NEW YORK WHISTLEBLOWER PROTECTION EXPANDING

On October 28, 2021, New York Governor Kathy Hochul signed this legislation enhancing the protections available to individuals who claim retaliation for reporting alleged employer wrongdoing: (S.4394A/A.5144A) amending NY Labor Law Section 740 (Section 740), which prohibits retaliation by employers against whistleblowers. It is effective 90 days after the Governor’s signature.

As per the Senate bill:

"SUMMARY OF PROVISIONS:

Section 1 of this bill amends the definition of "employee" to include
former employees and independent contractors; clarifies that the defi-
nition of "law, rule, or regulation" has included executive orders as
well as judicial or administrative decisions; clarifies the definition
of a "public body;" 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 threats
to contact immigration authorities; provides protection to employees
whether or not they were acting within the scope of their job duties;
provides protection for employees who disclose or threaten 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 the public health or safety; provides
exceptions for which employer notification is not required; extends the
statute of limitations to two years; provides the right of parties to a
jury trial; permits courts to order the relief of front pay, a civil
penalty, and the payment of punitive damages; and requires employers to
publish a notification of rights under section 740 of the Labor Law.

Section 2 of this bill requires health care employers to publish a
notification of rights under section 741 of the Labor Law and makes a
technical amendment.

Section 3 of this bill is the effective date.

 
JUSTIFICATION:

Labor Law Section 740, the state "whistleblower" law protecting private
employees, has long been restrictive. Current law provides that an
employee is only protected if they disclose to a supervisor or public
body an unlawful activity, policy, or practice of the employer that
creates and presents a substantial danger to the public health or safe-
ty, or that which constitutes health care fraud. Thus, an employee
reporting any myriad of illegal activities that do not directly affect
public health or safety, from sexual harassment to tax evasion, may be
at risk for being retaliated against by their employer with no
protection in law.

In addition, courts have held that for private employees, Labor Law 740
requires proof of an actual violation of law in order to sustain a cause
of action.

The above restrictions creates a discrepancy with how private employees
are treated in comparison to public employees, since Civil Service Law
75-b protects disclosure of "improper governmental actions" - or an
action in violation of any federal, state, local law, rule, or regu-
lation - where there is a reasonable belief of such action. Such
protections for public employees have been in place since 1986.
This bill corrects the above discrepancies by providing employees
protection for "blowing the whistle" on 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 the public health or safety.

This bill further protects former employees, as an employer can continue
to retaliate against a whistleblower by harming them in their current or
future employment prospects, such as by attempting to blacklist someone
from the industry.

This bill also makes unlawful retaliation causes of action available to
independent contractors. The importance of this aspect of the bill has
been highlighted by workplace health and safety concerns during the
COVID-19 pandemic as well as the ongoing misclassification of employees
as independent contractors. This bill would ensure that these workers
have the ability to bring an action alleging wrongful retaliation as a
result of their whistleblowing activities.

The bill also permits the recovery of punitive damages if the employer
was found to violate the anti-retaliation law in a "malicious or wanton"
manner. This is consistent with existing law, which permits a court to
award punitive damages for only the most egregious types of conduct.

However, where such conduct occurs in the employment setting, there is
no reason not to afford victims with the same relief which is afforded
to the victims of such conduct in non-employment settings."