New York Law Review

Tag: Labor Law § 740

  • Webb-Weber v. Community Action for Human Services, Inc., 23 N.Y.3d 448 (2014): Pleading Requirements for Whistleblower Claims

    Webb-Weber v. Community Action for Human Services, Inc., 23 N.Y.3d 448 (2014)

    A plaintiff asserting a claim under New York Labor Law § 740 (2) (a), the whistleblower statute, is not required to specifically identify the law, rule, or regulation the employer allegedly violated, but must identify the employer’s activities, policies, or practices that were reported.

    Summary

    Webb-Weber, former COO of Community Action, sued after being terminated, alleging she was fired for reporting the organization’s policies and practices to public agencies. Community Action moved to dismiss, arguing Webb-Weber failed to identify the specific law, rule, or regulation violated. The Court of Appeals held that while a plaintiff must ultimately prove a violation of law to recover under § 740, the initial pleading only requires identifying the employer’s problematic activities, policies, or practices, not the specific legal provision violated.

    Facts

    Plaintiff Webb-Weber was the chief operating officer for Community Action, a non-profit providing social services. She reported to CEO David Bond. Webb-Weber claimed she was terminated after reporting complaints to public agencies about Community Action’s policies and practices, including:

    1. Falsification of patient medication and treatment records.
    2. Inadequate fire safety.
    3. Mistreatment of Community Action residents.
    4. Deficiencies in patient care and in the facility itself.

    She notified the Office for People with Developmental Disabilities (OPWDD) and the New York City Fire Department. OPWDD conducted a survey and issued a “60-Day Order,” and later placed Community Action under sanctions by the New York State Department of Health. The New York City Fire Department issued three violations.

    Procedural History

    • Supreme Court granted plaintiff’s cross-motion to amend the complaint and partially granted the defendant’s motion to dismiss, upholding the Labor Law § 740 claim.
    • The Appellate Division reversed and dismissed the § 740 claim because the complaint did not identify a specific law, rule, or regulation violated.
    • The Court of Appeals granted leave to appeal and reversed the Appellate Division.

    Issue(s)

    Whether a complaint asserting a claim under Labor Law § 740 (2) (a) must identify the specific “law, rule or regulation” allegedly violated by the employer.

    Holding

    No, because the plain language of Labor Law § 740 (2)(a) does not impose such a requirement for pleading purposes.

    Court’s Reasoning

    The Court reasoned that Labor Law § 740 (2) (a) prohibits retaliation against an employee who discloses or threatens to disclose an employer’s “activity, policy or practice.” The Court interpreted this to mean that a plaintiff must show they reported or threatened to report the employer’s “activity, policy or practice,” but need not claim they cited any particular “law, rule or regulation” at that time.

    The court stated, “{m}erely the practice — not the legal basis for finding it to be a violation — appears to be what must be reported.”

    While a plaintiff must ultimately prove an actual violation to recover, the pleading requirements are less stringent. The complaint must identify the activities, policies, or practices so the employer has notice of the alleged conduct. Here, the complaint adequately alleged violations based on the sanctions and violations issued by public bodies due to the plaintiff’s complaints.

    The Court emphasized that on a motion to dismiss, the complaint must be afforded a liberal construction, and the plaintiff’s allegations given every favorable inference, citing Leon v. Martinez, 84 NY2d 83, 87-88 (1994). The court noted that the defendant could request a bill of particulars to identify specific laws, rules and regulations allegedly violated.

  • Bordell v. General Electric Co., 88 N.Y.2d 869 (1996): Requires Actual Violation for Whistleblower Claim

    Bordell v. General Electric Co., 88 N.Y.2d 869 (1996)

    New York Labor Law § 740, the whistleblower statute, requires proof of an actual violation of a law, rule, or regulation that creates a substantial and specific danger to public health or safety to sustain a cause of action for retaliatory discharge.

    Summary

    Bordell, a health physicist at General Electric (GE), reported to his superiors and the Department of Energy (DOE) that GE employees may have been exposed to excessive radiation levels. He was subsequently suspended and fired. Bordell sued, claiming retaliatory discharge under New York Labor Law § 740. The Court of Appeals held that § 740 requires proof of an actual violation of a law, rule, or regulation to sustain a whistleblower claim. Because Bordell conceded that GE was not actually in violation, his claim failed.

    Facts

    Plaintiff Bordell, a health physicist employed by General Electric Company at the Knolls Atomic Power Company, reported to his supervisors that as many as seven employees might have been exposed to radiation levels sufficient to trigger Department of Energy (DOE) mandatory reporting requirements. Dissatisfied with his supervisors’ response, he reported his findings directly to DOE. Three weeks later, Bordell was suspended from his job and terminated eight days after that. Bordell conceded that GE was not actually in violation of any law, rule or regulation regarding radiation exposure levels.

