As reported by New York Law Journal reporter Ben Bedell, the New York’s Appellate Division, First Department recently held that employees could file suit against their former employer for both sexual harassment and violation of New York’s whistleblower protection law even though the statute bars employees from seeking remedies available under any other law.
The plaintiffs, who are former employees of a Korean bank, alleged that a manager sexually harassed them and that the Bank negligently hired and retained the manager after learning of his alleged sexual harassment. The plaintiffs also asserted retaliation claims under New York’s whistleblower law (Labor Law §740), which prohibits retaliation against employees who complain about conduct that “creates and presents a substantial and specific danger to the public health or safety, or which constitutes health care fraud,” and the New York City Human Rights Law (“NYCHRL”).
The employer sought to dismiss the plaintiffs’ sexual harassment, negligence and NYCHRL retaliation claims because New York’s whistleblower law expressly states that asserting whistleblower retaliation claims “shall be deemed a waiver of the rights and remedies available under any other contract, collective bargaining agreement, law, rule or regulation or under the common law.” The lower court dismissed the plaintiffs’ whistleblower retaliation claims, ruling that the plaintiffs’ complaint failed to allege the requisite effect on the health and safety of the public at large. The lower court also dismissed the plaintiff’s NYCHRL claims as waived by the plaintiffs’ pursuit of their whistleblower claims. However, the court denied the bank’s motion to dismiss the plaintiffs’ negligence and sexual harassment claims, holding that they are “separate and independent from plaintiffs’ retaliation claim, and the conduct underlying such claims does not arise out of defendant’s alleged retaliatory personnel action.”
The First Department, in affirming the lower court’s decision to deny the bank’s motion to dismiss the negligence and harassment claims, acknowledged that if an employee chooses to institute an action pursuant to Section 740, “any alternative means of redress is thereby waived.” Nevertheless, the court ruled that because New York’s whistleblower law is limited to prohibiting “retaliatory personnel action,” the statute’s waiver provision did not bar the plaintiffs’ sex harassment and negligence claims since “the purpose of [Section 740] and the relief it affords make it clear that claims predicated on the statute are distinct from claims predicated upon the underlying tortious conduct identified by plaintiffs.” Therefore, the court held that the plaintiffs’ assertion of a whistleblower claim does not preclude workplace discrimination claims that are “separate and independent from plaintiffs’ retaliation claim.”
The First Department’s decision reinforces that employees who assert retaliation claims under New York’s Whistleblower Law are barred from seeking relief for retaliation under any other statute or common law. Still, employers should be aware that claims “separate and independent” from retaliation claims are not barred by the whistleblower law’s exclusivity provision.