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Whistleblower Protections in New York: NY Labor Law § 740 Explained

You discovered your employer is breaking the law. If you report it, can they fire you?

No. New York Labor Law § 740 protects employees who blow the whistle on illegal conduct. If your employer violates law, rule, or regulation, you have the right to report it without fear of retaliation.

This guide explains how NY Labor Law § 740 works, what violations it covers, how to qualify for protection, and what to do if you face retaliation for whistleblowing.

Why This Matters in New York

New York provides strong whistleblower protections that go beyond federal law in many ways.

Key protections under § 740:

  • Covers all violations of law, rule, or regulation
  • Protects both public and private sector employees
  • Allows internal and external reporting
  • Provides remedies including reinstatement and back pay
  • No employer size requirement

Your employer cannot fire, demote, suspend, or punish you for reporting illegal activity. The law encourages employees to serve as the first line of defense against corporate wrongdoing.

What Is NY Labor Law § 740?

New York Labor Law § 740, also called the Whistleblower Protection Act, protects employees who report employer violations of law.

The law protects you when you:

  • Disclose employer activity that violates law, rule, or regulation
  • Disclose activity that creates substantial danger to public health or safety
  • Refuse to participate in illegal activity
  • Provide information or testify in investigations or proceedings

“Law, rule, or regulation” includes:

  • Federal, state, or local statutes
  • Regulations issued by government agencies
  • Court orders
  • Administrative rules

This is broad coverage. Almost any illegal conduct by your employer can qualify.

What Violations Does § 740 Cover?

Section 740 protects disclosure of any violation of law, rule, or regulation, or activity creating substantial danger to public health or safety.

Environmental Violations

Examples:

  • Illegal dumping of hazardous waste
  • Air quality violations
  • Water pollution
  • Failure to obtain required environmental permits
  • Improper disposal of chemicals
  • Asbestos or lead paint violations

Real example: Factory worker Luis reported his employer was discharging untreated wastewater into a river, violating the Clean Water Act. He reported it to his supervisor and the NY DEC. When his employer demoted him, Luis filed a § 740 claim and recovered $280,000.

Healthcare Fraud and Violations

Examples:

  • Medicare or Medicaid fraud
  • Billing for services not provided
  • Upcoding or unbundling
  • HIPAA violations
  • Patient safety violations
  • Improper prescribing practices
  • Falsification of medical records

Real example: Nurse Sarah discovered her clinic was billing Medicare for services never rendered. She reported the fraud to her supervisor and then to the Office of Inspector General. The clinic fired her one week later. Sarah recovered over $400,000 in her § 740 and NYSHRL retaliation claims, plus a federal whistleblower award.

Financial Fraud

Examples:

  • Securities fraud
  • Tax evasion
  • Money laundering
  • Bank fraud
  • Insurance fraud
  • Falsification of business records
  • Accounting fraud

Real example: Accountant Robert was ordered to falsify financial statements. He refused and reported the fraud to the company’s board. He was fired for “insubordination.” Robert recovered over $500,000 under § 740 and NYSHRL, plus a whistleblower award from the SEC.

Workplace Safety Violations

Examples:

  • OSHA violations
  • Unsafe equipment or working conditions
  • Failure to provide required safety equipment
  • Inadequate safety training
  • Exposure to toxic substances
  • Construction safety violations

Real example: Construction worker Miguel reported exposed electrical wiring that created electrocution risk. After he filed an OSHA complaint, he was laid off. Miguel recovered through both OSHA proceedings and a § 740 claim.

Food Safety Violations

Examples:

  • Food handling violations
  • Sanitation violations
  • Failure to maintain proper temperatures
  • Serving expired or contaminated food
  • Pest infestations
  • Lack of proper food safety certifications

Real example: Restaurant employee Chen reported repeated food safety violations to the health department after management ignored his concerns. His hours were cut from 40 to 10 per week. Chen recovered back pay and compensatory damages under § 740.

Labor Law Violations

Examples:

  • Minimum wage or overtime violations
  • Failure to provide required breaks
  • Misclassification of employees
  • Child labor violations
  • Prevailing wage violations (public contracts)
  • Failure to pay required benefits

Note: Wage complaints may be better filed under NY Labor Law § 215, which provides additional protections including liquidated damages.

