Great news for workers in the State of New York: Governor Kathy Hochul recently signed into law an amendment to the New York Labor Law that dramatically expands safeguards against and remedies for employers’ whistleblower retaliation.
Historically, New York has “not recognize[d] the tort of wrongful discharge,”[1] including “for firings that violate public policy such as . . . discharge for exposing an employer’s illegal activities.” Lobosco v. N.Y. Tel. Co./NYNEX, 96 N.Y.2d 312, 316 (2001) (citing Murphy v. Am. Home Prods. Corp., 58 N.Y.2d 293, 297, 301 (1983)). Although the Empire State is home to some of the most employee‑friendly laws (like the antidiscrimination New York City Human Rights Law), it has trailed other states that have long recognized a common law tort of wrongful termination in violation of public policy. E.g., Pierce v. Ortho Pharm. Corp., 84 N.J. 58, 72–73 (1980); Tameny v. Atl. Richfield Co., 27 Cal. 3d 167, 178 (1980).
Instead, New York courts have deferred to the state legislature to protect workers who pipe up about illicit or unsafe activities. The State has codified its antiretaliation principles across several statutes, including ones that specifically defend the whistleblowing of employees in the public sector and particular industries. See, e.g., N.Y. Civ. Serv. Law § 75‑b (government); N.Y. Lab. Law § 741 (health care).
For most New York workers, the only applicable antiretaliation legislation—New York Labor Law Section 740—has fallen short. Commentators have long criticized Section 740’s limited scope and strength. See, e.g., Remba v. Fed’n Emp’t & Guidance Serv., 76 N.Y.2d 801, 803 (1990). But with the new amendment to Section 740, workers have cause to rejoice. Here are some of the law’s most prominent improvements:
- Broader Reach. The amendment grows Section 740’s coverage by reexamining the definition of “employee.” The law now covers the claims of independent contractors and former personnel. Compare N.Y. Lab. Law § 740(1)(a), (4)(c) (2019), with N.Y. Lab. Law § 740(1)(a) (2022). Accordingly, it also doubles the statute of limitation for bringing claims from one year to two. Id. § 740(4)(a).
- Panoply of Relief. Section 740 adds to its array of remedies, now supplying front pay, in lieu of reinstatement, and two powerful motivators for employers to act within bounds: a civil penalty of up to $10,000 and punitive damages. § 740(5).
- Greater Understanding of Retaliation. The law more expansively conceptualizes what constitutes retaliatory conduct. For example, it expressly names threats to future employment and immigration status[2] as prohibited conduct. § 740(1)(e).
- Relaxing the Bar to Blow the Whistle. Before, private employees risked sanctioned termination if they called out merely suspected, rather than confirmed actual, wrongdoing. See, e.g., Bordell v. Gen. Elec. Co., 88 N.Y.2d 869, 870–71 (1996). Thankfully, now employees need only have a reasonable belief that something illegal or dangerous is occurring for them to obtain cover from the statute’s protections. N.Y. Law § 740(2)(a) (2022).
If you work in New York and think your employer has fired you because of whistleblowing, you might be wondering if these improvements apply to you.
Despite its enactment on October 28, 2021, Section 740’s policy changes only “take effect” on January 26, 2022. S.B. 4394, 244th Leg. Sess. § 3 (N.Y. 2021). “A postponement of the effective date of a statute is strong evidence that the [New York] Legislature did not intend for it to be retroactive,” although the bill’s text is silent on the subject. Bonnaig v. Walton, 968 N.Y.S.2d 368, 378 (N.Y. Cnty. Sup. Ct. 2013); see also Matter of Deutsch v. Catherwood, 31 N.Y.2d 487, 489 (1973) (“If the amendments were to have retroactive effect, there would have been no need for any postponement.”). Absent any express legislative intent in favor of retroactivity, courts will only apply the amended Section 740 moving forward, consistent with past interpretations of labor legislation with similarly phrased provisions. See, e.g., Gold v. N.Y. Life Ins. Co., 730 F.3d 137, 143–44 (2d Cir. 2013); Esmilla v. Cosmopolitan Club, 936 F. Supp. 2d 229, 238 & n.6 (S.D.N.Y. 2013).
Regardless, for those who have experienced retaliation as a result of whistleblowing, you should consult an employment lawyer. The experienced New York attorneys at Sanford Heisler Sharp can help assess the circumstances of your case.
Footnotes
[1] New York has recognized a common law contract claim cabined to the limited circumstances of lawyers blowing the whistle on unethical conduct that violates the rules of professional responsibility. E.g., Wieder v. Skala, 80 N.Y.2d 628, 638 (1992) (holding that a lawyer “stated a valid claim for breach of contract based on an implied‑in‑law obligation in his relationship” with his law firm). Even this cause of action lacks the deterrent force that accompanies the availability of punitive damages.[2] For more on this topic, see Kate MacMullin, Threatening Employees Based on Their Immigration Status Can Constitute Unlawful Retaliation Under Wage and Hour Laws, Sanford Heisler Sharp: Working for Just. Blog (Aug. 26, 2021), https://sanfordheisler.com/threatening-employees-based-on-their-immigration-status.