January 23, 2022

Volume XII, Number 23

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Employee Whistleblower Protections Expanded Under New York Labor Law Section 740

On October 28, 2021, Governor Hochul signed legislation that expanded the scope of whistleblower protection under New York Labor Law Section 740. The new amended law expands the scope of individuals protected, the definition of protected activity, and the types of employment related actions which can constitute retaliation, the remedies and the notice requirements for employers. The amended law will go into effect on January 26, 2022.

New York Labor Law Section 740 currently provides protection from retaliation to employees who 1) disclose or threaten to disclose to a supervisor or a public body an activity, policy or practice of the employer that violates a law, rule or regulation or creates a danger to public health and safety; 2) provide information to or testify before any public body conducting an investigation, inquiry into the employer’s violation; or 3) object to or refuse to participate in the activity or policy that violate the law.

Expanded Definition Of Employees

The new amendments expand the definition of employee to include former employees and independent contractors.

Expanded Protected Activity

The amendments extend the definition of Protected Activity to employees who report or threaten to report any activity that they reasonably believe is in violation of law, rule or regulation. The amendments further clarify the definition of “law, rule or regulation” includes any state, local, and federal law, rule, and regulation, as well as any judicial and administrative decisions.

The standard for determining whether public disclosure is Protected Activity has also been loosened. The amendments only require that the employee “in good faith reasonably believes” the activity has or will occur, and that the employee “in good faith reasonably believes” the activity is an illegal business activity. There is no requirement that the employee provide notice to the employer.

Expanded Prohibited Retaliatory Action

The amendments define retaliatory employment action to include discharge, suspension, demotion, discrimination and “any other” adverse action. Adverse actions can include action which adversely impacts future employment or contacting United States immigration authorities regarding citizenship status.

Longer Statute Of Limitations

The statute of limitations is increased from one to two years.

Jury Trial And Additional Remedies

Employees who commence a retaliation claim under the amended statute are now entitled to a jury trial. Additionally they can seek injunctive relief, reinstatement, compensation for lost wages and benefits, civil penalties not to exceed ten thousand dollars, and compensation for emotional distress.

Notice Requirement For Employers

Employers are now required to inform employees of their protections and rights under Section 740 by posting notice. The Section 740 Notices must be placed in a “well-lighted” and easily accessible area frequently populated by employees.

Recommendations For Employers

In addition to complying with new notice requirements, employers should adopt whistleblower policies or revisit current ones, make sure whistleblower policies contain reporting mechanisms, and train managers and supervisors on how to appropriately deal with such complaints given the expansion of Section 740.

Jill Chow contributed to this article.

Jackson Lewis P.C. © 2022National Law Review, Volume XI, Number 335
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About this Author

Mary Smith NY Litigation Manager Real Estate Counseling
Mary A. Smith Principal and Office Litigation Manager

Mary A. Smith is a principal and litigation manager in the White Plains, New York, office of Jackson Lewis P.C. She serves as a trusted advisor to clients on a broad range of litigation and counseling matters, helping them to understand how developing workplace issues and trends impact their businesses.

Mary defends employers against claims of discrimination (gender, race, age, disability and national origin), sexual harassment, retaliation, breach of contract, misappropriation of confidential information and related tort...

914-872-6907
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