On January 26, 2022, amendments to New York Labor Law 740 will go into effect, dramatically expanding the scope of protection from retaliation for whistleblowers under New York law. These amendments should have significant impact on employers and employees alike.
Historically, New York State law has been widely considered to provide little to no protection for whistleblowers because the whistleblower had to show (i) that an actual legal violation was involved, and (ii) that the employer’s activity presented a “substantial and specific danger to the public health or safety.” Many practitioners viewed this very high bar as requiring the threatened activity to be akin to reporting a leak of radiation from a nuclear power plant.
The significant amendment removes the requirement that the employer’s activity present a “substantial and specific danger to the public health or safety,” and expands the protection to employees who blow the whistle on “any illegal business activity.” Additionally, while the old law required an actual legal violation, now, the employee can bring a retaliation claim if he or she had a reasonable belief that the employer’s activity violated a law, rule, or regulation, or posed a danger to public health or safety.
Other changes include (i) broadening the definition of what is considered a “retaliatory action” by the employer to include any actual or threatened action that would adversely impact any current or former employee’s current or future employment; (ii) covering former employees and independent contractors in the definition of “employee”; (iii) increasing the statute of limitations from one to two years; (iv) entitling plaintiffs to jury trials; and (v) providing potential recovery for front pay, and civil and punitive damages. There are also new requirements for employers to inform employees of their rights under Labor Law 740. The text of the amendment, including a redline showing the new language, can be seen here.
It is crucial for both employees and employers to be aware of these substantial changes in this statute. The amendment creates new obligations for employers (who should put guidelines in place for whistleblowers and update their employee handbooks), and makes it possible for more employees to bring whistleblower retaliation claims. Dunnington, Bartholow & Miller LLP is ready to assist in preparing for the potential new claims that may arise after this considerable expansion of employee protections.
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