New York Introduces Bills to Expand Whistleblower Protections
Under current law, whistleblowers who reported fraudulent activity in the government or other settings in the State of New York are typically barred from bringing other legal actions. Maybe not anymore. Last week, both the New York State Senate and Assembly signed off on a series of amendments aimed at providing greater protection for employees who notice and report illegal activity, and expanding the definition of a “whistleblower” under the law.
Under the old New York Labor Law Section 740, enacted in 1984, employees who reported conduct that either “create[d] and presents a substantial and specific danger to the public health or safety, or…constitute[d] health care fraud” waived their rights to other legal clams, such as filing a breach of employment contract case against an employer. As two Constantine Cannon attorneys recently highlighted, whistleblowers often face retaliation for exposing healthcare fraud and “many whistleblowers are often fired, sidelined, or blackballed from the healthcare industry for their activities.”
As Senator James Skoufis, a supporter of the bill, explained: “As chairman of the Senate’s investigations committee, I see first-hand the need for whistleblower tips when it comes to improving and opening up government. Current law discourages whistleblower claims through a contradictory provision that prevents them from asserting any other claims. This inherently diminishes their rights in comparison to other citizens and is a fundamental flaw in state law that my legislation seeks to correct.”
In addition to removing the provision waiving whistleblowers’ legal rights, the amendments extend the definition of “illegal business activity” beyond fraud that constitutes healthcare fraud or a threat to public safety to “any practice, procedure, action or failure to act by an employer taken in the course of the employer’s business, whether or not within the scope of employment, that is in violation of any law, rule or regulation punishable by imprisonment or civil or criminal penalty.” They also lessen the burden for employees to prove that their whistleblowing was the cause of any retaliation they may have faced.
New York is one of the many states that in recent years have shifted their attention to the risks incurred by whistleblowers in reporting fraud.
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