Gregory (Greg) Keating, Nancy Gunzenhauser Popper, Ann Knuckles Mahoney, and Christopher Shur, attorneys in the Employment, Labor & Workforce Management practice, in the firm’s Boston office, co-authored an article in the Employee Benefit Plan Review, titled “Whistleblower Protections for Employees Expand in New York.”
Following is an excerpt (see below to download in PDF format):
New York Governor Kathy Hochul recently signed legislation that expands one of the state’s whistleblower laws with significant revisions (“Amendments”) to NY Labor Law § 740 (“Section 740”). The Amendments increase coverage for workers who allege they have been retaliated against for reporting suspected employer wrongdoing. The Amendments took effect on January 26, 2022, and broaden the scope of private-sector whistleblower protections by expanding whistleblower protections outside the scope of health care fraud and reporting of health and safety concerns. The Amendments also expand the pool of individuals protected by Section 740, among other changes.
Who Can Claim Protection Under the Amended Law?
The Amendments make it much easier for individuals to bring a retaliation claim under Section 740.
Current Employment No Longer Required
Section 740 prohibits retaliatory action by employers against an employee who engages in any activity related to exposing an employer’s violation(s) of law or regulation. The Amendments expand the definition of “employee” under Section 740 to include former employees as well as independent contractors who “carry out work in furtherance of an employer’s business enterprise and who are not themselves employers.” Previously, the definition was limited to individuals who perform services “for and under the control and direction of an employer for wages or other remuneration,” implying that only current employees could bring a claim under Section 740. Further, the statute had expressly provided, at paragraph 4(c), that if a claimant was an independent contractor, that would be a defense to an action brought under Section 740. The Amendments strike this sentence from the provision.
Whether former employees can pursue claims of whistleblower retaliation is a hot topic nationally. Last year, the U.S. Court of Appeals for the Sixth Circuit ruled that former employees could pursue such claims, creating a split in the circuits, as the U.S. Court of Appeals for the Tenth Circuit had previously held that former employees cannot pursue retaliation claims.
The U.S. Supreme Court may take up the issue, pending its decision on a petition challenging the Sixth Circuit ruling.