By Tracey I. Levy

New York has adopted new whistleblower law protections effective January 26, 2022 that create substantial liability exposure for employers.  Employees – both current and former, as well as individuals working as independent contractors – who report or object to any perceived violation of law, rule, or regulation will be protected against retaliation for making the report.  While lofty in its objectives, enforcement of the whistleblower law will present challenges for employers because it cloaks anti-retaliation protections around employees in a myriad of new circumstances.  Fortunately, there are some concrete actions that employers can take to help mitigate those risks.

Expansive Scope

Currently, employees are protected against retaliation under state law in discrete, and limited contexts, such as in regard to complaints of harassment or discrimination under the New York State Human Rights Law, or complaints by health care employees regarding conduct presenting a significant threat to public health or safety under the whistleblower law prior to its recent amendments.  The new whistleblower law extends those protections to the following covered conduct:

• any report that an individual “reasonably believes” to be in violation of any law, rule or regulation – involving any level or branch of government, and regardless whether the reported violation pertains to a matter within the employee’s purview, and
• any activity, policy or practice the employee “reasonably believes” presents a “substantial and specific danger” to public health or safety.

Employees are encouraged to report covered conduct to any public body – again at any level or branch of government – including law enforcement at any level and any member or employee of a legislative or judicial body.

Prerequisite to Public Reporting

Before disclosing a legal violation to a public body, the employee must have made a “good faith” effort to notify a supervisor of the violation and allowed the organization a reasonable opportunity to correct it.  However, the new law recognizes many exceptions to this internal notice requirement including when there is:

• imminent and serious danger to public health or safety;
• risk to endangering the welfare of a minor;
• reasonable belief that reporting to the supervisor would result in destruction or concealment of evidence;
• reasonable belief that reporting internally will lead to physical harm to the employee or to other individuals; or
• reasonable belief that the supervisor already knows of the covered conduct and will not correct the issue.

Protected Actions

whistleblower protections will apply if the employee experiences any retaliatory adverse action taken to discharge, threaten, penalize or in any other manner discriminate against the employee – including in regard to terms and conditions of employment, current or future employment, or reporting suspected citizenship or immigration status of an employee or family or household member – because the employee either:

• disclosed or threatened to disclose covered conduct;
• participated in an investigation of such conduct; or
• objected or refused to participate in any such conduct.

Abundant Remedies

Employees are afforded a private civil right of action, with a right to a jury trial, for claimed violations of the whistleblower law, and can be awarded the full panoply of legal remedies, including injunctive relief, reinstatement or front pay, back pay, and their legal costs and attorneys’ fees.  Punitive damages are also available if the employee establishes the employer’s violation of the whistleblower law was “willful, malicious or wanton.”   In addition, employers face a civil penalty of up to $10,000.  An employee faces liability to the employer for legal fees and costs if a court finds that the whistleblower action is frivolous.

Why Employers Should Be Concerned

The Equal Employment Opportunity Commission’s charge filing statistics reflect that retaliation claims, which hovered in the 25 to 30 percent range for nearly a decade, began increasing steadily starting in 2007, the year after the U.S. Supreme Court in Burlington Northern Santa Fe Railroad Co. v. White adopted a broad definition of retaliatory behavior under Title VII.  Last year, nearly 56 percent of all charges filed with the EEOC included a retaliation claim.  New York employers should similarly anticipate that, with the grounds for invoking whistleblower protections vastly expanded, and the state law definition of what comprises retaliatory conduct newly broadened, they too will face a significant risk of having to defend a whistleblower claim.

Three Employer Actions

Posting:

Employers are required to post a notice that informs employees of their protections, rights and obligations under the new whistleblower law, but the Department of Labor has not yet issued that form notice.

Policy:

While the law does not require employers to adopt a whistleblower policy, it would be prudent for those employers that do not already have such a policy in place to add it to their employee handbooks.

Training:

Further, because this law centers around the actions of supervisors – in receiving employee concerns of covered conduct, and in how they treat an employee after a report is made – employers may want to educate (or reinforce existing training for) their supervisors with regard to:

• the employer’s expectations on compliance with legal obligations and maintaining a safe workplace;
• the appropriate reporting channels to escalate questions or concerns regarding possible legal violations or unsafe conditions;
• the conduct covered by the whistleblower law;
• how to respond to employee concerns related to covered conduct;
• the prohibition against retaliation, with examples of prohibited actions; and
• how to engage with an employee after that employee has reported a concern related to covered conduct.

Consistent guidance and regular training are employers’ best options to prepare supervisors to respond appropriately when employees raise concerns that might bring them within the protections of the whistleblower law, and thereby reduce their risk of liability.