General Counsel's Corner: Expanded NYS Whistleblower Law Effective January 26, 2022 - Q and As for Higher Education

December 16, 2021

By: Jane M. Sovern

Private colleges and universities, take note. A significant expansion of New York State’s Whistleblower Law (NYS Labor Law Section 740) takes effect on Jan. 26, 2022. This change will affect all private employers throughout the state, including private institutions of higher education (IHEs). The changes provide that current and former employees and independent contractors are protected for complaints about employer actions that they “reasonably believe” violate any law. There will no longer be a requirement of proof of an actual violation of law, or that the law be related to health care fraud or public safety. Given the breadth of activity of most IHEs, and the many federal, state and local legal requirements that govern the higher education sector, these changes provide a significant new avenue for faculty, staff members, independent contractors and possibly even students, who are also employees, to bring a legal challenge to employment and other action that they view as retaliatory. They also open the door for employees to bring claims of what they reasonably believe to be an employer’s non-compliance without having to first bring the matter to the employer’s attention in order to allow the employer to provide an explanation or cure a deficiency.

Who Can Bring a Claim Under the Expanded Law?

The amendments will allow current employees, as well as former employees and individual independent contractors, to bring claims. Although not specified in the law, students who are also employees of IHEs (possibly including teaching assistants, resident advisors, research assistants, campus tour guides and others) may be able to file whistleblower claims as well.

How Will the Scope of Potential Claims Change? 

The scope of potential claims will be significantly broadened by these amendments. Currently, claims are limited to activities that violate the law and pose a substantial and specific danger to public health or safety; or that constitute health care fraud. The amendments provide that claims include activities that the employee reasonably believes are violations of the law or pose a substantial and specific danger to public health or safety. This broad scope means that (1) there need not be an actual violation of the law, just a “reasonable belief” that one exists; and (2) complaints could include retaliation for allegations of a violation of any law or executive order, including violations of non-discrimination laws. Additionally, a danger to health or safety need not be because of a legal violation.

What Will Constitute “Retaliatory Actions”? 

“Retaliatory actions” are also expanded, from “personnel actions,” to actual or threatened adverse employment actions, actual or threatened actions that would adversely impact an employee’s or former employee’s current or future employment, and contacting or threatening to contact immigration or other authorities to report the actual or suspected immigration status of an employee or employee’s family or household member. Examples include employer threats to reassign an employee to a less desirable shift or location, threats to withhold a reference or say negative things about a former employee.

What Defenses Does My Institution Have to a Claim? 

The most important employer defense to these claims that has been used in the past: that the employee did not make the required disclosure to the employer of the allegedly unlawful or dangerous activities to allow the employer to correct the issue (or that the employee did disclose, and the employer did correct it), has been hollowed out. The amendments provide that the employee will not have an obligation to disclose and allow the employer to address the issue when (1) there is an imminent and serious danger to public health and safety; (2) the employee reasonably believes that the result of disclosure would be destruction of evidence or concealment of activity; (3) there is a reasonable expectation of activity that could lead to endangering the welfare of a minor; (4) the employee reasonably believes disclosing would result in physical harm to the employee or another person; or (5) the employee reasonably believes a supervisor is already aware and will not correct the problem.

What Are the Other Changes to the Current Law?

The revised law will also be procedurally more favorable to plaintiffs. The time limit to bring claims will be extended from one year to two years and plaintiffs will now be entitled to a jury trial. In addition to remedies including injunctive relief, reinstatement to the same or equivalent position, reinstatement of full fringe benefits and seniority rights, back pay and other compensatory damages, and attorney’s fees and costs, a plaintiff may also be awarded front pay in lieu of reinstatement, a civil penalty of up to $10,000, and/or punitive damages for a “willful, malicious or wanton” violation.

Employers will also need to conspicuously post notice of employees’ rights in easily accessible and well-lighted places frequented by current employees and applicants. 

Why is the Law Being Changed Now?

The legislation appears to have been crafted with at least two issues in mind: workplace safety during COVID, and protecting undocumented immigrants. The addition of violations of Executive Orders to the law strongly suggests that the Legislature was sensitive to complaints from workers, unions and advocates that during COVID, individuals feared or experienced retaliation for speaking up about unsafe working conditions, especially in the beginning of the pandemic. The inclusion of threatening to report actual or perceived immigration status may have stemmed from coverage of reported threats by employers to report employees who complained (or their family members or roommates) to immigration authorities.

What Can My Institution Expect Under the Expanded Law?

A number of other states, including New Jersey, have adopted similar or even more expansive whistleblower laws (New Jersey’s law applies to public as well as private employers). Whistleblower cases have increased since those changes in New Jersey, and employers there have found that the breadth of the law has made it challenging to defeat these cases at summary judgment or earlier. Additionally, there is concern that, because of the broad drafting of the amendments, employees may bring legal action under multiple theories (whistleblower law, non-discrimination laws, false claims acts), making employee litigation more complex and costly. As examples, employees of New Jersey IHEs have recently brought claims of retaliatory action for: making a sexual harassment complaint; reporting that a supervisor and a fellow employee spent two work days writing the employee’s application to graduate school; and alerting supervisors that state funds for a program were used to pay ineligible employees. 

What Can My Institution Do to Prepare?
1. First priorities:

1. Check your Whistleblower Policy and consult with counsel to make sure it complies with the new law including clear information on where and how to report. Check that reports are being handled promptly and appropriately, including those made to any anonymous hotlines.
2. Post notices (Bond will do an update if the NYSDOL provides standard notices, or we can assist you in creating them).
3. Check that your HERO Act airborne infectious disease plan is up-to-date and being properly implemented, with clear information on where to report, and correct any out-of-date or missing information promptly. 

2. Next priorities: 

1. Train supervisors/managers on the new whistleblower law, including the importance of non-retaliation provisions under all your policies, and where to bring and how to handle complaints. 
2. Ensure that you have in-house and external resources trained and ready to promptly investigate and resolve complaints received under all of your policies.

General Counsel’s Corner is a publication presented by one of Bond’s former general counsels and academic administrators of higher education institutions: Monica Barrett (Rutgers); Sandra Casey (SUNY and Siena College); Shelley Sanders Kehl (Pratt Institute); Barbara Lee (SVP for Academic Affairs at Rutgers); Sarah Luke (Governors State University); Gail Norris (University of Rochester); and Jane Sovern (CUNY). In each issue, a different attorney from this team will share with you recent legal developments, tips, strategies and useful information to assist you with your daily work on campus.

This post is brought to you by Jane M. Sovern in our Westchester office. Jane served at The City University of New York (CUNY) as Deputy General Counsel and other positions for more than 20 years, including as Interim Vice Chancellor for Legal Affairs in 2017.