NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5696A
SPONSOR: Benedetto TITLE OF BILL: An act to amend the labor law and the civil service
law, in relation to protection of employees and former employees against
retaliatory action by employers
PURPOSE: This bill provides greater protections for "whistleblower"
employees who disclose information about illegal activities of their
employers.
SUMMARY OF PROVISIONS:
Section 1: Amends Labor Law section 740 by clarifying the definition of
"law, rule or regulation," to clearly include state, local and federal
laws, rules or regulations and state, local and federal judicial and
administrative decisions. It clarifies the definition of "public body"
to include any department of the executive branch and any division,
board or bureau of any public body. Expands the term "retaliatory
action" to include the penalization or discrimination against an employ-
ee or former employee who "blew the whistle".
This section also specifies that an employee will be protected against
retaliatory action for disclosure of employer activity that the employee
in good faith reasonably believes has occurred or will occur and in good
faith reasonably believes constitutes illegal business activity.
Adds a "good faith" requirement relating to the effort of the employee
to bring an illegal activity to the attention of the employer in order
to be protected, and creates certain exceptions when such prior to
notice to employer is not necessary. It also extends the statute of
limitations from one year to two years for bringing a civil action for
retaliatory action by an employer. Further, it requires employers to
inform their employees of their rights under this section.
Adds a right to a jury trial.
Adds remedies for whistleblowers who suffer impermissible retaliatory
actions, and restricts situations when employer is entitled, in court's
discretion, to attorney's fees when successful.
Section 2: Amends Labor Law section 741, which allows a health care
employee to seek enforcement of section 741 pursuant to Labor Law
section 740 to conform to the above amendments to Labor Law section 740.
Section 3: Amends Civil Service Law 75-b (2) by: A) Adding protections,
to create parity for whistleblower protections for public employees as
for private employees under Labor Law 740; and B) Limiting prior notifi-
cation to employer requirements.
Section 4: Amends Civil Service Law 75-b (3) to include under the defi-
nition of retaliatory action, the elimination of a job title that
uniquely singles out such employee.
Section 5: Adds a new Civil Service Law 75-b (5) to require all public
employers to inform their employees of their whistle blower rights under
this Section of law.
EFFECTS OF PRESENT LAW WHICH THIS RILL WOULD ALTER: Labor Law § 740
prohibits private employers from firing or taking any other adverse
employment action against an employee who refuses to participate in an
illegal business activity, or who discloses such illegal activity to a
public body, if the illegal activity presents a "substantial and specif-
ic danger to the public health or safety." This protection does not
apply, however, unless the employee has brought the illegal behavior to
the attention of a supervisor and has given the employer an opportunity
to correct the behavior. Civil Service Law § 75-b prohibits public
employers from firing or taking any other adverse employment action
against a public employee who discloses information:
(1) regarding a violation of a law, rule or regulation presenting a
substantial and specific danger to the public health and safety; or
(2) regarding any action by a Public employer which the employee reason-
ably believes constitutes a violation of any federal, state or local
law, rule or regulation. Prior to disclosing the information, the
employee must make a good faith effort to inform his or her employer and
to give the employer a reasonable time to take appropriate action,
unless there is an imminent and serious danger to the public health or
safety.
JUSTIFICATION: In 1984, private and public employees in New York
State who report illegal or improper activities by their employers are
given certain Protections under New York's whistleblower protection law.
Unfortunately, there are several weaknesses in the current whistleblower
law. These weaknesses greatly limit the protections provided to employ-
ees. Further, it deters honest employees from revealing illegal activ-
ities of their employers, out of the legitimate fear that they will be
dismissed or otherwise retaliated against for reporting such violations.
First, Labor Law § 740 only protects employees who disclose illegal
activities that present a "substantial and specific danger to the public
health or safety." Thus, if an employee becomes aware that his or her
employer is knowingly defrauding its customers, or stealing from govern-
ment authorities, for example, the whistleblower law will provide no
protection to the employee. This bill's amendment maintains the current
protections for employees who blow the whistle on public health or safe-
ty violations or health care fraud, but expands that protection to
employees who blow the whistle on any "illegal business activity."
Second, a private employee who in good faith reasonably believes that
his or her employer has engaged in actions which the employee in good
faith reasonably believes constitute a violation of law can be termi-
nated for revealing that information to government authorities or the
employer, if it turns out that no violation can be proved in court. The
Civil Service Law was amended in 1986 to protect public employees who
reasonably believe that a violation has occurred, but private employees
still do not have that protection.
New York's whistleblower statutes are also not especially effective
because they generally do not apply unless the employee has brought the
illegal behavior to the attention of a supervisor and has given the
employer an opportunity to correct the illegal behavior. Unfortunately,
many employees do not know of this requirement, and are never told by
their employers that they can be fired if they do not first tell the
employer of the illegal activity. The employer notification requirement
set forth in Labor Law § 740 means that private employees, unlike public
employees under Civil Service Law § 75-b, can be fired for reporting
violations, unreported to the employer, even where such present an immi-
nent and serious threat.
Although Labor Law § 740 prohibits adverse employment actions against
private employees who refuse to participate in illegal business activ-
ities, Civil Service Law § 75-b does not contain a similar provision.
This means that public employees can be fired for refusing to violate
the law. Finally, the remedies available to employees under Labor Law §
740 are clearly inadequate, and the right to a jury trial is not
provided for.
This bill addresses these numerous defects in the current Whistleblower
statutes. It implements certain recommendations made by New York State
Law Revision Commission following a five-year study of the law, and
enacts, for all employees, protections similar to those extended by
Labor Law § 741 to healthcare workers during the 2002 legislative
session.
New York State should encourage, not discourage, employees who wish to
report violations of law by their employers. Although the "Whistleblower
Law" enacted in 1984 was a good first step, experience over the past 25
years has shown that the law is simply inadequate. By making the neces-
sary reforms to strengthen the law, this bill will act as a deterrent to
employers who might otherwise engage in illegal activity, will protect
the public from such wrongdoing, and will ensure that the honest and
law-abiding employees who have the courage to reveal illegal activities
are protected against retaliation by their employers.
LEGISLATIVE HISTORY: Similar to Attorney General departmental bills
2007 (A.3487); 2004 legislative session (A.8794), and a similar bill was
submitted during the 2001-2002 legislative session. This bill is similar
to S.5737/A.7144A (Klein/Benedetto), which passed the Assembly and
Senate, but was vetoed by Governor Paterson.
FISCAL IMPLICATIONS: This bill is fiscally neutral.
EFFECTIVE DATE: This act shall take effect 90 days after it shall have
become a law.
