New York's Whistleblower Law Has Been Blown Wide Open

New York Governor Kathy Hochul has signed into law a bill greatly expanding whistleblower protections provided under New York Labor Law § 740 that will go into effect on January 26, 2022. The previous provisions of the law provided narrow whistleblower rights, prohibiting retaliation against employees who complained of an actual violation that creates and presents a substantial and specific danger to public health or safety. The new law broadly opens the door for employee claims of retaliation, as a result of their having disclosed or threatening to disclose concerns that the employer is violating any law, rule or regulation, or is engaged in a practice that poses a substantial and specific danger to public health or safety.

"Employee" Defined More Broadly

The amended law expands the definition of protected employees who may bring whistleblower claims to include former employees and individuals employed as independent contractors.

Expansion of Prohibited Retaliatory Action

The definition of retaliatory action formerly meant the "discharge, suspension or demotion of an employee or other adverse action taken against an employee in the terms and conditions of employment." Compare this with the expansive definition adopted by the amended law, which includes (i) an adverse employment action or threats to take such action against an employee in the terms and conditions of employment, (ii) actions or threats to adversely impact a former employee's current or future employment or (iii) threatening to contact or contacting the United States immigration authorities to report the citizenship or immigration status of an employee or of an employee's family or household member.

Adoption of Reasonable Belief Standard ― Actual Violation Not Required

No longer does an actual violation need to be present for an employee to state a claim. The amended law prohibits an employer from taking any of the above discussed retaliatory actions against an employee who discloses or threatens to disclose, to a supervisor or public body, a company policy or practice that the employee "reasonably believes is in violation of law, rule or regulation or that the employee reasonably believes poses a substantial and specific danger to the public health or safety."

Expansion of Protected Activity

An employee who makes a disclosure to a public body is no longer required to bring the activity that violates law to the attention of a supervisor or give the employer a reasonable opportunity to correct the violation. An employee will now be required to only make a "good faith effort" to notify the employer of the activity, policy or practice. Moreover, employer notification will not be required if:

• There is imminent and serious danger to the public health or safety;
• The employee reasonably believes reporting to the supervisor will result in concealing the activity through the destruction of evidence or otherwise;
• The 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.

Longer Statute of Limitations

The statute of limitations for an employee to institute a civil action has been lengthened from one year to two years after the alleged retaliatory action was taken.

Right to Jury Trial

The parties to the action are now entitled to a jury trial.

Additional Remedies Added

An employee may now receive front pay in lieu of reinstatement to the same position, or equivalent position, held before the retaliatory action and punitive damages, if the violation was willful, malicious or wanton. A civil penalty not to exceed $10,000 may also now be assessed against an employer for retaliatory conduct. Other relief remains the same; namely, the availability of an injunction to restrain the violating conduct, reinstatement to position and of fringe benefits and seniority rights, compensation for lost wages and benefits and other remuneration, and attorney's fees and costs.

Employee Notice

Employers are required to post a notice of the protections provided under the law in a well-lit, conspicuous place easily accessible to employees and applicants for employment.

What This Means for Employers

Employers should revisit their policies and training to ensure managers respond appropriately to employee claims of alleged wrongdoing. Employers should also ensure their policies provide procedures for employees to report perceived violations. Given the expansive changes to the law, employers are encouraged to consult with an employment attorney to incorporate the amendments into their practices.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.