New York Court of Appeals Expands Potential For State Whistleblower Claims

The New York Court of Appeals recently ruled that a whistleblower need not plead the specific “law, rule or regulation” that the employer purportedly violated to state a cause of action under the New York whistleblower statute. Webb-Weber v. Cmty. Action for Human Servs., 2014 N.Y. Slip. Op. 03428 (May 13, 2014). The New York whistleblower statute prohibits an employer from retaliating against an employee who “discloses, or threatens to disclose to a supervisor or public body an activity, policy, or practice of the employer that is in violation of the law, rule or regulation” that either “creates and presents a substantial and specific danger to the public health or safety, or… constitutes health care fraud.” N.Y.L.L. § 740(2).

Background

Plaintiff, Wendy Webb-Weber, was the Chief Operating Officer for Defendant Community Action for Human Services, Inc. (“Community Action”), a non-profit corporation that provides social services to individuals with disabilities, and others. According to her complaint allegations, throughout the course of her employment, Plaintiff complained internally and externally about several deficiencies in patient care. When Community Action terminated her employment, Plaintiff filed suit under the New York whistleblower statute alleging she was discharged in retaliation for lodging those complaints.

Defendants moved to dismiss on the grounds that the complaint failed to identify a particular “law, rule or regulation” that they purportedly violated. After the trial court denied the motion, Defendants appealed. The Appellate Division disagreed with the trial court, ruling that the complaint failed to state a cause of action because it did not identify a specific “law, rule or regulation” that the employer allegedly violated. Plaintiff appealed to the New York Court of Appeals.

The Ruling

The Court of Appeals reversed, ruling that a whistleblower “complaint need not specify the actual law, rule or regulation violated.” Rather, the Court held, the complaint only “must identify the particular activities, policies or practices” in which the employer purportedly engaged, which are necessary to give the employer adequate notice of the complained-of conduct. Applying that standard, the Court determined that the complaint alleged sufficient facts to support Plaintiff’s contention that Defendants violated various laws, rules or regulations, specifically noting that the complaint alleged that public bodies issued sanctions and violations as a result of Plaintiff’s purported whistleblowing activity. 

Implications

Employers should recognize that this decision slightly lowers the pleading standard under the New York whistleblower statute, and thus presents a somewhat steeper climb in the context of a motion to dismiss. Notably, the Court recognized that a defendant may request in a bill of particulars that plaintiff identify the specific laws, rules or regulations that the defendant purportedly violated, which may be useful in circumstances where the complaint is factually sparse. Viewed in broader context, moreover, this decision illustrates that whistleblower litigation is continuing to proliferate under a variety of state laws around the country.

Topics:  Appeals, Employer Liability Issues, Pleading Standards, Whistleblowers

Published In: Health Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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