Businesses need to be aware of whistleblower-law changes

SYRACUSE, N.Y. — New York amended its whistleblower law earlier this year, but many businesses remain unaware of the changes and how it may impact their company, one area labor attorney says.

Among the biggest changes in the law, which went into effect Jan. 26, is the broadening of who can blow the whistle on an employer, says Michael Sciotti, a partner with Barclay Damon LLP in Syracuse. His practice includes defending employers, owners, and members of management in all types of discrimination, harassment, whistleblower, and retaliation claims brought under state and federal labor laws, according to his bio on the Barclay Damon website.

While the state whistleblower law once only covered current employees, the changes now include former employees and independent contractors among those protected.

“Employers need to be on the lookout for that,” Sciotti says. Employers impacted by the whistleblower law include any entity that has one or more employees. “So, this law pretty much applies to anyone who has an employee,” he adds.

Unfortunately, not enough businesses are aware of the changes to the law, and he’s doing his best to raise awareness through webinars, speaking engagements, and sharing information on his LinkedIn profile.

New York is a significantly pro-employee state, he says, and the law not only provides protection to employees that report employer wrongdoing, but also offers remedies including potential punitive damages.

The law does require that employees make a good-faith effort to tell supervisors of the wrongdoing and give the employer time to fix the issue before reporting it, Sciotti says, but there are five exceptions to that requirement. “Those exceptions are a little broader now,” he adds.

The exceptions include: 

• When there is an imminent and serious danger to public health or safety;

• When the whistleblower believes that reporting to the supervisor/employer would result in the destruction of evidence or other concealment of the wrongdoing;

• When the wrongdoing could reasonably be expected to lead to the endangering of the welfare of a minor;

• When the employee believes reporting to the supervisor would result in physical harm to the employee or another; and

• When the employee reasonably believes that the supervisor or employer is already aware of the wrongdoing and won’t correct it.

Other provisions in the law allow employees to bring a lawsuit within two years if they were terminated in retaliation. If they were fired, winning a suit could allow them to be reinstated to the same position. They could also receive back pay. In addition, an employer could face civil penalties of up to $10,000 plus punitive damages. Those last items are typically not covered by business insurance, Sciotti notes. On the flip side, employers can potentially recoup attorney fees if they win in court, he adds. 

Employers can do some things to protect themselves, he says. 

“The other side of it is implementing good policies and good practices.” It’s important for employers to know the ins and outs of the law, Sciotti says. Training for supervisors is important so they don’t inadvertently violate the law.

Employers should also make sure all terminations are legal and sensible, Sciotti says. There should be a history of evidence to support the termination, such as written warnings and performance appraisals. This can help prevent employers from facing potential lawsuits from former employees saying, for example, they complained about something and were fired.

“Employees are allowed to complain. Employees are allowed to object to certain things,” Sciotti says. But those things don’t include complaining about having to be on time or other reasonable employer expectations, he says.

While its optional for employers to update their employee handbooks with the law changes this year, Sciotti says employers might want to consider it. The handbook is an option for employers to outline for workers the steps they should take if they see something they believe is reportable. Employers can indicate who such reports should be made to and in what format — email, verbal, or something else.

One thing that isn’t optional is the posting requirement for employers regarding the whistleblower law. 

“There is a three-page employer poster that the Department of Labor has published,” Sciotti says. Employers may have an outdated poster up that they need to replace, or maybe they weren’t aware there was anything they had to post in the first place.

Sciotti feels that the changes to the whistleblower law fell through the cracks for many employers. “We had a lot of changes going on this year, and this was just one of them,” he says.

He suggests businesses consider joining a membership organization like the Business Council of New York State, Inc., or the Society for Human Resource Management, as well as take advantage of training and education opportunities provided by organizations like their local chamber of commerce, to help them stay on top of things. Businesses can also sign up for free alerts from state agencies such as the Department of Labor to notify them of significant changes.