Jul 01, 1995 General Employment Issues

New York Appellate Courts Rule on “Whistleblower” Law

The New York State Labor Law includes what is known as a “Whistleblowers’ Statute.” That law (Labor Law § 740) prohibits a private employer from retaliating against an employee who discloses or threatens to disclose to a “supervisor or to a public body” that the employer is in violation of a “law, rule, or regulation” that presents a “substantial danger to the public health or safety.” The statute is narrowly drawn to address only a specific category of whistleblowing. An employee is not protected in disclosing any and all violations of law but only those that involve a threat to “health or safety.” Further, disclosure of activity that threatens only an individual’s safety, rather than that of the public, will not provide the basis for a claim under the statute. Two recent decisions by the Appellate Division – New York’s second highest court – have provided further guidance on the scope of the Whistleblower Statute.

In the first case, Bordell v. General Electric Co., 208 A.D.2d 219, 622 N.Y.S.2d 1001 (3d Dept. 1995), the plaintiff employee asked the court to construe the statute so as to extend its protection to employees harboring a mere “reasonable belief” that “an activity, policy or practice of the employer…is in violation of a law, rule or regulation.” The employee alleged that he was terminated by General Electric for informing the Department of Energy (“DOE”) of his opinion, based on his preliminary calculations, that seven other employees might have been exposed to radiation at levels sufficient to trigger the mandatory reporting requirements of a DOE order.

The Appellate Division affirmed the trial court’s dismissal of the employee’s whistleblower claims, ruling that the statute requires proof of an actual violation of law by the employer; an employee’s good-faith, reasonable belief that a violation may have occurred is insufficient. The Court noted that “the statute’s laudable purpose of encouraging employees to report violations of health and safety laws and regulations would be furthered by our adoption of a `reasonable belief standard,'” but concluded it could not do so because “the Legislature did not intend to impose (and, in fact, intentionally rejected) a `reasonable belief’ standard when it enacted Labor Law § 740.” Accordingly, an employee who has the reasonable, but erroneous, belief that his or her employer is violating the law is not protected.

In the second case, Rodgers v. Lenox Hill Hospital, 626 N.Y.S.2d 137 (1st Dep’t 1995), the plaintiff, who was the director of the Emergency Medical Services Department of Lenox Hill Hospital, alleged that he was fired in retaliation for his investigation into the manner in which a particular emergency ambulance call had been handled by paramedics from the Hospital, and his testimony before the New York State Department of Health with regard to the incident. The Hospital moved to dismiss the complaint on the ground that the employee lacked personal, first-hand knowledge of the violations in question. The Appellate Division rejected this argument, stating that “the firsthand knowledge requirement advanced by the [Hospital] is neither required by the relevant portion of the whistleblower statute, nor by the caselaw interpreting this section.” The court then distinguished the Bordell decision by stating that “the plaintiff in that case alleged that he was fired for expressing an uncorroborated preliminary opinion” and “could cite no law, rule or regulation that had been violated by the Company,” while Rodgers pointed to uncontested facts supporting numerous actual violations by the Hospital.

Thus, the recent case law makes clear that the New York “Whistleblower Statute” applies only where the employee can allege that he or she disclosed an actual, specific violation by the employer of a law, rule or regulation, but that the plaintiff need not have firsthand knowledge of the violation.