law in at least three key ways:

  • First, the complained-of conduct need not constitute a public health or safety risk to protect the individual against retaliation; instead, the employee need only reasonably believe that the conduct violates the law, or constitutes such a risk;
  • Second, employees need only have a reasonable belief that the conduct is unlawful or dangerous—they need not be correct in that belief; and
  • Third, the amended law protects not only employees, but also former employees, and independent contractors.  (It is not clear, from the statutory language, whether the law also now protects former independent contractors.)

The law will also limit the requirement that, to be protected, the individual must first bring the activity or practice to the attention of the employer and give them a reasonable opportunity to cure the offending activity.  Now, the individual need only make “a good faith effort to notify his or her employer” by bringing the activity to its attention; and the notification requirement is lifted entirely if:

  • there is an imminent and serious danger to the public health or safety;
  • the employee reasonably believes that reporting to the supervisor would result in a destruction of evidence or other concealment of the activity, policy or practice;
  • such activity, policy or practice could reasonably be expected to lead to endangering the welfare of a minor;
  • the employee reasonably believes that reporting to the supervisor would result in physical harm to the employee or any other person; or
  • the employee reasonably believes that the supervisor is already aware of the activity, policy or practice and will not correct such activity, policy or practice.

What constitutes retaliation under the amended law?  The statute prohibits not only adverse employment action—such as discharge, suspension, or demotion—but also, quite unusually, forbids “threatening to contact or contacting United States immigration authorities or otherwise reporting or threatening to report an employee’s suspected citizenship or immigration status or the suspected citizenship or immigration status of an employee’s family or household member . . . to a federal, state, or local agency.”

An individual whose rights under the amended statute are violated may bring a civil action seeking a full panoply of remedies:  they may seek injunctive relief; reinstatement (or front pay in lieu thereof); reinstatement of full fringe benefits and seniority rights; lost wages, benefits, and other remuneration; costs, disbursements, and attorneys’ fees; payment of a civil penalty of up to $10,000; and, if the violation was willful, malicious or wanton, punitive damages.  The law also explicitly entitles the parties to a jury trial in any such action.

An employer may defend such a claim by demonstrating that the alleged retaliatory action was predicated on grounds other than the employee’s exercise of their rights under the statute.

The amended statute doubles the previous one-year statute of limitations to two years, and newly requires that employers conspicuously post, in the workplace, notice of individuals’ protections, rights and obligations under the law.

With these amendments, effective in January 2022, New York’s whistleblower law will look more like those of California, New Jersey, and other states that have long recognized this significant erosion of the employment-at-will doctrine.  Employers can expect a significant increase in litigation and legal risk as a result of this change.

Employers should promptly revisit their policies and training protocols to be sure that, first, managers know how to respond to employee complaints of alleged wrongdoing; and second, that their policies encourage employees to disclose any such concerns to their managers, to Human Resources, Legal, or other internal channels.

Authors:

  • Philip M. Berkowitz, Shareholder | pberkowitz@littler.com
  • Jeanine Conley Daves, Shareholder | jconley@littler.com

Compliments of Littler Mendelson P.C. – a member of the EACCNY.