New York Expands Whistleblower Protections Under Labor Law Section 740
New York State significantly expanded whistleblower protections for private sector employees alleging retaliation under New York Labor Law Section 740 (“Section 740”), effective January 26, 2022. These amendments expand the class of individuals afforded protection, the types of activities that are protected, the range of actions that may be considered retaliatory and the available remedies under the law. The new law also imposes a new posting requirement on employers.
Broader Scope of Protected Activity
The recent amendments substantially expand the scope of protected activity under Section 740. The new provision protects from retaliation a covered individual who discloses (or threatens to disclose) to any supervisor or public body any activity, policy or practice of the employer that (i) is an actual violation of a law, rule or regulation; (ii) the individual reasonably believes violates any law, rule or regulation; or (iii) the individual reasonably believes presents a substantial or specific danger to public health or safety. Prior to the amendments, protections were afforded only to individuals reporting an actual violation of a law, rule or regulation that created a substantial danger to public health or safety. The amendments also notably extend the definition of law, rule or regulation to encompass executive orders or any judicial or administrative decision, ruling or order.
Expanded Definition of Those Protected
The amended law also expands the definition of employee to include former employees, without any time limit, and independent contractors. The revised provision also explicitly extends protections to employees who act within the scope of their job duties when making a disclosure, an application that was not clear under the prior version of the law.
Individuals are not necessarily required to notify the employer prior to reporting an alleged violation to a public body. As amended, employees need only make a good faith effort to notify their employer and, in the specific instances enumerated below, the notice requirement is removed:
- There is an imminent and serious danger to the public health or safety;
- The employee reasonably believes that making a report to a supervisor would result in (i) the destruction of evidence or other concealment of the activity, policy or practice; or (ii) physical harm to the employee or any other person;
- Such activity, policy or practice could reasonably be expected to lead to endangering the welfare of a minor; or
- The employee reasonably believes that the supervisor is already aware of the activity, policy or practice and will not correct it.
Expanded Definition of Retaliatory Action
The recent modifications to Section 740 also expand the definition of retaliatory action to include actual adverse actions and threats to take actions that would discriminate against or adversely affect an individual’s terms and conditions of employment. These actions include, but are not limited to, discharge, suspension or demotion; actions that adversely impact an individual’s future employment; and contacting or threatening to contact immigration authorities regarding an employee or their family.
The modifications augment the existing damages available to covered individuals. In addition to injunctive relief, reinstatement, lost pay and benefits and attorneys’ fees and costs, a court may now also order front pay in lieu of reinstatement, punitive damages for willful, malicious or wanton violations and civil penalties of up to $10,000. Individuals bringing an action are now entitled to a jury trial, whereas actions were previously conducted as bench trials. Finally, the amendments double the existing statute of limitations, allowing covered individuals up to two years to bring an action for violations of the law.
Employers must now post a notice under Section 740. This required posting was released by the DOL on February 12, 2022 and can be found here: https://dol.ny.gov/system/files/documents/2022/02/ls740_1.pdf. The posting must be in a conspicuous, easily accessible and well-lit location customarily frequented by employees and applicants for employment. Employers who are operating remotely should provide the notice to all employees by e-mail.
Employers should review and update their policies to ensure that anti-retaliation prohibitions include the conduct covered by Section 740. Employer should also post the required notice and send copies to all employees who are working remotely and train supervisors concerning the appropriate handling of any employee reports under the amended provision.
Please feel free to reach out to any of our attorneys if you have questions or would like our assistance in complying with the amendments to Section 740.