Building Code and Housing Violations

Examples:

  • Building code violations
  • Fire safety violations
  • Housing code violations
  • Failure to obtain required permits
  • Unsafe construction practices

Real example: Building superintendent Maria reported multiple building code violations that created fire hazards. Her landlord/employer evicted her from her apartment and terminated her employment. Maria recovered damages under § 740 and housing court ordered her reinstatement.

Consumer Protection Violations

Examples:

  • Deceptive trade practices
  • False advertising
  • Pyramid schemes
  • Unlicensed activity requiring licensing
  • Warranty fraud

Government Contract Fraud

Examples:

  • False claims to government
  • Overcharging on government contracts
  • Providing substandard goods or services
  • Bid rigging
  • Kickbacks

Note: Federal False Claims Act may also apply and provides whistleblower awards up to 30% of government recovery.

Other Covered Violations

Additional examples:

  • Discrimination or civil rights violations (also covered by NYSHRL)
  • Immigration violations
  • Campaign finance violations
  • Professional licensing violations
  • Data privacy violations
  • Intellectual property theft
  • Traffic safety violations (commercial vehicles)

Requirements to Qualify for § 740 Protection

To receive protection under NY Labor Law § 740, you must meet specific requirements.

1. Report to Supervisor First (With Exceptions)

General rule: You must report the violation to your supervisor and give your employer a reasonable opportunity to correct it.

“Supervisor” includes:

  • Direct supervisor or manager
  • Upper management
  • Company president or owner
  • Compliance department
  • Human resources
  • Internal hotline

You can skip internal reporting if:

  • You have reasonable cause to believe your supervisor is involved in the violation
  • You have reasonable cause to believe reporting to supervisor would result in destruction of evidence
  • An emergency exists requiring immediate disclosure
  • You reasonably fear physical harm
  • You have already reported to supervisor in writing

Example: You discover your supervisor is embezzling company funds. You can report directly to law enforcement or a government agency without first reporting to your supervisor, since they are involved in the violation.

Important: The statute requires written notice to the supervisor unless one of the exceptions applies. Put your internal report in writing to document compliance with this requirement.

2. Reasonable Belief a Violation Occurred

You must have a reasonable, good-faith belief that the activity you report violates law, rule, or regulation.

You do not need to:

  • Be correct about the violation
  • Cite the specific law being violated
  • Prove the violation occurred
  • Be a lawyer or legal expert

Example: You believe your employer is violating environmental regulations based on chemical odors and improper storage. Even if investigation reveals no violation, you are protected if your belief was reasonable.

Not protected: Complaints made in bad faith with knowledge they are false.

3. Report Activity That Violates Law, Rule, or Regulation

The activity you report must violate actual law, rule, or regulation. Personal grievances or general workplace complaints do not qualify.

Qualifies:

  • OSHA violations
  • Tax fraud
  • Environmental law violations
  • Healthcare fraud
  • Securities fraud

Does not qualify:

  • Complaining your boss is “unfair”
  • General personality conflicts
  • Complaints about management decisions within employer discretion
  • Violations of company policy that do not violate law

Gray area: Some company policies may reflect legal requirements. For example, a company policy against discrimination reflects legal requirements under NYSHRL. Reporting discrimination may qualify under both § 740 and NYSHRL.

4. Disclose or Threaten to Disclose the Violation

Protection applies when you:

  • Actually disclose the violation (internally or externally)
  • Threaten to disclose the violation
  • Refuse to participate in the violation

Example: Your employer orders you to falsify safety records. You refuse and say you will report the violation if it continues. This threat to disclose is protected.

5. Provide Information or Testify

You are protected when you:

  • Provide information to government investigators
  • Testify at hearings or in court proceedings
  • Cooperate with government audits or inspections
  • Provide documents or evidence

Example: OSHA investigates your employer after receiving an anonymous complaint. OSHA interviews you and you provide truthful information about safety violations. Your employer cannot retaliate for this cooperation.

Who Can Report Under § 740?

Covered Employees

Protected individuals:

  • Current employees
  • Former employees (for post-employment retaliation)
  • Full-time and part-time employees
  • Temporary employees
  • Probationary employees

All employment statuses are covered: At-will employees, contract employees, and even probationary employees receive full protection.

Covered Employers

All employers are covered, regardless of size.

Unlike many employment laws, § 740 has no minimum employee threshold. If you work for a business with one employee or 10,000 employees, you are equally protected.

