New York Broadens Protection for Whistleblowers

New York lawmakers have overhauled their whistleblower protection law for private-sector workers, expanding who is protected under the law as well as the activities protected from employer retaliation. Legal experts have predicted that “a significant increase in litigation” will result from further protection for whistleblowers.

The old version of the whistleblower law limited anti-retaliation protections to employees who raised concerns about “substantial and specific danger to the public health and safety” or “health care fraud.” This means that employer reprisals did not protect allegations of activities such as sexual harassment.

The change in law could result in an increase in litigation.

Gotham lawmakers also expanded the classification of workers who can claim protection against retaliation to include independent contractors and former employees.

And, in an unusual move, employers may not retaliate against whistleblowers by threatening to contact immigration officials over the worker’s citizenship status.

Lawmakers described the old protection for whistleblowers law as “restrictive.” The changes went into effect on Jan. 26.

Gov. Kathy Hochul signed the bill into law on October 28, 2022.

Expanded definition of employee

Independent contractors and former employees who make whistleblower claims are now protected from employer retaliation for reporting illegal or dangerous business activities.

Lawmakers note the importance of this aspect of the bill. It highlights workplace health and safety concerns during the COVID-19 pandemic as well as the ongoing misclassification of employees as independent contractors.

New York government officials have described “working off the books” as a “serious problem.” A joint enforcement task force on employee misclassification in 2014 identified nearly 26,000 instances of employee misclassification. In addition, in over 1,800 fraud investigations, the state Department of Labor discovered $264 million in unreported wages and almost $7.2 million in unpaid unemployment insurance contributions.

The new law protects both current and former employees.

The law also offers protection to whistleblowers who are former employees because employers can “continue to retaliate against a whistleblower by harming them in their current or future employment prospects, such as by attempting to blacklist someone from the industry,” the politicians said in the bill.

Broadened protection for whistleblowers who report illegal activities

Under the old version of the law, employees were protected only if they disclosed a practice that created and presented a substantial danger to public health or safety or health care fraud, lawmakers wrote in the measure.

“Thus,” they said, “an employee reporting any myriad of illegal activities that do not directly affect public health or safety, from sexual harassment to tax evasion, may be at risk for being retaliated against by their employer with no protection in law.”

Actual violation no longer needed

The amended protection for whistleblowers law removes the previous requirement that there be an actual violation of the law. Instead, employees now have protections if they “reasonably believe” that an employer’s conduct violates a law or regulation or poses a “substantial and specific danger” to public health or safety.

Expanded definition of law, rule, regulation

The definition of “law, rule or regulation” is now broader and includes any:

• Federal, state, or local executive order
• Rule or regulation promulgated pursuant to any such executive order
• Judicial or administrative decision, ruling, or order

“Obviously, these changes mean that an employer may not take retaliatory action against employees who report violations of executive orders, presumably including those that were enacted in response to the pandemic,” according to L. Micha Ordway, Jr., an attorney with Bousquet Holstein PLLC.

Expanded definition of retaliation (further protection for whistleblowers)

Employees are more protected under this law, restricting employers from retaliatory actions.

The new law expands retaliatory actions. Under the old version of the law, an employer could not take adverse action against a whistleblower by firing, suspending, demoting, or similar adverse action against an employee.

Forbidden employer retaliatory action now includes:

• Actions or threats that would adversely impact a former employee’s current or future employment
• Threatening to contact or contacting U.S. immigration authorities
• Reporting or threatening to report an employee’s citizenship or immigration status
• The citizenship of an employee’s family or household members

Expanded employer notification requirement

Employers must notify employees of their rights under the newly revised law by posting a notice in a conspicuous place.

Reduced employee notification requirement

Workers previously had to bring the conduct to the employer’s attention. This was to provide the employer with an opportunity to end the offending action. Under the new law, workers only have to make a good faith effort to notify the employer.

Additionally, the new law removes employee notification requirements in several instances. Employees don’t have to notify the employer if:

• There is an “imminent and serious danger to the public health or safety”
• The employee reasonably believes that reporting to the supervisor would cause the destruction of evidence or concealment of the activity
• Such activity, policy, or practice could lead to endangering the welfare of a minor
• The employee reasonably believes that reporting to the supervisor would result in physical harm to the employee or any person
• The employee reasonably believes that the supervisor is already aware of the activity and will not correct it.

Penalties

Employer penalties have also been increased. Front pay, back pay, civil penalties not to exceed $10,000, and punitive damages are now possible.

Statute of limitations lengthened

The time limit for workers to bring claims is now two years (previously one year).

Right to a jury trial

Whistleblowers now have a right to a jury trial.

Update policies, training

Legal experts recommend that stakeholders take another look at their whistleblower training and policies.

“Employers should promptly revisit their policies and training protocols to be sure that, first, managers know how to respond to employee complaints of alleged wrongdoing; and second, that their policies encourage employees to disclose any such concerns to their managers, to Human Resources, Legal, or other internal channels,” according to Phillip Berkowitz and Jeanine Conley Daves, attorneys at Little Mendelsohn P.C.