A law amending New York State’s whistleblower statute (New York Labor Law § 740), which was signed by Governor Kathy Hochul this past fall, goes into effect today, January 26, 2022.
Before it was amended, the whistleblower statute generally prohibited employers from retaliating against employees who disclosed, or threatened to disclose, an activity, policy or practice of the employer that was in violation of a law, rule or regulation.
However, the older version of the statute presented several serious hurdles for employees seeking to make a claim. First, under the prior version of the statute, it was not sufficient for the employee merely to reasonably believe that the activity, policy or practice that the employee was disclosing constituted a violation of the law – in other words, that activity, policy or practice must have actually been a violation of the law. In addition, under the prior version of the statute, the activity, policy or practice in question also had to constitute a substantial and specific danger to public health or safety. Again, it would not be sufficient for the employee merely to reasonably believe that such a danger exists, it must actually exist. Moreover, the caselaw interpreting Labor Law § 740 made clear that the danger must be to the public at large, and not merely to certain individuals.
The revised statute substantially broadens the scope of potential liability against businesses that are accused of retaliating against whistleblowers. First, under the new version, a worker must merely allege that he or she reasonably believes that the activity, policy or practice constitutes a violation of law – not that it actually constitutes a violation of law. Second, the worker may state a claim by alleging that he or she reasonably believes an activity, practice or policy constitutes a danger to public health or safety – again, a mere reasonable belief is sufficient, and the activity practice or policy need not also constitute a violation of law (if the employee reasonably believes it constitutes a danger to public health and safety).
The scope of the statute is broadened in several other respects as well. Among other things:
- It now applies not just to employees, but to former employees and to independent contractors (who are not themselves employers);
- It expands the definition of “law, rule or regulation” to explicitly encompass executive orders and judicial and administrative rulings;
- It expands the definition of “retaliatory action” to explicitly encompass such actions as threatening to contact authorities regarding the complainant’s (or a family member’s) immigration status, and it clarifies that retaliatory action may include actions taken outside of the scope of the worker’s job duties;
- Under the prior version of the statute it was necessary for an employee to first bring the allegedly unlawful activity to the attention of a supervisor or the employer before bringing a claim. Now, a worker must merely make a good faith effort to notify his or her employer before bringing a claim. However, that good faith effort requirement is excused in certain situations, including situations where there is an imminent and serious danger to public health or safety, where the employee reasonably believes that reporting the activity to the employer will result in destruction of evidence, or where the employee reasonably believes the supervisor is already aware of the practice and will not correct it; and
- The statute of limitations is extended from one year to two years.
Finally, the revised statute requires employers to post a notice, and it provides for additional forms of relief to a prevailing plaintiff, including front pay, civil penalties not to exceed $10,000, and punitive damages.
In light of these revisions and the increasing risk of liability, New York employers must exercise extreme caution when dealing with employees or contractors who raise concerns regarding potential violations of laws, rules, regulations, executive orders or court orders, or any activity policy or practice that the employee or contractor reasonably believes poses a substantial and specific danger to public health or safety. And critically, employers should not retaliate against any such employees or contractors.