Covered employers include:

  • Private companies
  • Non-profit organizations
  • Professional practices (law firms, medical practices)
  • Small businesses
  • Large corporations

Not covered under § 740: Public sector employees (but may have protection under other statutes). However, courts have held that public employees may still invoke § 740 in some circumstances.

Public Sector vs. Private Sector

NY Labor Law § 740 primarily protects private sector employees. Public sector employees have separate whistleblower protections.

Private Sector (§ 740 Applies)

Private sector employees can use § 740 for whistleblower retaliation claims.

Advantages:

  • 2-year statute of limitations
  • Remedies include reinstatement, back pay, front pay
  • Attorney fees available
  • Established case law and procedures

Public Sector (Other Laws Apply)

Public sector employees have protection under:

  • NY Civil Service Law § 75-b (state employees)
  • NY Civil Service Law § 76 (local government employees)
  • First Amendment (constitutional protection)

Public employees may also invoke § 740 in some cases. Recent court decisions have found § 740 protections may extend to public employees when:

  • The violation affects public health or safety
  • The employee reports externally (not just internally)
  • No adequate alternative remedy exists

Recommendation: Public sector employees should consult an attorney to determine which statute provides the strongest protection.

Where Can You Report?

Section 740 protects both internal and external reporting.

Internal Reporting

Report to:

  • Your direct supervisor (unless exceptions apply)
  • Upper management
  • Company owner or president
  • Human resources department
  • Compliance department
  • Internal ethics hotline
  • Board of directors

Advantages of internal reporting:

  • Gives employer chance to fix the problem
  • May resolve issue without external involvement
  • Satisfies § 740’s notice requirement
  • Less adversarial

Disadvantages:

  • Employer may retaliate before correcting violation
  • Internal investigation may not be thorough
  • May tip off wrongdoers to destroy evidence

Best practice: Report in writing and keep a copy. Document the date, recipient, and content of your report.

External Reporting

Report to government agencies:

  • Industry-specific regulators (DEC, DOH, etc.)
  • Law enforcement (police, district attorney)
  • Attorney General’s office
  • Inspector General offices
  • Federal agencies (EPA, OSHA, SEC, etc.)
  • Professional licensing boards

Advantages:

  • Independent investigation
  • Greater pressure on employer to correct
  • May result in fines or prosecution
  • Creates official record

When to report externally:

  • Supervisor is involved in the violation
  • Employer refuses to correct after internal report
  • Emergency or imminent danger exists
  • Violation is severe (fraud, public safety risk)

You can report simultaneously to your supervisor and to government agencies. This may be the safest approach.

Reporting to Media

Caution: NY Labor Law § 740 does not explicitly protect reporting only to the media without also reporting internally or to a government agency.

Best practice: If you plan to talk to media, first report internally or to an appropriate government agency. This ensures § 740 protection applies.

Exception: If the violation involves imminent danger to public health or safety, immediate media disclosure may be justified.

Reporting to Private Attorneys

Consulting with an attorney about the violation is not disclosure under § 740. However, your attorney can help you report properly to maximize protection.

What Is Not Protected Under § 740?

Understanding the limitations helps you avoid losing protection.

Personal Grievances

General workplace complaints not involving legal violations are not protected.

Not protected:

  • “My boss is unfair”
  • “I don’t like my schedule”
  • “Management plays favorites”
  • “My workload is too heavy”

Company Policy Violations (That Don’t Violate Law)

Violations of company policy that do not implicate legal violations are not protected under § 740.

Example: Your employer violates its own internal approval procedures for expenditures, but no law requires those procedures. This may not qualify for § 740 protection.

Exception: If the company policy reflects a legal requirement, violation may qualify. For example, a company policy prohibiting discrimination reflects legal requirements under NYSHRL.

Bad Faith Complaints

Deliberately false complaints made with knowledge of their falsity are not protected.

Example: You fabricate a safety complaint to avoid discipline for performance issues. This is bad faith.

Clarification: Being wrong about whether a violation occurred is not bad faith. You only lose protection if you knowingly lie.

Reporting Only to Media

As discussed above, reporting solely to the media without also reporting internally or to a government agency may not qualify for protection.

Remedies Available Under § 740

If your employer retaliates for whistleblowing, § 740 provides several remedies.

Injunctive Relief

Court can order:

  • Reinstatement to your position
  • Orders prohibiting further retaliation
  • Restoration of benefits
  • Removal of disciplinary records

Reinstatement is often the most important remedy. The court can order your employer to give you your job back with the same seniority, benefits, and terms.

