Provides protection to employees and former employees from retaliatory actions by employers for the reporting of illegal or dangerous business activities.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5144A
SPONSOR: Benedetto TITLE OF BILL:
An act to amend the labor law, in relation to retaliatory actions by
employers
TITLE OF BILL:
An act to amend the labor law, in relation to retaliatory actions by
employers
PURPOSE OR GENERAL IDEA OF BILL:
The bill expands protections for "whistleblower" employees.
SUMMARY OF PROVISIONS:
Section 1 of this bill amends the definition of "employee" to include
former employees and independent contractors; clarifies that the defi-
nition of "law, rule, or regulation" has included executive orders as
well as judicial or administrative decisions; clarifies the definition
of a "public body;" expands the definition of a retaliatory action to
include actions or threats to take actions that would adversely impact a
former employee's current or future employment and contacting or threats
to contact immigration authorities; provides protection to employees
whether or not they were acting within the scope of their job duties;
provides protection for employees who disclose or threaten to disclose
to a supervisor or to a public body an activity, policy or practice of
the employer that the employee reasonably believes is in violation of
law, rule or regulation or that the employee reasonably believes poses a
substantial and specific danger to the public health or safety; provides
exceptions for which employer notification is not required; extends the
statute of limitations to two years; provides the right of parties to a
jury trial; permits courts to order the relief of front pay, a civil
penalty, and the payment of punitive damages ; and requires employers to
publish a notification of rights under section 740 of the Labor Law.
Section 2 of this bill requires health care employers to publish a
notification of rights under section 741 of the Labor Law and makes a
technical amendment.
Section 3 of this bill is the effective date.
JUSTIFICATION:
Labor Law Section 740, the state "whistleblower" law protecting private
employees, has long been restrictive. Current law provides that an
employee is only protected if they disclose to a supervisor or public
body an unlawful activity, policy, or practice of the employer that
creates and presents a substantial danger to the public health or safe-
ty, or that which constitutes health care fraud. Thus, an employee
reporting any myriad of illegal activities that do not directly affect
public health or safety, from sexual harassment to tax evasion, may be
at risk for being retaliated against by their employer with no
protection in law.
In addition, courts have held that for private employees, Labor Law 740
requires proof of an actual violation of law in order to sustain a cause
of action. The above restrictions creates a discrepancy with how
private employees are treated in comparison to public employees, since
Civil Service Law 75-b protects disclosure of "improper governmental
actions" - or an action in violation of any federal, state, local law,
rule, or regulation - where there is a reasonable belief of such action.
Such protections for public employees have been in place since 1986.
This bill corrects the above discrepancies by providing employees
protection for "blowing the whistle" on an activity, policy or practice
of the employer that the employee reasonably believes is in violation of
law, rule or regulation or that the employee reasonably believes poses a
substantial and specific danger to the public health or safety.
This bill further protects former employees, as an employer can continue
to retaliate against a whistleblower by harming them in their current or
future employment prospects, such as by attempting to blacklist someone
from the industry.
This bill also makes unlawful retaliation causes of action available to
independent contractors. The importance of this aspect of the bill has
been highlighted by workplace health and safety concerns during the
COVID-19 pandemic as well as the ongoing misclassification of employees
as independent contractors. This bill would ensure that these workers
have the ability to bring an action alleging wrongful retaliation as a
result of their whistleblowing activities. The bill also permits the
recovery of punitive damages if the employer was found to violate the
anti-retaliation law in a "malicious or wanton" manner. This is consist-
ent with existing law, which permits a court to award punitive damages
for only the most egregious types of conduct. However, where such
conduct occurs in the employment setting, there is no reason not to
afford victims with the same relief which is afforded to the victims of
such conduct in non-employment settings.
PRIOR LEGISLATIVE HISTORY:
2020: A.7348-A (Benedetto) - Reported to Rules Committee
2019: A.7348 (Benedetto) - Referred to Labor Committee
2018: A.5757 (Benedetto) - Passed Assembly
2017: A.5757 (Benedetto) - Passed Assembly
2016: A.5754-A (Benedetto) - Advanced to Third Reading
2015: A.5754 (Benedetto) - Advanced to Third Reading
2014: A.5696-A (Benedetto) - Passed Assembly
2013: A.5696-A (Benedetto) - Passed Assembly
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, amendment and/or repeal of any rule or regulation necessary for
the implementation of this act on its effective date are authorized to
be made by the commissioner of labor of the state of New York on or
before such effective date.
