Court of Appeals Broadly Interprets New York’s General Whistleblower Statute, Labor Law § 740

The New York Court of Appeals held, in Webb-Weber v. Community Action for Human Servs., Inc. (decided May 13, 2014) that plaintiff adequately stated a claim under New York’s Whistleblower Law, Labor Law § 740(2)(a).

That statute provides, in pertinent part:

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 which violation creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud.

The Court held that the statute imposes no requirement that a complaint asserting a claim under this provision identify the specific “law, rule or regulation” allegedly violated by the employer, and reversed an Appellate Division decision holding otherwise. Specifically:

The plain language of Labor Law § 740(2)(a) does not impose any requirement that a plaintiff identify the specific “law, rule or regulation” violated as part of a section 740 claim. Subdivision 2(a) prohibits an employer from taking retaliatory personnel action against an employee because she either discloses or threatens to disclose the employer’s “activity, policy or practice.” The reasonable interpretation is that, in order to recover under a section 740 claim, plaintiff must show that she reported or threatened to report the employer’s “activity, policy or practice,” but need not claim that she cited any particular “law, rule or regulation” at that time. “[M]erely the practice — not the legal basis for finding it to be a violation — appears to be what must be reported”. Plaintiff reasons that, just as an employee need not cite the actual law, rule or regulation violated when the complaint is made, her pleading is, correspondingly, not required to identify the “law, rule or regulation” violated. We agree.

The Court stressed, however, that in order to recover under section 740, a plaintiff must ultimately prove that an actual violation occurred (rather than just that the plaintiff possessed a reasonable belief that a violation occurred), and that the violation “must be of the kind that ‘creates a substantial and specific danger to the public health or safety.'”

Nevertheless, “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.”

Applying the law to the facts, the Court concluded:

According to the amended verified complaint, plaintiff apprised Bond and other Community Action representatives about issues she claims endangered the welfare and safety of Community Action patients. Specifically, plaintiff registered complaints about the falsification of patient medication and treatment records, inadequate fire safety, mistreatment of Community Action residents, and deficiencies in patient care and in the facility itself. When those conditions continued unabated, plaintiff notified the [New York State Office of Mental Retardation and Developmental Disabilities, a/k/a OMRDD] and the New York City Fire Department. The OMRDD conducted a survey of the Community Action premises and issued a “60-Day Order”; when a follow-up survey indicated that the violations had not been remedied, Community Action was placed under sanctions by the New York State Department of Health. Moreover, the New York City Fire Department issued three violations against defendants.

Affording plaintiff’s complaint a liberal construction, as we must on a motion to dismiss, and giving the plaintiff’s allegations every favorable inference, we conclude that the complaint is sufficient to state a cause of action under section 740. The substantive allegations in the complaint, particularly those that assert that sanctions and violations were issued by public bodies, allegedly as a result of plaintiff’s complaints, sufficiently support plaintiff’s allegation that defendants violated various laws, rules or regulations. Moreover, defendants can request in a bill of particulars that plaintiff identify the particular laws, rules and regulations allegedly violated.

Congratulations to fellow NELA member Stephen Bergstein, who represented the appellant-employee, for an excellent result!

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