New York Expands Whistleblower Protections

New York Governor Kathy Hochul has signed legislation that significantly broadens protections for whistleblowing employees under Section 740 of the New York Labor Law.  The amendments, which take effect on January 26, 2022, will make New York’s whistleblower law among the strongest in the nation.

These are the key changes reflected in the amendments:

• Definition of “Employee.” The amendments expand the definition of an “employee” to include former employees and independent contractors.
• Covered Protected Activity.  The current law protects only those employees who report violations of law that create or present a substantial and specific danger to the public health and safety.  Under the amended statute, employees will be protected if they disclose or threaten to disclose to a supervisor or public body an activity, policy or practice that the employee “reasonably believes”
  • violates any law, rule or regulation; or
  • poses a substantial and specific danger to public health and safety.

Under the first category, an employee will not be required to establish an actual violation of the law, but merely that they reasonably believed a violation occurred.  Under the second category, employees will be protected for disclosing an activity that presents a danger to public safety, even if the activity is not unlawful.

• Watered-Down Notice Requirement.  The current statute requires that, before disclosing violations to a public body, employees first report them to the employer to provide an opportunity for the employer to correct the alleged violation. The amended law will require employees only to make a “good faith” effort to notify their employer before disclosing to a public body. In addition, this good-faith effort will not be required if (1) there is imminent danger to public safety; (2) the employee reasonably suspects that the employer will destroy evidence; (3) the employee reasonably believes physical harm would result; or (4) the employee reasonably believes the employer is already aware of the activity and will not correct it.
• Covered Retaliatory Conduct.  The current statute limits covered retaliatory conduct to “discharge, suspension or demotion of an employee, or other adverse employment action taken against an employee in the terms and conditions of employment.” The amendment broadens covered retaliatory conduct to include: (1) actual or threatened discharge, suspension, or demotion, or any other adverse action against an employee related to the terms and conditions of employment; (2) action that would “adversely impact a former employee’s current or future employment;” and (3) the actual or threatened contacting of immigration authorities or reporting the immigration status of employees or their family members.
• Remedies.  Currently, successful plaintiffs are entitled to injunctive relief, reinstatement, compensation for lost wages, benefits, and other remuneration, and reasonable costs, disbursements, and attorneys’ fees.  The amendments will entitle successful plaintiffs to recover front pay (in lieu of reinstatement) and punitive damages if the violation “was willful, malicious, or wanton,” and also empower courts to assess civil penalties against the employer not to exceed $10,000.  Plaintiffs will also be entitled to a jury trial for claims brought under this law.  However, the law will continue to permit the court to award reasonable attorneys’ fees and court costs to the employer if it finds that the employee’s claim was brought “without basis in law or in fact.”
• Limitations Period.  The amendments extend the statute of limitations for filing a retaliation claim from one year to two years.
• Posting Requirement.  Employers must inform employees of their rights under the revised law by posting a notice “conspicuously in easily accessible and well-lighted places customarily frequented by employees and applicants.”  We expect the New York Department of Labor to issue a model notice for employers to use prior to the January 26, 2022 effective date.

Employers should consider revising managerial training for handling retaliation claims and review internal complaint procedures to ensure compliance with these upcoming amendments. 

Please reach out to the authors of this alert or another Seyfarth contact if you wish to discuss these developments.