STATE OF NEW YORK
________________________________________________________________________
5144--A
2021-2022 Regular Sessions
IN ASSEMBLY
February 11, 2021
___________
Introduced by M. of A. BENEDETTO, ABINANTI, AUBRY, JACKSON, STECK,
FORREST -- read once and referred to the Committee on Labor -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee
AN ACT to amend the labor law, in relation to retaliatory actions by
employers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 740 of the labor law, as added by chapter 660 of
2 the laws of 1984, paragraph (g) of subdivision 1 as added and paragraph
3 (a) of subdivision 2 as amended by chapter 442 of the laws of 2006,
4 paragraph (d) of subdivision 4 as added by chapter 24 of the laws of
5 2002, and subdivision 7 as amended by chapter 684 of the laws of 2019,
6 is amended to read as follows:
7 § 740. Retaliatory [personnel] action by employers; prohibition. 1.
8 Definitions. For purposes of this section, unless the context specif-
9 ically indicates otherwise:
10 (a) "Employee" means an individual who performs services for and under
11 the control and direction of an employer for wages or other
12 remuneration, including former employees, or natural persons employed as
13 independent contractors to carry out work in furtherance of an employ-
14 er's business enterprise who are not themselves employers.
15 (b) "Employer" means any person, firm, partnership, institution,
16 corporation, or association that employs one or more employees.
17 (c) "Law, rule or regulation" includes: (i) any duly enacted federal,
18 state or local statute or ordinance or executive order; (ii) any rule or
19 regulation promulgated pursuant to [any federal, state or local] such
20 statute or ordinance or executive order; or (iii) any judicial or admin-
21 istrative decision, ruling or order.
22 (d) "Public body" includes the following:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02665-05-1
A. 5144--A 2
1 (i) the United States Congress, any state legislature, or any [popu-
2 larly-elected] elected local governmental body, or any member or employ-
3 ee thereof;
4 (ii) any federal, state, or local [judiciary] court, or any member or
5 employee thereof, or any grand or petit jury;
6 (iii) any federal, state, or local regulatory, administrative, or
7 public agency or authority, or instrumentality thereof; [or]
8 (iv) any federal, state, or local law enforcement agency, prosecutori-
9 al office, or police or peace officer[.];
10 (v) any federal, state or local department of an executive branch of
11 government; or
12 (vi) any division, board, bureau, office, committee, or commission of
13 any of the public bodies described in subparagraphs (i) through (v) of
14 this paragraph.
15 (e) "Retaliatory [personnel] action" means [the discharge, suspension
16 or demotion of an employee, or other adverse employment action taken
17 against an employee in the terms and conditions of employment] an
18 adverse action taken by an employer or his or her agent to discharge,
19 threaten, penalize, or in any other manner discriminate against any
20 employee or former employee exercising his or her rights under this
21 section, including (i) adverse employment actions or threats to take
22 such adverse employment actions against an employee in the terms of
23 conditions of employment including but not limited to discharge, suspen-
24 sion, or demotion; (ii) actions or threats to take such actions that
25 would adversely impact a former employee's current or future employment;
26 or (iii) threatening to contact or contacting United States immigration
27 authorities or otherwise reporting or threatening to report an employ-
28 ee's suspected citizenship or immigration status or the suspected citi-
29 zenship or immigration status of an employee's family or household
30 member, as defined in subdivision two of section four hundred fifty-
31 nine-a of the social services law, to a federal, state, or local agency.
32 (f) "Supervisor" means any individual within an employer's organiza-
33 tion who has the authority to direct and control the work performance of
34 the affected employee; or who has managerial authority to take correc-
35 tive action regarding the violation of the law, rule or regulation of
36 which the employee complains.
37 [(g) "Health care fraud" means health care fraud as defined by article
38 one hundred seventy-seven of the penal law.]
39 2. Prohibitions. An employer shall not take any retaliatory [person-
40 nel] action against an employee, whether or not within the scope of the
41 employee's job duties, because such employee does any of the following:
42 (a) discloses, or threatens to disclose to a supervisor or to a public
43 body an activity, policy or practice of the employer that the employee
44 reasonably believes is in violation of law, rule or regulation [which
45 violation creates and presents] or that the employee reasonably believes
46 poses a substantial and specific danger to the public health or safety[,
47 or which constitutes health care fraud];
48 (b) provides information to, or testifies before, any public body
49 conducting an investigation, hearing or inquiry into any such [violation
50 of a law, rule or regulation] activity, policy or practice by such
51 employer; or
52 (c) objects to, or refuses to participate in any such activity, policy
53 or practice [in violation of a law, rule or regulation].
54 3. Application. The protection against retaliatory [personnel] action
55 provided by paragraph (a) of subdivision two of this section pertaining
56 to disclosure to a public body shall not apply to an employee who makes
A. 5144--A 3
1 such disclosure to a public body unless the employee has [brought] made
2 a good faith effort to notify his or her employer by bringing the activ-
3 ity, policy or practice [in violation of law, rule or regulation] to the
4 attention of a supervisor of the employer and has afforded such employer
5 a reasonable opportunity to correct such activity, policy or practice.
