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28 January 20223 minute read

New York substantially expands employee whistleblower protection

New York State recently enacted legislation amending and significantly expanding whistleblower protections under § 740 of the New York Labor Law. The amended law, effective as of January 26, 2022, prohibits an employer from retaliating against any employee who discloses, or threatens to disclose, an activity, policy or practice that the employee “reasonably believes” is in violation of law, rule or regulation or that the employee “reasonably believes” poses a substantial and specific danger to the public.

Under prior law, Section 740 was far more restrictive and required proof of an actual violation of law that created and presented a substantial danger to public health or safety, or constituted healthcare fraud.

In addition to expanding employee protected activity, the amendment expands the scope of retaliatory action to specifically include:

  1. Actual or threatened adverse employment actions (such as termination, demotion or suspension)

  2. Threats against a former employee’s current or future employment and

  3. Threatening to contact or contacting immigration authorities.

The amended law extends whistleblower protections to independent contractors and former employees and provides that Section 740 protects employees whether or not they are acting within the scope of their job duties.  It also clarifies that “law, rule or regulation” includes executive orders as well as judicial or administrative decisions.  

Other changes include a lengthened statute of limitation (from one to two years), additional available relief and notice posting requirements. In addition to the previous remedies, including the availability of injunctive relief, re-instatement, compensation for lost wages and benefits and payment of attorneys’ fees, the amendment adds a new civil penalty of up to $10,000, allows for recovery of front pay in lieu of re-instatement and punitive damages, and provides a right to a jury trial – exposing employers to significant additional potential liability.

Under the amended law, employers are also required to inform their employees of the protections, rights and obligations under Labor Law § 740 (and under § 741 for healthcare employees) by conspicuously posting a notice in an easily accessible and well-lit place customarily frequented by employees.

In addition to complying with the notice posting requirements, New York employers are encouraged to review any whistleblower policies and procedures as well as consider training their managers on the expanded whistleblower protections.

If you have any questions regarding these developments, please contact your DLA Piper relationship attorney, any member of the DLA Piper Employment group or any of the authors of this alert.

This information does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only. No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.