New York Expands Whistleblower Law

Signed into law on October 28, 2021, and effective January 26, 2022, New York’s Whistleblower Law (NY Labor Law Section 740) has been amended to expand the who, what, how and when of protected activity.

Employers Take Note. Key Changes Include:

Expands Definition of Employee: The categories of workers protected against retaliation has been expanded from current employees to now include former employees and natural persons employed as independent contractors.

Expands Definition of Protected Activity: Anti-retaliatory protections were previously limited to employees who raised concerns about “substantial and specific danger to the public health and safety” or “health care fraud”. That activity, policy or practice had to actually violate the law, rule or regulation and employees had to give their employer notice. This has been changed in several significant ways:

Protected activity now includes disclosure about what “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” [emphasis added];
It is sufficient if an employee makes a “good faith” effort to notify their employer before disclosing the violation to a public body and notification is not required at all if there is an imminent and serious danger to the public health or safety, or if the employee reasonably believes that reporting the alleged wrongdoing to the supervisor will result in destruction of evidence, other concealment, or harm to the employee, or if the employee reasonably believes that their supervisor is already aware of the practice and will not correct it;
The type of activity about which an employee may complain has been expanded to include executive orders and any judicial or administrative decision, ruling or order and need not be within the scope of the employee’s job duties.

Expands Definition of Public Body: The definition now includes any “federal, state or local department of an executive branch of government” and “any division, bureau, office, committee, or commission of any of the public bodies.”

Expands Definition of Prohibited Retaliatory Action: Previously retaliatory action was limited to “discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment”. Retaliatory action now includes action that would “adversely impact a former employee’s current or future employment,” including threatening to contact immigration authorities or reporting the immigration status of employees or their family members.

Lengthens the Statute of Limitations: Employees now have two years, rather than one, to sue an employer for retaliation.

Expands Remedies and Relief: Employees are now entitled to a jury trial and, in addition to other relief, recovery of front pay, civil penalties not to exceed $10,000, and punitive damages if the conduct was found to be willful, malicious or wanton. Note, however, that while a prevailing plaintiff is entitled to attorneys’ fees, an employer is equally entitled to attorneys’ fees if the retaliation claim was brought “without basis in law or fact”.

New Notification Requirement: Employers are now required to post notice of employee protections, rights, and obligations. The notice should be posted conspicuously and in “accessible and well-lighted places customarily frequented by employees and applicants for employment”. This change is an amendment to Section 741 of New York Labor Law. New York’s Department of Labor will likely publish a model posting prior to January 26.

Recommendations for Employers

In addition to complying with the new posting requirement, employers should consider the following:

Update existing whistleblower policies as needed or adopt a whistleblower policy if one is not already in place.
Train managers on how to receive and respond to reports of possible violations.
Consult with counsel when faced with a complaint regarding alleged violations of any law and before taking adverse action against an employee or independent contractor who has arguably engaged in protected activity.

Questions?

If you have questions regarding how to comply with the expanded Whistleblower Law, or have any other employment law related matters, please contact Hillary Zilz at hzilz@schlamstone.com or 212.612.0671.