Back Pay

Back pay includes all wages and benefits you lost from the date of retaliation until judgment.

Components:

  • Lost wages
  • Lost overtime
  • Lost bonuses and commissions
  • Lost benefits (health insurance, retirement contributions)
  • Value of lost stock options or equity

Example: You were fired and out of work for 18 months before trial. Back pay includes all wages you would have earned during those 18 months.

Duty to mitigate: You must make reasonable efforts to find comparable employment. Back pay may be reduced by earnings from replacement employment or failure to search for work.

Front Pay

Front pay compensates for future lost earnings when reinstatement is not feasible.

When awarded:

  • Relationship is too hostile for reinstatement
  • Your position no longer exists
  • You found comparable replacement employment
  • You cannot relocate back to the employer’s area

Calculation: Courts estimate how long you would have worked for the employer and calculate lost future earnings over that period.

Example: You were earning $75,000 per year. You are 45 years old and would likely work another 20 years. Front pay could be $1.5 million (reduced to present value).

Costs and Attorney Fees

Courts must award reasonable attorney fees and costs if you prevail under § 740.

This is critical because employment litigation is expensive. The fee-shifting provision allows employees to hire attorneys on contingency and ensures access to justice.

Attorney fees include:

  • Hourly fees for all work performed
  • Expert witness fees
  • Court costs and filing fees
  • Deposition and discovery costs

No Compensatory or Punitive Damages

Important limitation: NY Labor Law § 740 does not provide compensatory damages for emotional distress or punitive damages.

This is a significant gap compared to NYSHRL, which allows unlimited compensatory and punitive damages.

Solution: File claims under both § 740 and NYSHRL. NYSHRL covers retaliation for reporting violations that implicate civil rights, discrimination, or public policy. Together, these statutes provide comprehensive protection and maximum recovery.

Criminal Penalties for Employer

Section 740 also creates criminal liability. Employers who violate § 740 can be guilty of a violation punishable by civil penalties.

While criminal prosecution is rare, this provision adds teeth to the statute.

§ 740 vs. Other Anti-Retaliation Laws

Understanding how § 740 compares to other laws helps you choose the best filing strategy.

Feature NY Labor Law § 740 NYSHRL NY Labor Law § 215
What It Covers Whistleblowing (violations of law, rule, regulation) Discrimination, civil rights violations, public policy Wage and hour complaints
Statute of Limitations 2 years 3 years 6 years
Employer Size Any size 4+ employees Any size
Notice Requirement Must report to supervisor first (with exceptions) No internal reporting required No internal reporting required
Compensatory Damages No Yes (unlimited) No
Punitive Damages No Yes (unlimited) No
Liquidated Damages No No Yes (double damages for willful violations)
Remedies Reinstatement, back pay, front pay, attorney fees Back pay, front pay, compensatory damages, punitive damages, attorney fees Back pay, liquidated damages, attorney fees
Individual Liability No Yes (supervisors can be sued personally) No

Key Takeaway: File under multiple statutes when possible to maximize protection and recovery.

Example: You blow the whistle on healthcare fraud (§ 740 protection) and are retaliated against. This retaliation also violates public policy under NYSHRL. File claims under both statutes. § 740 provides reinstatement and back pay; NYSHRL provides compensatory damages for emotional distress and punitive damages.

How to Prove a § 740 Claim

To prevail on a § 740 whistleblower retaliation claim, you must prove four elements.

1. Prior Protected Activity

You must show you engaged in protected activity under § 740:

  • Disclosed or threatened to disclose employer violation of law, rule, or regulation
  • Disclosed or threatened to disclose activity creating substantial danger to public health or safety
  • Provided information or testimony to government agency
  • Objected to or refused to participate in activity you believed violated law

Evidence:

  • Written complaints or reports
  • Emails documenting your disclosure
  • Testimony from witnesses who heard your complaint
  • Records of calls or meetings with government agencies

2. Employer Knowledge

Your employer must have known about your protected activity.

How to prove:

  • You reported directly to supervisor or HR
  • Employer acknowledged receipt of your complaint
  • Employer investigated your complaint
  • Management discussed your complaint in meetings
  • Your report was public or widely known

Note: If you make an anonymous report, you may not be protected unless your employer later learns of your identity and retaliates.

3. Adverse Employment Action

You must show your employer took adverse action against you.

