Imagine this: You run a food delivery service. One day, you learn that a new operations consultant you recently contracted with to help with payroll has complained to the local health department and reported a suspected violation on your business. Specifically, she has reported that the food your company produces and delivers to senior centers is contaminated. Now you have a major PR problem on your hands. And, you’re angered that the consultant didn’t raise the issue internally before going public. Moreover, you are sure the food your company produces is safe. Can you terminate your contract with her?
Not so fast.
Effective January 26, 2022, amendments to New York Labor Law § 740 significantly expand whistleblower laws in the workplace. Important changes include (1) expansion of the definition of “employee” and what constitutes protected activity, (2) elimination of certain employer notification provisions, (3) expansion of the definition of “retaliatory actions”, and (4) extension of the statute of limitations and inclusion of an entitlement to a jury trial, and (5) new posting requirements. Employers should familiarize themselves and train their managers in these expanded protections. The fast-changing employment law landscape, particularly with frequent issuance of executive orders at the local, state and federal levels, creates numerous pitfalls for employers in this area.
Employee, redefined
Pursuant to the recent amendments, whistleblower protections now extend not only to current employees, but also “former employees” as well as self-employed independent contractors who “work in furtherance of an employer’s business enterprise who are not themselves employers.”
What is Protected Activity?
The law now protects employees from retaliation by the employer where the employee discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that the employee reasonably believes is in violation of law, rule or regulation (including executive orders!) or is a substantial and specific danger to the public health or safety whether or not the complained-of violation is within the employee’s job duties. Whereas the pre-amendment statutory language specifically required actual violations of the law, an employee’s reasonable belief is now sufficient to trigger statutory whistleblower protections.
Additionally, the employee is also protected from retaliation if he or she provides information or testifies in a regulatory investigation, hearing or inquiry about an employer’s practices. Lastly, an employee is protected if he or she objects to participation in any activity, policy or practice of his or her employer.
Elimination of Employer Notification Provisions
Prior to the amendments, Section 740 of the Labor Law required that the employee actually notify the employer and give the employer a reasonable opportunity to cure any alleged wrongdoing. The statute is now amended in two significant ways:
- The employee is now required only to make a good faith effort to notify his or her employer before affording such employer an opportunity to correct;
- Employees are not required to make a good faith effort to notify where (1) there is an imminent and serious danger to the public health or safety, (2) employee reasonably believes that notification will result in destruction of evidence or concealment, (3) the activity could reasonably be expected to lead to endangering a minor, (4) employee reasonably believes that notification to supervisor would result in physical harm to employee or another person, (5) employee reasonably believes that employer is already aware of the complained activity and will not correct it.
What is Considered Retaliation?
A retaliatory action is now defined as “an adverse action taken by an employer or his or her agent to discharge, threaten, penalize, or in any other manner discriminate against any employee or former employee exercising his or her rights under this section. This expanded definition covers the following broad categories:
- Adverse employment actions or threats, including, but not limited to, discharge, suspension or demotion;
- Actions or threats that would adversely impact a former employee’s current or future employment;
- Threats to contact or actual contacting of immigration authorities concerning employee’s suspected or actual citizenship status.
Expansion of Remedies
The statute of limitations for filing a civil claim under Section 740 has been extended to two years. Additionally, jury trials are available for claims thereunder as well as penalties up to $10,000.
Posting Requirements
Employers are now required to inform their employees about their rights under the Labor Law through conspicuous postings.
Three Steps Employers Should Take Now
- Review and, if necessary, revise your anti-retaliation and whistleblower policies.
- Train your managerial employees to recognize when issues raised by employees may touch upon the provisions of this law.
- Prepare appropriate postings to inform your employees about their rights under the law.