New York Significantly Expands Protections For Employees Under Whistleblower Laws

Murtha Cullina

On October 28, 2021, New York Governor, Kathy Hochul, signed legislation protecting employees who report illegal or dangerous business activities from retaliation by their employers.

These amendments to New York’s “whistleblower law” (Labor Law § 740) significantly enhance the scope of prohibited retaliatory activity. Prior to the amendments, New York’s whistleblower law only protected employees from anti-retaliation if they complained about an actual violation of law and the violation presented a “substantial and specific danger to the public health and safety.”  In the past, an employee’s reasonable belief that a violation had occurred was insufficient to trigger anti-retaliation protection under the law.  In addition, prior to the amendments, the law required employees to give employers a reasonable opportunity to correct the alleged violation before reporting the conduct to an investigative agency.

The amended law goes into effect on January 26, 2022 and expands whistleblowing protections for employees in several material ways. First the amendments expand the scope of individuals protected from retaliation to include current and former employees as well as independent contractors.  Further, the amendments prohibit employers from retaliating against an employee if they disclose or threaten to disclose a policy or practice of the employer that the employee reasonably believes violates a law, rule or regulation or that the employee reasonably believes poses a substantial and specific danger to public health or safety.  It also protects from retaliation employees who provide information, including testimony, to any public body investigating such activity or objects to participate in such activity.

The amendments no longer require an employee to afford an employer a reasonable opportunity to correct an alleged violation, but only requires employees to make a “good faith” effort to notify the employer before disclosing the violation to a public body.  Additionally, this notice requirement is not required if the employee reasonably believes that reporting the alleged wrongdoing to the employer will be futile, or if it will result in the destruction of evidence, other concealment, or harm to the employee.

The amendments also expand the meaning of adverse action.  Prior to the amendments, retaliatory action was limited 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 amendments expand the definition of adverse action to include conduct that would “adversely impact a former employee’s current or future employment.”  This change renders it similar to the anti-retaliation protections under applicable city, state and federal law.

Courts interpreted New York’s whistleblower law narrowly, but these amendments broadening coverage will result in an increase of cases alleging retaliation for engaging in whistleblower activity, and will likely be used by employees to address, among other things, issues relating to employer’s efforts to curb the spread of COVID-19 in the workplace.  Employers are required to post notice of the protections, rights, and obligations of employees under the new amendments, which represent a further erosion of New York’s strict adherence to employment at-will.  Employers will need to modify their policies and training to ensure that managers and supervisors are prepared to address whistleblower complaints with upper management.  

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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