Examples of adverse actions:

  • Termination or forced resignation
  • Demotion or pay reduction
  • Suspension or disciplinary action
  • Transfer to less desirable position
  • Hostile treatment or harassment

Standard: Any action that would deter a reasonable person from engaging in whistleblowing.

4. Causal Connection

You must show a causal connection between your protected activity and the adverse action.

How to prove causation:

Temporal proximity: Adverse action occurred shortly after your protected activity

  • Strong: Action within days or weeks
  • Moderate: Action within a few months
  • Weak: Action many months later (but may still suffice with other evidence)

Pattern of antagonism: Hostile treatment began after your protected activity

Direct evidence: Statements by management connecting your whistleblowing to the adverse action

  • “You shouldn’t have gone to OSHA”
  • “We don’t want troublemakers here”
  • “Why couldn’t you just handle this internally?”

Shifting or pretextual reasons: Employer’s stated reason for adverse action changes or lacks credibility

Timing and pattern: Consistent positive performance until protected activity, then sudden negative reviews

See proving retaliation for detailed guidance on proving causation and pretext.

Real-World Whistleblower Examples

Example 1: Environmental Whistleblowing

Situation: Chemical plant supervisor Lisa discovered her employer was illegally storing and disposing of hazardous waste without required permits. She reported it to her manager, who told her “it’s cheaper this way” and instructed her not to report externally.

Protected activity: Lisa reported the violations to the NY Department of Environmental Conservation. She followed § 740 requirements by first reporting internally.

Retaliation: Three weeks after the DEC inspection, Lisa was demoted to entry-level technician with a $35,000 pay cut. Her employer claimed “restructuring,” but no other supervisors were affected.

Outcome: Lisa filed a § 740 claim and a NYSHRL public policy claim. She recovered $425,000 in back pay, front pay, compensatory damages, and attorney fees. The employer also faced DEC fines exceeding $1 million.

Example 2: Healthcare Fraud

Situation: Medical billing specialist Thomas noticed his clinic was systematically upcoding medical procedures to bill Medicare and private insurance at higher rates. He reported this to his supervisor multiple times, but the practice continued.

Protected activity: Thomas reported the fraudulent billing to the Office of Inspector General and New York Attorney General’s Medicaid Fraud Control Unit.

Retaliation: The clinic terminated Thomas two days after receiving notice of the investigation, claiming “position elimination.” The clinic hired a replacement one month later.

Outcome: Thomas filed claims under § 740, NYSHRL, and the federal False Claims Act. He recovered $390,000 in back pay, front pay, and compensatory damages. He also received a qui tam whistleblower award of $850,000 (share of government’s fraud recovery). Total recovery exceeded $1.2 million.

Example 3: Financial Fraud

Situation: Internal auditor Jennifer discovered the CFO was embezzling funds through fraudulent vendor payments. She reported this to the company president, who was friends with the CFO and took no action.

Protected activity: Jennifer reported the embezzlement to law enforcement and the district attorney’s office. She provided documentation of the fraud.

Retaliation: The company terminated Jennifer for “violating confidentiality policies.” The CFO and president claimed Jennifer “stole” confidential documents (which she legally preserved as evidence).

Outcome: Jennifer filed a § 740 claim. The court found her document preservation was protected activity. She recovered $510,000 in damages. The CFO was criminally prosecuted and convicted. The company president faced civil liability for aiding retaliation.

Example 4: Food Safety Violations

Situation: Restaurant manager Carlos observed repeated food safety violations: expired meat being served, rodent infestations, employees not washing hands, food stored at improper temperatures. He reported these violations to the owner multiple times.

Protected activity: When the owner took no action, Carlos reported the violations to the county health department.

Retaliation: The owner learned Carlos made the health department complaint and immediately terminated him, stating “we can’t have people going behind our backs.”

Outcome: Carlos filed a § 740 claim. The direct evidence (owner’s statement) proved retaliation. Carlos recovered $180,000 in back pay, front pay, and attorney fees. The restaurant was shut down after multiple health code violations were confirmed.

Example 5: Construction Safety

Situation: Foreman Michael witnessed his construction company systematically violating OSHA fall protection requirements. Workers were required to work at heights without harnesses or guardrails.

Protected activity: After multiple internal complaints were ignored, Michael filed an OSHA complaint. He also refused to order workers to perform unsafe tasks.

