New York Substantially Expands Whistleblower Protections for Private Sector Employees

On January 26, 2022, a new law amending New York’s whistleblower statute (Section 740 of the NY Labor Law) took effect, significantly bolstering protections for private-sector employees alleging retaliation against their employers. Specifically, the amended law prohibits private-sector employers from retaliating against employees, former employees, and independent contractors for disclosing or threatening to disclose, to a supervisor or public body, any conduct that they reasonably believe violates any law, rule or regulation, executive order, or any judicial or administrative decision, ruling, or order; or that they reasonably believe constitutes a substantial and specific danger to the public health or safety.

Former Law
Previously, the law prohibited retaliation against employees who disclosed or threatened to disclose conduct that actually violated a law, rule, or regulation, creating a “substantial and specific danger to the public health or safety or constituting health care fraud and only if the employee first notified the employer of the violation and afforded the employer a reasonable opportunity to correct the offending activity before disclosing it to a public body.

Key Changes 

Expansion of Coverage: The definition of “employee” is expanded to cover former employees and independent contractors.

Actual Violation of Law No Longer Necessary: Employees need only show that they reasonably believe the employer’s conduct is in violation of a law, rule or regulation or poses a substantial and specific danger to the public health or safety to be protected.

Actual Notice to Employer not Required: Employees only need to make a “good faith” effort to notify their employers of the violation before disclosing it to a public body. Additionally, employer notification of the alleged wrongdoing is not required if: (a) there is imminent and serious danger to the public health or safety, (b) the employee reasonably believes that reporting would result in destruction of evidence or other concealment of the offending activity; (c) the activity could reasonably be expected to lead to endangering the welfare of a minor; (d) the employee reasonably believes that reporting will result in physical harm to the employee or another person, or (e) the employee reasonably believes that the employer is already aware of the offending activity and will not correct it.

Prohibited Conduct Broadened: The definition of “retaliatory actions” has been expanded to include (a) adverse actions or threats to take adverse employment action against a current employee, such as discharge, suspension or demotion, (b) actions or threats to take actions that would adversely impact a former employee’s current or future employment, or (c) contacting or threatening to contact the U.S. immigration authorities regarding the suspected citizenship or immigration status of the employee or the employee’s family members.

Remedies Expanded: Potential additional relief to employees includes front pay (in addition to backpay), civil penalties not to exceed $10,000, and punitive damages for willful, malicious or wanton violations.

Statute of Limitations Lengthened and Right to Jury Trial Added: The statute of limitations is extended from one year to two years and employees are granted the right to a jury trial for whistleblower claims.

Posting: Employers must notify employees of their protections, rights, and obligations under the whistleblower law by posting a notice in a conspicuous, accessible and well-lit place.

Next Steps for Employers
As amended, New York’s whistleblower law presents a heightened risk of litigation for all private-sector employers. It is therefore important that covered employers understand the scope of the law and take appropriate steps to ensure compliance. Most immediately, all private-sector employers should post notice of employees’ rights under the law. Additionally, such employers should review existing policies and procedures and take steps to make certain supervisors are knowledgeable about the law and are properly trained on how to handle complaints. If you have any questions or would like additional information, please feel free to contact Lorna Hebert at [email protected] or 617-512-8401.

Lorna Hebert (New England team) is an employment, labor, higher education, and litigation attorney with nearly 30 years of experience handling a broad range of complex employment and labor matters. Lorna advises clients on a wide range of employment matters, including workplace investigations, dispute resolution, hiring, performance management, discipline, terminations, reorganizations,  accommodations, employee benefits, wage and hour issues,  discrimination claims, policies and procedures, and training.