Enacts provisions providing protection to employees from retaliatory actions by employers where such employees report illegal business activities

Specifying that an employee will be protected against retaliatory action for disclosure of employer activity that the employee reasonably believes has occurred and reasonably believes constitutes illegal business activity;

Adding a "good faith" requirement relating to the effort of the employee to bring the illegal activity to the attention of the employer in order to be protected and creating certain exceptions when such good faith prior notice to employer is not necessary;

Providing additional remedies for whistleblowers who suffer impermissible retaliatory personnel actions and restricting situations when employer is entitled, in court's discretion to attorneys fees when successful; and

Requiring employers to inform their employees of their rights under this section.

Section 2 of bill amends Civil Service Law 75-b (2) by:

Adding protections, to create parity for whistleblowers protections for public employees as for private employees under Labor Law 740; and

Limiting prior notification to employer requirements.

Section 3 of the bill amends Civil Service Law 75-b (3) to include under retaliatory action the elimination of a job title that uniquely singles out such employee and provides a right of action under Labor Law 740 to all public employees.

Section 4 of the bill adds a new subdivision 5 to Civil Service Law 75-b requiring employers to inform their employees of their rights under this section.

Effects of present law which this bill 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 specific 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 reasonably 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

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, which was enacted in 1984. Unfortunately, there are several significant flaws in the whistleblower current statutes which greatly limit the protections provided to employees, and thereby deter honest employees from revealing illegal activities of their employers, out of the legitimate fear that they can be dismissed 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 government authorities, the whistleblower law will provide no protection to the employee. Second, a private employee who reasonably believes that his or her employer has engaged in actions which the employee reasonably believes constitute a violation of law can be terminated for revealing that information to government authorities, if it turns out that no violation can be proved. 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.

The whistleblower statutes are also significantly flawed 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 Civil Service Law § 740, means that private employees can be fired for reporting violations, unreported to the employer, even where such present an imminent and serious threat.

Although Labor Law § 740 prohibits adverse employment actions against private employees who refuse to participate in illegal business activities, Civil Service Law § 75b 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.

This bill addresses these numerous defects in the current whistle blower statues. 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 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 20 years has shown that the law is simply inadequate. By making the necessary 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 (A3487); 200-04 legislative session (A8794), and a similar bill was submitted during the 2001-002 legislative session.

Fiscal implications

This bill will have a positive fiscal impact by reducing fraud and misuse of public funds by government agencies and contractors.

Effective date

This act shall take effect on the ninetieth day after it shall have become a law.