Retaliation: The company fired Michael for “insubordination” (refusing to order unsafe work) and “creating a hostile work environment” (reporting to OSHA).

Outcome: Michael filed complaints with OSHA (whistleblower protection) and under § 740 and NYSHRL. OSHA ordered reinstatement within 30 days. Michael’s § 740 and NYSHRL claims resulted in additional compensatory damages. Total recovery: $340,000, plus reinstatement.

Example 6: Securities Fraud

Situation: Financial analyst Rebecca discovered her investment firm was making material misrepresentations to investors about fund performance. She reported this to her supervisor and the firm’s compliance department, which took no action.

Protected activity: Rebecca reported the securities fraud to the SEC. She provided detailed documentation of the false statements.

Retaliation: The firm terminated Rebecca during the SEC investigation, claiming “poor performance” despite consistently excellent reviews.

Outcome: Rebecca filed a § 740 claim and an SEC whistleblower complaint. She recovered $680,000 in her employment retaliation case. She later received an SEC whistleblower award exceeding $2 million. Total recovery exceeded $2.6 million.

Example 7: Tax Evasion

Situation: Bookkeeper Sandra discovered her employer was maintaining two sets of books: one accurate set and one fraudulent set for tax purposes to underreport income.

Protected activity: Sandra reported the tax fraud to the IRS and the New York State Department of Taxation and Finance. She provided copies of both sets of books.

Retaliation: Her employer terminated her for “disloyalty” and “violating confidentiality.”

Outcome: Sandra filed a § 740 claim and an IRS whistleblower claim. She recovered $290,000 in her employment case and later received an IRS whistleblower award of 22% of the taxes recovered (approximately $1.8 million). Total recovery exceeded $2 million.

Example 8: Workers’ Compensation Fraud

Situation: HR manager Daniel discovered his employer was pressuring injured employees not to file workers’ comp claims and was misclassifying employees to reduce workers’ comp insurance premiums.

Protected activity: Daniel reported the workers’ comp fraud to the New York Workers’ Compensation Board and the state insurance fraud bureau.

Retaliation: The company fired Daniel for “failure to support company objectives” and “undermining management.”

Outcome: Daniel filed claims under § 740, NYSHRL, and Workers’ Compensation Law. He recovered $425,000 in damages. The employer faced significant fines and insurance penalties.

Example 9: Patient Care Violations

Situation: Nursing home RN Patricia observed systematic patient neglect: inadequate staffing, patients left in soiled conditions, medication errors, pressure ulcers not treated. She reported these issues to facility management repeatedly with no improvement.

Protected activity: Patricia reported the patient care violations to the NY Department of Health and federal CMS. She documented specific instances of neglect.

Retaliation: The facility terminated Patricia, claiming she “falsified records” by documenting incidents management wanted ignored.

Outcome: Patricia filed a § 740 claim and NYSHRL public policy claim. State investigators confirmed the violations. Patricia recovered $375,000 in damages. The facility faced civil monetary penalties and was placed on heightened oversight.

Example 10: Educational Fraud

Situation: College admissions officer James discovered his institution was falsifying admission statistics and job placement rates to mislead accreditors and prospective students.

Protected activity: James reported the fraud to the accrediting agency and the state education department.

Retaliation: The college terminated James during the investigation, claiming “budget cuts.” Other admissions officers were not laid off.

Outcome: James filed a § 740 claim. The targeted nature of the termination established retaliation. He recovered $310,000 in damages. The institution faced accreditation sanctions.

Example 11: Wage Theft Whistleblowing

Situation: Payroll manager Kim discovered her employer was systematically failing to pay overtime to dozens of hourly employees and was misclassifying supervisors as exempt.

Protected activity: Kim reported the wage violations to the NY Department of Labor. She provided detailed payroll records.

Retaliation: The company fired Kim for “breaching confidentiality” and “acting against company interests.”

Outcome: Kim filed claims under both § 740 and § 215 (wage complaint retaliation). She recovered $240,000 under § 740 and additional liquidated damages under § 215. Total recovery: $385,000. The company faced DOL investigation resulting in back wages for 80+ employees.

Example 12: Government Contract Fraud

Situation: Defense contractor engineer Mark discovered his company was delivering defective parts to the military while certifying they met specifications. The defects posed safety risks to military personnel.

Protected activity: Mark reported the fraud to the Defense Contract Audit Agency and filed a qui tam lawsuit under the False Claims Act. He also made internal reports per § 740 requirements.

