New York Labor Law Section 740: Amendments Expand Whistleblower Protections - JD Supra

On October 28, 2021, Governor Hochul signed Senate Bill S4394A, which significantly amended Section 740 of the

New York Labor Law. The legislation expanded whistleblower protections under Section 740 for employees, former

employees, and independent contractors. These groups now have greater protection against retaliation from

employers if they disclose or threaten to disclose to a supervisor or 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

protected from retaliation if they provide information to or testify before a public body conducting an investigation,

participate in any such activity, policy or practice. The amended law recently went into effect on January 26, 2022.

Employers should be aware that the amended law requires employers to post a notice regarding employees’

protections, rights and obligations under Section 740; employers should post this notice immediately.

Previously, the statute only applied when an employee disclosed or threatened to disclose to their supervisor or a

employer’s activity, policy or practice is in violation of law. Moreover, the requirement that the violation in

question presents a “substantial and specific” danger has been removed. The law now also covers employees

Employers should note that the legislation increased the one-year statute of limitations applicable to whistleblower

claims to two years; instated a right to a jury trial for such claims; and expanded the available monetary relief

beyond lost wages and benefits and attorneys’ fees and costs to include front pay, a civil penalty of up to $10,000,

and punitive damages (in the case of willful violations). As with the prior law, an employee pursuing such a claim

The legislature further expanded the scope of the law by amending several definitions:

• The definition of “employee” now includes former employees and independent contractors, increasing the

• The definition of “law, rule or regulation” now includes federal, state, or local statutes, ordinances,

government; and any division, board, bureau, office, committee, or commission of any of the defined public

• The definition of “retaliatory action,” has been changed from “the discharge, suspension, or demotion of an

employee, or other adverse employment action,” to also include, for example, threatening to take an

The change to the definition of “employee” is particularly significant because the prior version of the law allowed

faith effort” to notify their employer of any violations so that the employer can correct the alleged violation. No

to the notification requirement. Employees do not have to notify their employer of the alleged violation before

2) the employee reasonably believes that reporting to the supervisor would result in a destruction of evidence

4) the employee reasonably believes that reporting to the supervisor would result in physical harm to the

Lastly, as mentioned at the outset of this alert, the statute now requires employers to post a notice alerting

employees of their protections, rights and obligations, which must be posted “conspicuously in easily accessible and

well-lighted places customarily frequented by employees and applicants for employment.” A link to the requisite notice

Employers should be aware that this is the third and most substantial change to the law since it was enacted in

1984. The 2002 amendment added “health care fraud” as a reporting activity, and the 2019 amendment removed

language providing that the institution of an action under the statute was deemed a waiver of other rights and

Employers should be mindful that the expanded scope of individuals and activities covered under Section 740, as

well as the changes to the definition of “retaliation” is likely to result in an increased number of claims against

Employers must comply with the law by posting the required notice. Additionally, employers are encouraged to

alert and train supervisors about the changes to the law. Employers should confirm that all internal policies and

This alert is for general informational purposes only and should not be construed as specific legal advice. If you would

like more information about this alert, please contact one of the following attorneys or call your regular Patterson

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source: https://www.jdsupra.com/legalnews/new-york-labor-law-section-740-4215643/

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