    Procedural History

    Bordell commenced an action claiming he was discharged in retaliation for his report to the DOE, seeking a declaration that GE’s acts violated Labor Law § 740. Supreme Court dismissed the causes of action based on Labor Law § 740. The Appellate Division affirmed. The New York Court of Appeals affirmed the lower courts’ decisions.

    Issue(s)

    Whether a cause of action predicated on Labor Law § 740 requires proof of an actual violation of law, rule, or regulation, or whether a reasonable belief that such a violation occurred is sufficient.

    Holding

    No, because the language and legislative history of Labor Law § 740 necessitate proof of an actual violation to sustain a cause of action.

    Court’s Reasoning

    The Court of Appeals affirmed the lower courts’ decisions, emphasizing the statutory language of Labor Law § 740 (2)(a), which prohibits retaliatory action against an employee who discloses an employer’s activity that “is in violation of law, rule or regulation which violation creates and represents a substantial and specific danger to the public health or safety.” The Court highlighted that the plaintiff conceded GE was not actually in violation of any law, rule, or regulation. The court found the legislative history supported requiring an actual violation. They referenced the amendment to Civil Service Law § 75-b, the public sector whistleblower statute, which explicitly protects employees who disclose information they “reasonably believes to be true and reasonably believes constitutes an improper governmental action.” The absence of a similar amendment to Labor Law § 740 indicated a legislative intent to require proof of an actual violation for private sector whistleblower claims. The court cited the Appellate Division decision, noting that the legislative history of Civil Service Law § 75-b demonstrated an intent to widen protection for public employees by including a “reasonable belief” standard, which was conspicuously absent from Labor Law § 740. Thus, the court concluded that proof of an actual violation is a prerequisite for a Labor Law § 740 claim. The court referenced that the plaintiff had a reasonable belief of a possible violation, but no proof of an actual one, making the Labor Law § 740 claims untenable.

  • Remba v. Federation Employment and Guidance Service, 76 N.Y.2d 801 (1990): New York Whistleblower Law Requires Substantial Public Safety Risk

    Remba v. Federation Employment and Guidance Service, 76 N.Y.2d 801 (1990)

    To trigger the protection of New York’s Whistleblower Law (Labor Law § 740), the reported violation must present a substantial and specific danger to the public health and safety.

    Summary

    Remba, an employee, claimed she was fired for refusing to participate in fraudulent billing practices. She argued this violated the Whistleblower Law. The New York Court of Appeals affirmed the dismissal of her claim, holding that the statute requires the reported violation to create a substantial and specific danger to public health and safety, not merely involve financial impropriety. The court emphasized that while fraudulent billing is wrong, it does not inherently pose the type of risk the Whistleblower Law was designed to address. Any expansion of whistleblower protection must come from the legislature.

    Facts

    The plaintiff, Remba, alleged she was discharged from her employment at Federation Employment and Guidance Service because she objected to and refused to participate in what she believed were fraudulent billing practices directed towards New York City.

    Procedural History

    The lower court dismissed Remba’s claim. The Appellate Division affirmed the dismissal. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

    Issue(s)

    Whether Labor Law § 740(2)(c), the Whistleblower Law, protects an employee who is discharged for objecting to and refusing to participate in fraudulent billing, when such billing does not present a substantial and specific danger to public health and safety.

    Holding

    No, because Labor Law § 740(2)(c) is triggered only by a violation of a law, rule, or regulation that creates and presents a substantial and specific danger to public health and safety.

    Court’s Reasoning

    The Court of Appeals reasoned that Labor Law § 740(2)(c), similar to § 740(2)(a), requires a violation that poses a substantial and specific danger to public health and safety. The court reviewed the legislative history and determined that fraudulent billing, while potentially illegal, does not inherently create the type of danger the statute was intended to address. The court cited previous cases, such as Leibowitz v. Bank Leumi Trust Co., which involved fraudulent banking activities, and Vella v. United Cerebral Palsy, which involved improper purchasing practices, as examples of conduct that did not meet the threshold for whistleblower protection under the statute. The court acknowledged criticisms of the statute for not providing sufficient safeguards against retaliatory discharge but stated that any additional protection must come from the legislature, citing Sabetay v. Sterling Drug. The court stated, “Plaintiff maintains that she was discharged because she objected to, and refused to participate in, defendant’s purported fraudulent billing of New York City, and that such retaliatory action is prohibited under Labor Law § 740 (2) (c) (the “Whistleblower” Law). This contention is unavailing, however, primarily because we agree with the Appellate Division that Labor Law § 740 (2) (c), like section 740 (2) (a), is triggered only by a violation of a law, rule or regulation that creates and presents a substantial and specific danger to the public health and safety.” The court made clear a difference between a law violation and a public health and safety issue.