6 Such employer notification shall not be required where: (a) there is an
7 imminent and serious danger to the public health or safety; (b) the
8 employee reasonably believes that reporting to the supervisor would
9 result in a destruction of evidence or other concealment of the activ-
10 ity, policy or practice; (c) such activity, policy or practice could
11 reasonably be expected to lead to endangering the welfare of a minor;
12 (d) the employee reasonably believes that reporting to the supervisor
13 would result in physical harm to the employee or any other person; or
14 (e) the employee reasonably believes that the supervisor is already
15 aware of the activity, policy or practice and will not correct such
16 activity, policy or practice.
17 4. Violation; remedy. (a) An employee who has been the subject of a
18 retaliatory [personnel] action in violation of this section may insti-
19 tute a civil action in a court of competent jurisdiction for relief as
20 set forth in subdivision five of this section within [one year] two
21 years after the alleged retaliatory [personnel] action was taken.
22 (b) Any action authorized by this section may be brought in the county
23 in which the alleged retaliatory [personnel] action occurred, in the
24 county in which the complainant resides, or in the county in which the
25 employer has its principal place of business. In any such action, the
26 parties shall be entitled to a jury trial.
27 (c) It shall be a defense to any action brought pursuant to this
28 section that the [personnel] retaliatory action was predicated upon
29 grounds other than the employee's exercise of any rights protected by
30 this section. [It shall also be a defense that the individual was an
31 independent contractor.]
32 [(d) Notwithstanding the provisions of paragraphs (a) and (c) of this
33 subdivision, a health care employee who has been the subject of a retal-
34 iatory action by a health care employer in violation of section seven
35 hundred forty-one of this article may institute a civil action in a
36 court of competent jurisdiction for relief as set forth in subdivision
37 five of this section within two years after the alleged retaliatory
38 personnel action was taken. In addition to the relief set forth in that
39 subdivision, the court, in its discretion, based upon a finding that the
40 employer acted in bad faith in the retaliatory action, may assess the
41 employer a civil penalty of an amount not to exceed ten thousand
42 dollars, to be paid to the improving quality of patient care fund,
43 established pursuant to section ninety-seven-aaaa of the state finance
44 law.]
45 5. Relief. In any action brought pursuant to subdivision four of this
46 section, the court may order relief as follows:
47 (a) an injunction to restrain continued violation of this section;
48 (b) the reinstatement of the employee to the same position held before
49 the retaliatory [personnel] action, or to an equivalent position, or
50 front pay in lieu thereof;
51 (c) the reinstatement of full fringe benefits and seniority rights;
52 (d) the compensation for lost wages, benefits and other remuneration;
53 [and]
54 (e) the payment by the employer of reasonable costs, disbursements,
55 and attorney's fees;
A. 5144--A 4
1 (f) a civil penalty of an amount not to exceed ten thousand dollars;
2 and/or
3 (g) the payment by the employer of punitive damages, if the violation
4 was willful, malicious or wanton.
5 6. Employer relief. A court, in its discretion, may also order that
6 reasonable attorneys' fees and court costs and disbursements be awarded
7 to an employer if the court determines that an action brought by an
8 employee under this section was without basis in law or in fact.
9 7. Existing rights. Nothing in this section shall be deemed to dimin-
10 ish the rights, privileges, or remedies of any employee under any other
11 law or regulation or under any collective bargaining agreement or
12 employment contract.
13 8. Publication. Every employer shall inform employees of their
14 protections, rights and obligations under this section, by posting a
15 notice thereof. Such notices shall be posted conspicuously in easily
16 accessible and well-lighted places customarily frequented by employees
17 and applicants for employment.
18 § 2. Subdivision 4 of section 741 of the labor law, as added by chap-
19 ter 24 of the laws of 2002, is amended and a new subdivision 6 is added
20 to read as follows:
21 4. Enforcement. A health care employee may seek enforcement of this
22 section pursuant to [paragraph (d) of subdivision] subdivisions four and
23 five of section seven hundred forty of this article.
24 6. Publication. Every employer shall inform employees of their
25 protections, rights and obligations under this section by posting a
26 notice thereof. Such notices shall be posted conspicuously in easily
27 accessible and well-lighted places customarily frequented by employees
28 and applicants for employment.
29 § 3. This act shall take effect on the ninetieth day after it shall
30 have become a law; provided, however, that effective immediately, the
31 addition, amendment and/or repeal of any rule or regulation necessary
32 for the implementation of this act on its effective date are authorized
33 to be made by the commissioner of labor of the state of New York on or
34 before such effective date.