Retaliation: The company fired Mark, claiming his work quality declined (untrue—he had consistently excellent reviews).

Outcome: Mark filed a § 740 claim, NYSHRL claim, and federal False Claims Act retaliation claim. He recovered $520,000 in employment damages. His qui tam case resulted in a whistleblower award exceeding $4 million. Total recovery exceeded $4.5 million.

Example 13: Child Care Violations

Situation: Daycare teacher Monica observed repeated health and safety violations: inadequate supervision, expired food, unsafe playground equipment, staff-to-child ratios violated, background checks not performed.

Protected activity: Monica reported the violations to the state child care licensing agency after the daycare owner ignored her concerns.

Retaliation: The owner fired Monica, claiming she “created a negative environment” and “undermined parental confidence.”

Outcome: Monica filed a § 740 claim. The state confirmed the violations and temporarily suspended the daycare’s license. Monica recovered $195,000 in damages.

Example 14: Environmental Health Hazard

Situation: School maintenance supervisor Richard discovered dangerous levels of lead in the school’s drinking water. He reported it to school administrators, who told him not to alarm parents and took no remedial action.

Protected activity: Richard reported the lead contamination to the state health department and EPA.

Retaliation: The school district transferred Richard to a less desirable position at a school 40 miles farther from his home and removed his supervisor title.

Outcome: Richard filed a § 740 claim. The transfer was found to be adverse action. He recovered $280,000 and was restored to his original position. The school district faced intense public scrutiny and was required to replace all lead-contaminated plumbing.

Example 15: Insurance Fraud

Situation: Insurance claims adjuster Valerie discovered her company was systematically denying legitimate claims using fraudulent reasons, particularly targeting elderly policyholders.

Protected activity: Valerie reported the fraud to the NY Department of Financial Services and provided detailed claim files.

Retaliation: The company terminated Valerie for “not being a team player” and “excessive sympathy for claimants.”

Outcome: Valerie filed a § 740 claim and NYSHRL public policy claim. She recovered $410,000 in damages. The insurance company faced regulatory sanctions, fines, and required policy changes.

What to Do If You Discover Illegal Activity

If you discover your employer is breaking the law, follow these steps to protect yourself.

Step 1: Document the Violation

Before reporting, gather evidence:

  • Take detailed notes (dates, times, people involved)
  • Save relevant documents (emails, records, policies)
  • Identify witnesses
  • Photograph evidence if appropriate
  • Create a timeline

Important: Take care not to violate legitimate confidentiality rules or break the law yourself. Generally, preserving evidence of illegal activity is protected, but consult an attorney if you have concerns.

Step 2: Determine If It Violates Law

Research whether the conduct violates law, rule, or regulation:

  • Federal, state, or local statutes
  • Agency regulations
  • Court orders
  • Professional licensing requirements

If unsure, consult an employment attorney. They can help you determine if § 740 protection applies.

Step 3: Report Internally First (Unless Exception Applies)

Put your internal report in writing:

  • Address it to your supervisor, HR, or compliance department
  • Describe the specific violation
  • Provide supporting evidence
  • Request correction of the violation
  • Keep a copy for your records

Include this language: “I am reporting this violation pursuant to my rights under New York Labor Law § 740 and request that the company investigate and correct this violation.”

Exceptions (you can skip internal reporting):

  • Supervisor is involved in the violation
  • Imminent danger exists
  • You fear physical harm
  • Reasonable belief supervisor would destroy evidence

Step 4: Give Reasonable Time to Correct

Section 740 requires giving your employer reasonable opportunity to correct.

“Reasonable time” depends on the violation:

  • Imminent danger: Immediate action required
  • Serious violations: Days to weeks
  • Less urgent matters: Weeks to months

If your employer refuses to correct or reasonable time has passed, proceed to external reporting.

Step 5: Report Externally

File complaints with appropriate government agencies:

  • Environmental violations: NY DEC, EPA
  • Healthcare fraud: Office of Inspector General, NY Attorney General MFCU
  • Securities fraud: SEC
  • Tax fraud: IRS, NY Department of Taxation
  • Safety violations: OSHA, NY DOL
  • Food safety: County health department, NY DOH
  • Other violations: Appropriate regulatory agencies

Provide detailed information:

  • Description of violation
  • Evidence and documentation
  • Names of individuals involved
  • Timeline of events
  • Your contact information

Step 6: Consult an Employment Attorney

Before reporting (ideal): An attorney can help you strategize to maximize protection and recovery.

