COVID Whistleblower Retaliation (NY Labor Law § 740) Claim Dismissed

In HC2, Inc. v. Delaney, 20-cv-3178, 2020 WL 7480675 (S.D.N.Y. Dec. 18, 2020), the court, inter alia, dismissed the employee’s  whistleblower retaliation claims.

The employee (Delaney) alleges that the employer (HC2) violated New York Labor Law §§ 740 and 215 by terminating his employment after he complained about HC2’s handling of the Covid-19 pandemic. Specifically, Delaney alleged that he was terminated because of the complaints contained in an his email and for criticizing HC2’s human resources department, and that this lawsuit (brought by HC2 against Delaney) was filed in retaliation for his complaints.

This decision is instructive as to how courts will apply New York’s general whistleblower statute, Labor Law Section 740, in the context of COVID-related complaints.

The court summarized the black-letter law as follows:

Section 740 provides, in relevant part, that “[a]n 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 prevents a substantial and specific danger to the public health or safety.” N.Y. Lab. L. § 740. Thus, “[a]t the pleading stage, a plaintiff must (1) specify that an actual violation occurred, and (2) describe how the defendant’s activities endangered the health and safety of the public.” …

Under Section 740, neither the complaint to the employer nor the complaint filed in court need identify the actual law, rule, or regulation the employer violated, but “the employee’s complaint to the company 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 allegedly complained-of conduct.’ ” … Moreover, the substantive allegations of the complaint must allege facts that, if true, would violate a specific law, rule or regulation.

[Citations omitted.]

Applying the law, the court explained:

Delaney’s allegations fail to state a claim under Section 740. Delaney bases his claim on his March 17, 2020 email to HC2 complaining that HC2 had permitted several employees to come to work with “flu-like symptoms,” noting that his workplace was a “closed environment,” and requesting the opportunity to “work from home or be paid to stay at home.” Delaney claims that the conduct that was the subject of his March 17, 2020 email violated executive orders by Governor Cuomo’s declaring a State of Emergency and instructing certain categories of employers to observe certain safety measures; guidance issued by the New York City Health Department (“NYCHD”) to New York employers that they should promote physical distancing and send home immediately workers who arrive sick or become sick at work (“NYCHD Guidance”); and interim guidance of the federal Centers for Disease Control and Prevention (“CDC”) that indicate that employers “are responsible for providing a safe and healthy workplace” and should “separate[e] sick employees” (“CDC Guidance”).

Drawing all reasonable inferences in favor of Delaney, the complaint nevertheless fails to allege conduct that, at the time, violated any law, rule or regulation. The only Executive Orders by Governor Cuomo that pre-dated Delaney’s March 17, 2020 email (i.e., the only Executive Orders that could possibly have been the basis of Delaney’s complaint and HC2’s alleged retaliation) are Executive Order No. 202, issued on March 7, 2020, and Executive Order 202.4, issued on March 16, 2020. Neither Executive Order prohibited the conduct of which Delaney complained or established any requirements for employers to bar employees who appeared to be sick from coming to work or to offer work from home options. Executive Order 202 declared a state of emergency, but it said nothing of what precautions employers should be taking. See Dkt No. 95-8; N.Y. Exec. Order 202 (March 7, 2020), available at https://www.governor.ny.gov/news/no-202-declaring-disaster-emergency-state-new-york. Executive Order 202.4 was directed to local governments and political subdivisions. It required “[a]ny local government or political subdivision …, effective March 17, 2020, [to] allow non-essential personnel … to be able to work from home or take leave without charging accruals.” N.Y. Exec. Order 202.4 (March 16, 2020), available at https://www.governor.ny.gov/news/no-2024-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency. The Executive Order was not addressed to private employers and did not require such employers to offer a work from home option or make it illegal for them to permit employees with flu-like symptoms to come into work. …

The guidance of the NYCDH and CDC to which Delaney points also are not laws, rules, or regulations the violation of which can give rise to a New York whistleblower claim. For an activity, policy, or practice to come within the ambit of Section 740, it must “violat[e] … a law, rule or regulation.” N.Y. Lab. L. § 740(2)(a). Section 740(1)(c) defines “law, rule or regulation” to “include[e] any duly enacted statute or ordinance or any rule or regulation promulgated pursuant to any federal, state or local statute or ordinance.” N.Y. Lab. L. § 740(1)(c).

[Citations omitted.]

The court continued its analysis, noting, inter alia, that Delaney’s “complaint does not allege that Delaney made a complaint about a violation of the New York Labor Laws or an order of the Commissioner of Labor.”

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