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.