New York Expands Protections Under Whistleblower Law
Knowledge

New York Expands Protections Under Whistleblower Law

Key Takeaways

  • Gov. Kathy Hochul has signed legislation expanding whistleblower protections under New York Labor Law §§ 740 and 741, primarily impacting employers in the private and healthcare sectors

  • The definition of “employee” has been expanded to include former employees, and the statute of limitations extended to two years

  • “Retaliatory action” now includes threatening or taking actions that would impact an employee’s future employment, and contacting or threatening to contact immigration authorities

On October 28, 2021, Gov. Kathy Hochul signed S.4394-A/A.5144-A and announced amendments to New York Labor Law (NYLL) §§ 740 and 741, known as New York’s whistleblower laws.

Generally speaking, NYLL §§ 740 and 741 prohibit private sector employers from discharging, suspending, demoting, or otherwise retaliating against an employee because the employee takes certain actions in relation to certain unlawful activity, policy, or practice by an employer. Section 740 covers private sector employers generally, whereas Section 741 covers certain employers that provide healthcare services.

The sponsors of the legislation indicate that the current state of these laws is “restrictive,” and that the laws create a discrepancy with protections afforded to public sector employees in New York, which are enumerated in Civil Service Law § 75-b. Accordingly, this legislation in many ways expands NYLL §§ 740 and 741 to more closely align them with Civil Service Law § 75-b.

Amendments to NYLL § 740

Employment laws at the state and federal level generally only apply to individuals that are a part of an employee-employer relationship. However, in recent years, employment laws are being expanded to protect third parties. This bill follows suit, amending the law to expressly protect independent contractors that provide services for the employer. The bill also clarifies that the law not only covers current employees, but also covers former employees from retaliation. By way of example, employers will be prohibited from trying to stop the former employee from obtaining new employment with a different employer.

The bill also expands the scope of legal authority covered that the employee can complain about without fear of retaliation. Specifically, the definition of “law, rule, or regulation” is expanded to expressly include any federal, state, or local executive order, and judicial or administrative decision.

The bill also expands the definition of “public body” to include the following: 1) any federal, state, or local department of an executive branch of government; 2) any division, board, bureau, office, committee, or commission of any of the public bodies enumerated in NYLL § 740.

The bill expands the definition of “a retaliatory action” to include actions or threats to take actions that would adversely impact a former employee’s current or future employment, and contacting or threating to contact immigration authorities.

The bill also clarifies that the protections attach to the employee, regarding of whether or not the employee was acting within the scope of their job duties.

Employees are also now protected under the law if the employee discloses or threatens to disclose to a supervisor or to a public body an activity, policy, or practice of the employer 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 public health or safety.

Under normal circumstances, the employee must make a good faith effort to notify his or her employer by bringing the activity, policy, or practice in violation of law, rule, or regulation to the attention of a supervisor of the employer and must afford the employer a reasonable opportunity to correct such activity, policy, or practice. However, employees do not need to take those steps under the following circumstances:

  1. there is an imminent and serious danger to public health or safety;
  2. 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;
  3. such activity, policy, or practice could reasonably be expected to lead to endangering the welfare of a minor;
  4. the employee reasonably believes that reporting to the supervisor would result in physical harm to the employee or any other person; or
  5. 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.

The statute of limitations to bring claims was changed from one year to two years. Parties to such an action are also now entitled to a jury trial. The relief provided under the law now includes the potential for front pay, a civil penalty of an amount not to exceed $10,000, and punitive damages (if the violation was willful, malicious, or wanton).

Finally, every employer shall inform employees of their protections, rights, and obligations under this section by posting a notice thereof. Such notices shall be posted conspicuously in easily accessible and well-lighted places customarily frequented by employees and applicants for employment.

Amendments to NYLL §§ 741

Under the amendment, health care employers will also be required to publish a document notifying employees of their protections, rights, and obligations under NYLL §741. The notice must be posted conspicuously in easily accessible and well-lit places customarily frequented by employees and applicants for employment.

Effective Date and Next Steps

The law does not become effective until on or about January 26, 2022, 90 days after it became law. Accordingly, this law should not affect pending litigation that employers are currently defending under NYLL §§ 740 or 741. Employers are advised to carefully review these amendments with counsel, and to train managers and those responsible for handling employee complaints on these changes to the law. Employers will also want to review and consider updating any policies governing the handling of reference checks from potential employers of former employees. Given the vast protections under NYLL §§ 740 and 741, if they are not already doing so, employers may want to strongly consider only confirming dates of employment and job title when receiving such requests.

For more information or immediate guidance, contact: