On October 28, 2021, New York State Governor Kathy Hochul signed Senate Bill S4394A (the “NY Amendments”) into law amending New York Labor Law Section 740: Retaliatory Personnel Action by Employers; Prohibition (the “Labor Law”) N.Y.L.L. 740, dramatically expanding the legal protections afforded to whistleblowing employees. The NY Amendments are set to take effect on January 26, 2022 and will make New York the latest state to follow New Jersey’s historic lead in enacting the most pro-employee whistleblower statutes in the United States.

In 1986, the New Jersey State Legislature enacted the Conscientious Employee Protection Act (“CEPA”) N.J.S.A. 34:19(1)-(8), considered at the time to be “the most far reaching ‘whistleblower statute’ in the nation.” Mehlman v. Mobil Oil Corp., 153 N.J. 163, 179 (1998) (citing John H. Dorsey, Protecting Whistleblowers, N.Y. TIMES, Nov. 2, 1986, at 34). Specifically, “[T]he essential purpose behind CEPA” is to protect ‘whistleblowing’” activities that “benefit the health, safety, and welfare of the public,” by encouraging employees to report, or object to their employers’ unlawful misconduct. Feldman v. Hunterdon Radiological Assocs., 187 N.J. 228, 239 (2006). Additionally, CEPA protects all employees working in either the public or private sector, as well as independent contractors. D’Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110, 114 (2007).

The New Jersey State Legislature broadly intended for CEPA to effectuate preventative measures to deter companies from taking “retaliatory action” against employees who engage in conduct constituting “whistleblowing activity” as defined by the statutory language. Higgins v. Pascack Valley Hosp., 158 N.J. 404, 420 (1999). CEPA defines protected “whistleblowing activity” to occur when an employee:

“discloses or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer, or another employer, with whom there is a business relationship, that the employee reasonably believes is… (1) in violation of a law, or a rule or regulation promulgated pursuant to law; (2) is fraudulent or criminal; or (3) is incompatible with a clear mandate of public policy concerning public health, safety, welfare, or protection of the environment”

N.J.S.A. 34:19-3(c)(1)-(3). (Emphasis added)

In Young v. Schering Corp., the New Jersey Supreme Court looked at the legislative history of CEPA and concluded CEPA was remedial legislation and should be construed liberally.141 N.J. 16, 25 (1995) Furthermore, the structure of the remedial provisions of CEPA are consistent with individual liability as the Legislature assured “all remedies available in common law tort actions shall be available to prevailing plaintiffs.” Palladino ex rel. United States v. VNA of S. N.J., Inc., 68 F. Supp. 2d 455, 474 (D.N.J. 1999). This means New Jersey employees who are subjected to an adverse employment action (e.g., termination, suspension, demotion, transfer, hostile work environment, etc.) in retaliation to disclosing or objecting to conduct by their employer they reasonably believe to be unlawful can recover compensatory damages, punitive damages, and attorney fees. N.J.S.A. 34:19-5

By contrast New York’s whistleblowing law, prior to the recent NY Amendments, limited the scope of protection available to whistleblowing employees under the Labor Law as the statue only protected current employees from, “Retaliatory personnel actions for disclosing or threatening to disclose an actual violation of law, rule or regulation which posed a substantial and specific danger to the publics health or safety.”  N.Y.L.L. 740(2) (emphasis added)

The Labor Law’s actual violation standard shielded New York employers from potential liability relative to New Jersey employers who could be held liable under CEPA’s reasonable belief standard. However, the NY Amendments most significant change to the Labor Law replaced the “actual violation of a law, rule or regulation” standard with a “reasonable belief” standard. Now, employers in New York, like New Jersey, maybe held liable without having actually violated the law. Thus, the Labor Law, like CEPA, refocuses the statutory inquiry to whether an employer subjected an employee to unlawful retaliation rather than inquiring as to whether an employer in fact actually violated the law.

Beyond expanding the scope of the protected activity entitling employees to anti-retaliation protection, the NY Amendments also change the Labor Law by:

  • Broadening the categories of workers protected against retaliation.
  • Expanding the definition of the prohibited retaliatory action.
  • Requiring employers to notify their employees of the whistleblower protections.
  • Allowing courts to order additional remedies.
  • Entitling plaintiffs to a jury trial.

Additionally, the Amendments lengthened the statute of limitations for bringing a whistleblowing claim in New York to two years. In contrast, New Jersey’s CEPA has only a one-year statute of limitation.

Do not hesitate to call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page for immediate help if your employer retaliates against you for disclosing, reporting, or refusing to engage in activity you reasonably believe is unlawful, fraudulent, or contrary to public policy. Do not delay as the statute of limitations to bring a whistleblower claim in New Jersey is only one year from the date an employee suffered retaliation from their employer. At Mashel Law, located in Marlboro, New Jersey, we are dedicated to protecting the rights of employees.

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