New York State Governor Kathy Hochul recently signed legislation amending Section 740 of the New York Labor Law that greatly expands protections for workplace whistleblowers. When the amendment takes effect on January 26, 2022, New York State will have one of the strongest whistleblower laws in the country. Significant changes to Section 740, as amended, include the following provisions:
- Covered Whistleblowers – The amendment expands the definition of the persons protected under the law from only current employees to also include former employees and independent contractors (“covered whistleblowers”).
- Reasonable Belief Standard – The current law protects only employees who disclose activity that actually violates a law, rule or regulation and which creates and presents a substantial and specific danger to the public health or safety. The amendment replaces that standard with a “reasonable belief” standard that protects any covered whistleblower who discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice that the covered whistleblower reasonably believes is in violation of law, rule or regulation or reasonably believes poses a substantial and specific danger to the public health or safety.
- Reduced Notice Requirement – Under the amended law, a covered whistleblower will only be required to make a “good faith” effort to notify the employer of the activity and afford the employer a reasonable opportunity to correct the activity before notifying a public body. However, notification will not be required where (a) there is an imminent and serious danger to the public health or safety; (b) 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; (c) such activity, policy or practice could reasonably be expected to lead to endangering the welfare of a minor; (d) the employee reasonably believes that reporting to the supervisor would result in physical harm to the employee or any other person; or (e) 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.
- Prohibited Retaliatory Conduct – As amended, Section 740 prohibits discharging, threatening, penalizing or in any other manner discriminating against a covered whistleblower for exercising his or her rights under the law, including (i) adverse employment actions or threats to take such adverse employment actions against an employee in the terms of conditions of employment including but not limited to discharge, suspension, or demotion; (ii) actions or threats to take such actions that would adversely impact a former employee’s current or future employment; or (iii) threatening to contact or contacting United States immigration authorities or otherwise reporting or threatening to report a covered whistleblower’s suspected citizenship or immigration status or the suspected citizenship or immigration status of a covered whistleblower’s family or household member.
- Remedies – The current law allows successful plaintiffs to obtain injunctive relief and reinstatement as well as recover lost wages, benefits and other remuneration and attorneys’ fees. The amended law will also allow for the recovery of front pay (in lieu of reinstatement) and punitive damages, and authorizes courts to impose a civil penalty up to $10,000.
- Notice Requirement – The amended law requires employers to inform employees of their protections, rights and obligations under the law by posting a notice “conspicuously in easily accessible and well-lighted places customarily frequented by employees and applicants for employment.”
Inclusion of this reasonable belief standard means that covered whistleblowers will now be protected if they report what they reasonably believe to be a violation of law, rule or regulation, or report activity that they reasonably believe poses a substantial and specific danger to the public health or safety, even though no actual violation or danger exists.
Employers should consider training their managers and supervisors on how to identify, handle and respond to whistleblower claims covered by Section 740 and ensure that they post the notice as required.
For questions regarding the expanded New York State workplace whistleblower protections, please contact any of the attorneys on our Labor & Employment Practice Team or the Phillips Lytle attorney with whom you have a relationship.