What's happening
This bill expands protections for employees against employer retaliation when they report certain legal or ethical violations, including public officer and penal law violations.
Why it matters
Broader Protections for Whistleblowers. The bill expands the scope of employee protections, making it illegal for employers to retaliate not only when employees report threats to public health or safety, but also when they report violations of specific public officer and penal laws—potentially covering a wider range of misconduct.
Covers More Types of Reports. Employees are protected from retaliation whether they disclose violations internally (to a supervisor), to a public body, or even to the public at large. This lowers the barrier for reporting and could empower more workers to speak out against wrongdoing.
Explicit Coverage of Ethical and Criminal Violations. By referencing sections of the public officers law (relating to ethics, conflicts of interest, and official misconduct) and specific penal law offenses (like falsifying business records or official misconduct), the bill directly addresses both ethical lapses and criminal acts in the workplace.
Potential to Encourage a Culture of Accountability. With these expanded protections, employees may feel safer coming forward about misconduct, increasing the likelihood that corruption, fraud, or unethical behavior is identified and addressed—ultimately fostering greater transparency and integrity in organizations.
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Who cares
Headline styles
Protect Whistleblowers From Retaliation
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to labor
- Referred to labor
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Protect Whistleblowers on Bribery
In Assembly Committee · Labor · Sponsor Thomas Abinanti
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3862
2017-2018 Regular Sessions
IN SENATE
January 27, 2017
Introduced by Sen. SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to retaliatory action by employers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 2 of section 740 of the labor law, as added by chapter 660 of the laws of 1984, paragraph (a) as amended by chapter 442 of the laws of 2006, is amended to read as follows:
2. Prohibitions. An employer shall not take any retaliatory personnel action against an employee because such employee does any of the following:
(a) (i) discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that is in violation of law, rule or regulation which violation creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud; or
[(b)] (ii) provides information to, or testifies before, any public body conducting an investigation, hearing or inquiry into any such violation of a law, rule or regulation by such employer; or
[(c)] (iii) objects to, or refuses to participate in any such activity, policy or practice in violation of a law, rule or regulation[.]; or
(b) protests or discloses, whether to a supervisor, a public entity, or to the public in general, any action that constitutes a violation of section seventy-three, seventy-three-A, seventy-four, seventy-five, or seventy-six of the public officers law or section 175.20, 175.25, 175.40, 195.20 or article two hundred of the penal law.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03380-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to retaliatory action by employers
Purpose or general idea of bill
To prohibit employer retaliation against employees in the financial services industry who report violations of laws, rules or regulations to a supervisor or to a public body.
Summary of specific provisions
Section 1 amends section 740(1) of the labor law by adding a new para- graph (h) to define "Financial institution" to mean:
Read the full memo (802 words)
(1) an insured bank; (2) a commercial bank or trust company; (3) a private banker; (A) an agency or branch of a foreign bank in the United States; (5) any credit union; a thrift institution; (6) a broker or dealer registered with the Securities and Exchange Commission; (7) a broker or dealer in securities or commodities; (8) an investment banker or investment company; (9) a currency exchange; (10) an issuer, redeemer, or cashier of traveler's checks, checks, money orders, or similar instrument's; (11) an operator of a credit card system; (12) an insurance company; (13) a dealer in precious metals, stones, or jewels; (14) a pawnbroker; (15) a loan or finance company; (16) a travel agency; (17) a licensed sender of money or any other person who engages as a business in the transmission of funds; (19) a telegraph company; (19) a business engaged in vehicle sales; (20) persons involved in real estate closings and settlements; (21) the Unites States Postal Service; (22) an agency of the United States government or of a state or local government carrying out a duty or Power of a business described in this paragraph; (23) an Indian casino, or other gaming operation; (24)any business or agency which engages in any activity which the super intendent of the department of financial services determines to be an activity which is similar to, related to, or a substitute for any activity in which any business described in this paragraph is authorized to engage; (25) or any other business designated by the superintendent whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters.
Section 2 amends section 740(2)(a) of the labor law, as amended by chapter 442 of the laws of 2006, to prohibit an employer from taking any retaliatory personnel action against an employee who discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that is in violation of law, rule or regulation which constitutes a violation of the federal or state securities laws, financial or accounting fraud, or misappropriation or misuse of funds of a financial institution, a hedge fund or private equity firm, or of the clients or customers of such organizations.
Section 3 is the effective date.
Justification
In the wake of the financial crisis caused by fraudulent financial schemes, it is in the interest of the state to encourage employees of financial institutions to report illegal and unethical behavior to a supervisor or to a public body. Current law only protects employees who report illegal behavior that creates and presents a substantial and specific danger to the public health or safety. This law will protect employees who report or threaten to report illegal behavior in financial institutions and actions that constitute bribery of a public official.
The need for this legislation is highlighted by the May 2012 New York Court of Appeals decision in Sullivan v Harnisch. The majority of the Court rejected a wrongful discharge case brought by a compliance officer claiming that he was terminated for questioning the personal stock trades of the company's president and ruled that current law did not prohibit such discharge. In his dissenting opinion, the Court's Chief Judge said that the majority's decision created, "A great Potential for abuse in the financial services industry," which would need to be solved by legislation.
This law addresses that need by protecting employees in the financial services industry who report illegal behavior from retaliation, including retaliatory termination. Without the efforts of employees willing to report and prevent illegal and unethical behavior, such behavior can continue until discovered and acted upon by a third party outside the company. According to a United States Senate report, whistleblower tips identified 54.1% of uncovered fraud schemes in public companies, while external auditors, including the Security and Exchange Commission, detected only 4.1% of uncovered fraud schemes. As further stated in the Chief Judge's dissenting opinion, "These protections must exist not only to decrease the likelihood that the employees will succumb to pressures to ignore or violate their obligations for fear of termination, but also to protect the public."
Legislative history
2013-14 Session - new bill S.4453 - was reported from Labor Committee.
Fiscal implications
None.
Effective date
The act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.