Remba v. Federation Employment & Guidance Service

149 A.D.2d 131, 4 I.E.R. Cas. (BNA) 1137, 545 N.Y.S.2d 140, 1989 N.Y. App. Div. LEXIS 10871
CourtAppellate Division of the Supreme Court of the State of New York
DecidedAugust 17, 1989
StatusPublished
Cited by18 cases

This text of 149 A.D.2d 131 (Remba v. Federation Employment & Guidance Service) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Remba v. Federation Employment & Guidance Service, 149 A.D.2d 131, 4 I.E.R. Cas. (BNA) 1137, 545 N.Y.S.2d 140, 1989 N.Y. App. Div. LEXIS 10871 (N.Y. Ct. App. 1989).

Opinions

OPINION OF THE COURT

Sullivan, J. P.

Plaintiff was employed by Federation Employment and Guidance Service (FEGS), a not-for-profit agency, as a coordinator of employment services from February 23, 1987 until May 29, 1987 when, while still a probationer, her services were terminated for alleged unsatisfactory job performance. Eleven months later she commenced this action pursuant to Labor Law § 740 (2) (a) and (c) (Whistleblower Law), claiming [133]*133that she was discharged because of her objection to, and refusal to participate in, FEGS’s alleged fraudulent billing of the City of New York for placements it never made. FEGS finds employment for job applicants or places them in educational or training programs, for which it receives funding from the city.

FEGS moved, pursuant to CPLR 3211 (a) (7), to dismiss the complaint on the ground that it failed to satisfy the two elements which are conditions precedent to the maintenance of an action under the Whistleblower Law, i.e., to allege a law, rule or regulation allegedly violated by FEGS, and to demonstrate that the alleged violation would create and present a substantial and specific danger to the public health or safety. In opposition, plaintiff asserted that FEGS’s billing practices constituted a larceny (Penal Law § 155.05), and that section 740 (2) (c) of the Labor Law does not require a showing that the violation of law presents a substantial and specific danger to the public health and safety, or alternatively, that FEGS’s conduct does indeed present a substantial danger to the public health and safety.

The court denied the motion, finding that the complaint states a valid cause of action under the Labor Law, and suggesting that, after joinder of issue, FEGS, "if it deems it to be advisable, may move for summary judgment pursuant to CPLR 3212.” We are satisfied that the complaint meets the requirement of alleging a violation of law as it sets forth facts which, if established, would constitute the crime of larceny. We nevertheless reverse and dismiss since plaintiff has failed to set forth facts satisfying the statute’s other requirement, that the alleged violation of law, i.e., fraudulent billing, would create and present a substantial and specific danger to the public health or safety.

In pertinent part, section 740 of the Labor Law provides:

"2. * * * An employer shall not take any retaliatory personnel action against an employee because such employee does any of the following:

"(a) 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 * * *

"(c) objects to, or refuses to participate in any such activity, policy or practice in violation of a law, rule or regulation.”

[134]*134As is apparent from the plain words of the statute, not every disclosure, or threat of disclosure, by an employee of a practice in violation of a law, rule or regulation is protected by Labor Law § 740. The Legislature specifically provided that the statute’s protection extends to only those violations which create and present a "substantial and specific danger to the public health or safety”.

Although the phrase "substantial and specific danger to the public health or safety” is nowhere defined in Labor Law § 740, the comments contained in the Bill Jacket are revealing —"This bill would protect public and private sector employees who disclose violations of law, rule or regulation which present a substantial danger to public health or safety by prohibiting certain types of retaliatory action by their employers.” Also noted is the statute’s limited scope: "This bill protects public and private employees only in situations where disclosure of violations of law, rule or regulation would adversely affect public health and safety.” The Attorney-General’s memorandum also recognized the bill’s limited applicability: "The bill is intended to protect employees who disclose to governmental authorities information about, or refuse to engage in, employer wrongdoing which is dangerous, unsafe or inimical to the public welfare.”

Since, by its terms, the Whistleblower Law applies to relatively few situations, several proponents excepted to its narrow scope and urged broader application. (See, Bill Jacket, S 10074.) The Legislature, however, declined to do so. The Attorney-General’s memorandum provides examples of conduct that, in his opinion, would not come within the protection of the law:

"This bill, however, does not clearly protect all 'whistle blower’ employees. It is unclear whether the bill would, in all situations, provide a remedy for employees who refuse to engage in or who reveal illegal financial or accounting practices, such as filing false tax returns on the employer’s behalf. If we are ever to make a dent in the wide-spread abuses known as 'white collar’ crime, employees who disclose such illegal practices must be confident that they, too, will be protected. I urge that this defect in the bill be cured by future legislation.

"Nevertheless, this bill is a critical first step, and for the reasons stated, I urge its approval.” (Ibid.)

Indeed, if, as the Attorney-General indicates, white-collar crime is not covered, fraudulent billing would obviously be [135]*135beyond the statute’s purview. Thus, the Whistleblower Law should be viewed as a narrow and specific statutory exception to the employment-at-will doctrine. Any effort to expand its protections is properly for the Legislature, not the courts. (See, Murphy v American Home Prods. Corp., 58 NY2d 293, 301.)1

Moreover, even if plaintiff reasonably believed that the alleged fraudulent billing practice could create a substantial and specific danger to the public health or safety, such belief would not place her under the protection of Labor Law § 740. The law requires that there be not only an actual, as opposed to a possible, violation, but also an actual and substantial present danger to the public health. Reasonable belief as a basis for protection under Labor Law § 740 will not suffice. Indeed, prior to and since enactment of the law, bills have been introduced in the New York State Senate to broaden the statutory standard to one of reasonable cause. The Legislature, however, has consistently and repeatedly resisted any such change. (See, 1983 NY S 1153; 1987 NY S 1995, A 6485; see also, Kern v DePaul Mental Health Servs., 139 Misc 2d 970, 973.)2

Other whistleblower statutes have recognized the distinction between white-collar crimes and violations of law which present a substantial and specific danger to the public health and safety. (See, e.g., Ann Code of Md, art 64A, § 12G; see also, 5 USC § 2302 [b] [8] [A] [ii] [reprisal prohibited for disclosure of "mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety”]; 5 USC § 2303 [a] [2] [same]; 10 USC § 1587 [b] [1] [B]; [2] [B] [same]; 111 Ann Stat, ch 127, § 63bll9c.l [1] [ii] [same].)

Noting that Labor Law § 740 has separate provisions dealing with disclosure of unlawful activities (subd [2] [a]) and refusal to participate in unlawful activities (subd [2] [c]), [136]

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Bluebook (online)
149 A.D.2d 131, 4 I.E.R. Cas. (BNA) 1137, 545 N.Y.S.2d 140, 1989 N.Y. App. Div. LEXIS 10871, Counsel Stack Legal Research, https://law.counselstack.com/opinion/remba-v-federation-employment-guidance-service-nyappdiv-1989.