New York has long lagged behind New Jersey in according protection to employees who blow the whistle on unlawful or unsafe conditions in the workplace. Unlike its sister state, New York employees had a higher bar for achieving protected whistleblower status under section 740 of the New York Labor Law (NYLL), and employers had viable defenses that could undermine an employee’s claim.
On October 29, 2021 Gov. Hochul signed into law amendments to NYLL Section 740 that significantly expand the rights of employees in ways that bring it line with the expansive protections accorded New Jersey employees. These amendments go into effect January 26, 2022.
Expanded definition of “employee”: The definition of “employee” was amended to include not only current employees, but former employees as well as independent contractors providing services to an employer.
Expanded scope of protected whistleblowing activity: Prior to the amendments, New York whistleblowers were only entitled to protection if they reported an actual violation of law, rule or regulation. Under the amendments, employees cannot be subject to any retaliation because the employee engaged in any of the following activities:
- 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 the public health or safety;
- provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into such activity, policy or practice by such employer; or
- objects to, or refuses to participate in any such activity, policy or practice.
By incorporating the reasonable belief standard, employees can pursue retaliation claims even if it turns out that the employer’s conduct was perfectly legal; so long as the employee had a reasonable belief that it was not lawful, they are still entitled to the statute’s protections.
Expanded definition of ‘law, rule or regulation”: This definition was expanded to include executive orders and judicial or administrative decisions, rulings or orders.
Expanded definition of “retaliatory action”: While previously limited to discharge, suspension, demotion or other adverse employment action taken against an employee in the terms and conditions of employment, this definition was expanded to include i) actual or threatened adverse employment action affecting the terms and conditions of employment; ii) actual or threatened adverse actions that would affect current or future employment; and iii) threatening or contacting immigration or other authorities about the immigration status of an employee or a member of his/her household or family.
Lowering the burden on employees to disclose internally before notifying a public body: Prior to the amendments, employees had to initially report any violations to the employer to afford it a reasonable opportunity to cure the alleged violations before reporting the violation to a public body. Now employees need only show that they made a “good faith effort” to pre-notify the employer before contacting a public body. In addition, prior notification to the employer is excused if i) there is an imminent and serious threat to public health and safety; ii) the employee reasonably believes it will result in the destruction of evidence or concealment of the activity; iii) the practice could reasonably be expected to endanger a minor; iv) the employee reasonably believes that the employee or other persons will be physically harmed if there is prior notification; or v) the employee reasonably believes that the employer is already aware of the unlawful or harmful practice and will not correct it if reported.
Expanded statute of limitations and remedies: The statute of limitations will be expanded from one to two years. In addition to injunctive relief, reinstatement, lost wages and benefits, costs and attorney fees, employees can now recover front pay, a civil penalty of up to $10,000, and punitive damages for “willful, malicious or wanton” violations. However, the amendments did not disturb the provision allowing courts to award attorney fees to the employer if it finds that action was brought by the employee without any basis in law or fact.
Employer publication: Employers are required to conspicuously post a notice informing employees of their rights under the amended Section 740 “in easily accessible and well-lighted places customarily frequented by employees and applicants.” The New York Department of Labor is expected to issue a new poster that can be utilized by employers before the amendments go into effect on January 26, 2022.
Actions to take now: Employers should train managers and supervisors about the expanded rights of whistleblowers under New York law and modify any existing policies and procedures to conform to these new requirements.