NY Court of Appeals Gives Guidance on What Whistleblowers Need to Allege Under New York’s Whistleblower Law to Maintain Claim
On May 13, 2014, in Webb-Weber v. Community Action for Human Services, Inc., the New York Court of Appeals unanimously held that an employee need not identify the specific “law, rule or regulation” allegedly violated by his or her employer in a complaint for whistleblower retaliation under New York Labor Law Section 740 (2) in order to maintain a viable cause of action.
Plaintiff Webb-Weber was the chief operating officer of defendant Community Action for Human Services, Inc. (“Community Action”), a non-profit corporation that provides social services to the mentally and physically disabled. Plaintiff’s amended complaint alleged that she was terminated in 2009 after making complaints to various public agencies about certain policies and practices of her employer. Specifically, plaintiff alleged that she complained to her supervisor and other Community Action representatives regarding issues threatening the health and safety of Community Action patients, including the falsification of patient medication and treatment records, inadequate fire safety, mistreatment of Community Action residents, and deficiencies in care and operations. Plaintiff ultimately alerted various state and city agencies, which resulted in sanctions and violations against Community Action.
New York Labor Law Section 740 (2) provides “An employer shall not take any retaliatory personnel action against an employee because such employee . . . 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” that either “creates and presents a substantial and specific danger to the public health or safety, or . . . constitutes health care fraud.” Because plaintiff did not specify which “law, rule or regulation” Community Action allegedly violated in her complaint, Community Action moved to dismiss plaintiff’s complaint for failure to state a claim. After motion practice at the trial and appellate court level, plaintiff’s Section 740 claim was dismissed for failure to identify a specific law, rule or regulation that defendant allegedly violated. Webb-Weber appealed to the Court of Appeals.
In reversing the Appellate Division and overruling longstanding precedent, the Court of Appeals held that “for pleading purposes, the complaint need not specify the actual law, rule or regulation violated, although it must identify the particular activities, policies or practices in which the employer allegedly engaged, so that the complaint provides the employer with notice of the alleged complained-of conduct.” Additionally, the Court of Appeals noted that despite a plaintiff carrying the ultimate burden to prove that the employer actually violated a law, rule or regulation, such proofs are not necessary at the pleading stage.
This relaxed pleading requirement will likely translate into an increased number of viable whistleblower cases as it has become easier for plaintiffs to withstand a motion to dismiss on a retaliation claim under New York’s whistleblower statute. Nonetheless, in order to recover, plaintiffs must still prove an actual violation by the employer. In this regard, the New York whistleblower statute places a heavier burden on the whistleblower than other whistleblower blower statutes, such as the whistleblower provisions of the Sarbanes Oxley Act or the New Jersey Conscientious Employee Protection Act which only require the whistleblower to prove she had a reasonably objective belief that the employer violated the law.
The Gibbons Employment & Labor Law Department regularly handles the defense of whistleblower claims in both state and federal courts.