New York Significantly Expands Its Whistleblower Law

​The state of New York has amended its whistleblower law to make it one of the most expansive in the country, providing remedies, including potentially punitive damages, to employees, former employees and independent contractors.

The requirement to report any suspected wrongdoing first to the employer now has many exceptions. Moreover, a worker may blow the whistle on any conduct the individual reasonably believes violates any law, rule or regulation, or executive order or any judicial or administrative decision, ruling or order, noted Philip Berkowitz, an attorney with Littler in New York City. Workers also are protected for reporting any conduct that they reasonably believe constitutes a substantial and specific danger to the public health or safety, he added.

"Retaliation claims already ranked high among the types of claims asserted in COVID-19 employment lawsuits," wrote Simone Francis, an attorney with Ogletree Deakins in St. Thomas, Virgin Islands, and New York City, and Rae Gross, an attorney with Ogletree Deakins in the Detroit metropolitan area, in a joint e-mail.

Expansive new whistleblower laws like New York's "make it probable that an increasing percentage of lawsuits will include whistleblower claims either alone or in conjunction with other statutory and common-law theories of recovery," they predicted.

New York is joining other states with broad protections for whistleblowers, including California and New Jersey. But New York's new provisions are particularly expansive.

Expect an Increase in Litigation

"Employers can expect a significant increase in litigation and potential liability for whistleblower claims in New York," wrote Greg Keating, an attorney with Epstein Becker Green in Boston, and Christopher Shur, an attorney with Epstein Becker Green in New York City.

They noted that the New York whistleblower law now has an expanded definition of retaliation. This definition includes:

• Discriminating against someone for exercising their rights under the law.
• Taking actions or threatening to take actions affecting current or future employment.
• Contacting U.S. immigration authorities.
• Threatening to report the suspected immigration or citizenship status of a whistleblower or a whistleblower's family or household member.

Employer Notification Often Isn't Required

While a good-faith effort to notify employers of alleged wrongdoing remains, Keating and Shur noted that employer notification isn't required in the following cases:

• There is imminent and serious danger to the public health or safety.
• The whistleblower reasonably believes that reporting to the supervisor or employer would result in destruction of evidence or other concealment of the activity, policy or practice.
• Such activity, policy or practice could reasonably be expected to lead to endangering the welfare of a minor.
• The employee reasonably believes that reporting to the supervisor would result in physical harm to the employee or any other person.
• The employee reasonably believes that the supervisor or employer is already aware of the activity, policy or practice and won't correct it.

The last of these "is such an enormous exception to the internal disclosure requirement that the requirement may as well not exist," said Gerald Hathaway, an attorney with Faegre Drinker in New York City.

Action Steps

Nonetheless, David Baron, an attorney with Hogan Lovells in New York City, said employers should implement policies that encourage employees to report internally if they believe they've been made aware of a violation of the law.

Employers should develop protocols that allow employees to report anonymously possible violations of law within the company, said Linda Jackson, an attorney with Arent Fox in Washington, D.C. "Such protocols may encourage employees who fear retaliation to come forward prior to reporting to an outside agency.

"Additionally, an expansive whistleblower policy that provides guidance for employees and sternly rebukes any forms of retaliation may aid in creating a workplace where employees feel that their concerns are valued and any complaints will be adequately addressed."

Berkowitz said New York employers also should:

• Revisit codes of conduct to ensure that all employees know what is considered acceptable and unacceptable behavior.
• Revisit internal and external whistleblower and reporting policies and procedures to be sure individuals know how to bring to the employer's attention conduct that may be unlawful, that they perceive to be unethical or that constitutes a danger to the public health or safety. Policies must also make clear that bringing knowingly false claims will subject employees to discipline.
• Review training protocols for HR and managers on how to respond to complaints.
• Post notice of the law.

In addition, Berkowitz said, employers should review their internal investigation procedures for the following characteristics:

• The procedure should provide protections for the confidentiality of whistleblowers, consistent with a full and fair investigation.
• The company should ensure that investigations are free from bias.
• The procedure should provide for appropriate handling of complaints to ensure that the right people or departments investigate.
• The company must identify individuals who are qualified to conduct investigations.
• The organization should ensure that investigations are carried out, when appropriate, under the protection of attorney-client privilege.
• The company needs to consider how and when to communicate to regulators or others regarding the claims.

Ideally, an internal report should go to someone who has no control or influence over the whistleblower's employment status, Baron said. "A complaining employee's supervisors should be advised of complaints only if and to the extent they need to know—for example, to conduct a proper investigation," he said.

The right investigator may include someone in HR, compliance staff, inside counsel or outside counsel, depending on the situation, Baron noted.

"The best policy is one of compliance," Hathaway said. "Don't engage in illegal behavior that can be the subject of an employee complaint."

He added, "Sometimes an employee can reasonably believe that a violation of the law is going on, but the employee is just wrong. In those cases, there can be a calm, candid conversation with the complaining employee to explain why the issue being raised does not involve a violation of any law."