After reporting: If you face retaliation, contact an attorney immediately.

Attorney can:

  • Evaluate your § 740 claim
  • Advise on reporting procedures
  • Communicate with your employer
  • File administrative charges
  • Negotiate settlement
  • Represent you in litigation
  • Help you file for whistleblower awards (False Claims Act, SEC, IRS)

Most employment attorneys offer free consultations and work on contingency (no fee unless you win).

Step 7: Preserve Evidence of Retaliation

If you experience retaliation after reporting:

  • Document all adverse actions
  • Save emails and communications
  • Note dates, times, and witnesses
  • Keep copies of performance reviews
  • Record any hostile statements

Step 8: Know Your Deadlines

NY Labor Law § 740: 2 years from retaliatory act

File your claim promptly. Do not wait until the deadline approaches.

Step 9: File Retaliation Claims

If retaliated against, file claims under:

  • NY Labor Law § 740 (lawsuit in state court)
  • NYSHRL (NYSDHR or direct lawsuit)
  • Other applicable statutes

File under multiple statutes when possible to maximize recovery.

Step 10: Consider Whistleblower Awards

Some violations qualify for whistleblower awards:

  • False Claims Act (federal): 15-30% of government recovery
  • SEC whistleblower program: 10-30% of sanctions over $1 million
  • IRS whistleblower program: 15-30% of taxes recovered
  • CFTC whistleblower program: 10-30% of sanctions
  • Other agency programs: Various amounts

An attorney can help you file for these awards.

Common Questions About Whistleblower Protection

Am I protected if I report illegal activity?

Yes, if you meet § 740 requirements: (1) report to supervisor first (with exceptions), (2) good-faith belief of violation of law, rule, or regulation, and (3) disclosure or threat to disclose.

Do I need to report to my supervisor first?

Generally yes, unless: (1) supervisor is involved, (2) imminent danger, (3) fear of physical harm, (4) reasonable belief evidence would be destroyed, or (5) you already reported in writing.

What if I’m not sure if the conduct violates a law?

You only need a reasonable, good-faith belief. You don’t need to be correct. Consult an attorney if you’re unsure.

Can I report anonymously?

You can make anonymous reports to government agencies, but you may not be protected under § 740 unless your employer later learns your identity and retaliates. Named reports provide stronger protection.

What if my employer asks me to sign an NDA?

NDAs cannot prevent you from reporting illegal activity to government agencies. Any such provision is unenforceable and likely illegal.

Can I go to the media?

Report to your supervisor and/or government agencies first. Reporting only to media may not be protected under § 740.

What if I participated in the illegal activity?

You may still be protected if you stop participating and report the violation. However, you may face consequences for your own illegal conduct. Consult an attorney about immunity or leniency.

Can my employer retaliate after I leave?

No. Section 740 protects former employees from post-employment retaliation like bad references or blacklisting.

What if my employer says they will sue me?

Threats of legal action to prevent you from reporting can themselves constitute retaliation. Document the threats and consult an attorney.

How long do I have to file a § 740 claim?

Two years from the retaliatory act. File promptly—do not wait until the deadline.

Can I recover damages for emotional distress?

Section 740 does not provide compensatory damages. However, NYSHRL does. File under both statutes.

What if my employer claims I stole documents?

Preserving evidence of illegal activity is generally protected. However, be careful not to take documents unnecessarily or violate legitimate confidentiality. Consult an attorney if you have concerns about specific documents.

Related Topics

Next Steps

If you are considering blowing the whistle on illegal activity:

  1. Document the violation thoroughly with evidence
  2. Consult an employment attorney before reporting (ideal)
  3. Report to supervisor in writing (unless exception applies)
  4. Report to government agency if employer fails to correct
  5. Document any retaliation immediately
  6. File § 740 and NYSHRL claims if retaliated against
  7. Consider whistleblower awards (False Claims Act, SEC, IRS)

New York law protects employees who blow the whistle on illegal conduct. You have the right to report violations without fear of retaliation.

Experienced retaliation after reporting illegal activity? Contact an experienced New York employment attorney today for a free consultation.

References

Disclaimer: This article provides general information about New York whistleblower protection law. It is not legal advice. For guidance on your specific situation, consult a qualified employment attorney licensed in New York.