Q. As a New York employer, what do I need to know about the amendments to New York’s Labor Law regarding whistleblowers?
A. Effective January 26, New York State enacted legislation significantly expanding whistleblower protections under Section 740 of the New York Labor Law. In passing this law, New York has become one of the most pro-employee whistleblower jurisdictions in the country. The amendments expand the scope of individuals protected, the definition of protected activity, the types of employment-related actions that constitute retaliation, the available remedies for aggrieved employees, and the notice requirements for employers.
Key changes to New York Labor Law Section 740 are outlined below.
Expanded Definition of Employees
The amendments expand the definition of “employee,” and therefore, the range of individuals protected from retaliation, to include former employees and independent contractors. Previously, under the law, the term “employee” included only current employees.
Expanded Protected Activity
The amendments also expand what qualifies as protected activity. Previously, the law only protected employees who complained about an actual violation of the law. The new law significantly expands the scope of protected activity to protect employees who reasonably believe that a policy or practice violates the law, even if no violation actually occurred. The amendments also protect employees from retaliation for disclosing or threatening to disclose a policy or practice that the employee reasonably believes poses a “substantial and specific danger to the public health or safety,” even if it does not violate the law.
The amendments therefore significantly expand the types of activities that are treated as protected “whistleblowing.” They also apply new, vague standards, including the employee’s reasonable belief, and which lawful actions by employers are perceived to pose a danger to the public or safety.
Expanded Prohibited Retaliatory Action
The amendments further expand the definition of prohibited retaliatory action. If an employee engages in activity protected under the law, the employer is prohibited from engaging in certain adverse actions. Prior to the amendments, the prohibited retaliatory actions were 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.”
However, the amendments expand the definition of retaliatory employment action to include “an adverse action taken by an employer … to discharge, threaten, penalize, or in any other manner discriminate against any employee … exercising his or her rights under this section … .” The amendments also specifically identify as “adverse action” contacting U.S. immigration authorities regarding citizenship status of the subject employee. Adverse actions now include any action that negatively impacts the working environment or future employment of the employee.
Longer Statute of Limitations
Under the amended law, the statute of limitations is increased from one to two years.
The new law provides for additional remedies not previously available to aggrieved employees, including front pay, punitive damages, and civil penalties (not to exceed $10,000). An employee who prevails under the law also may be entitled to injunctive relief, reinstatement (or front pay in lieu of reinstatement), lost wages, benefits, and reasonable costs and attorneys’ fees.
It also should be noted that if a court finds that an action was brought “without basis in law or fact,” a court may award reasonable attorneys’ fees and costs to the employer.
Notice Requirement for Employers
The New York State Department of Labor has issued a model notice for employers to use, which can be found here. The notice must be posted conspicuously in easily accessible and well-lighted places customarily frequented by employees and employment applicants.
Employers should evaluate and update their internal procedures for responding to employee complaints. If such policies are not already in place, employers should develop and adopt them. In light of these recent amendments, employers also should be prepared to handle a high volume of employee complaints given the potential for a surge of complaints.
In addition, employers should implement supervisor and management training regarding the expanded protections of the new law, including how to respond to employee complaints and the prohibition on retaliatory action.