From Compliance to Consequences: Retaliation in the C-Suite

Whistleblower Protection Laws in New York and New Jersey

C-suite executives and other high-level employees have intimate knowledge of a company’s inner workings, including potential compliance practices, which makes these employees particularly vulnerable to whistleblower retaliation.  Many professionals who raise concerns about corporate misconduct such as financial fraud, patient safety, or regulatory compliance issues believe that their companies will protect them and responsibly address their concerns.  However, whistleblowers are often pushed out, sidelined, or targeted after lodging their complaints.

That is where a lawyer may step in.  New York and New Jersey have comprehensive laws protecting whistleblowers, which may be utilized by employees who have been terminated or otherwise retaliated against by their employer.

“Whistleblower” Complaints

Employees who push back on, or complain about policies or practices of their employer that they reasonably believe are in violation of a law, rule, or regulation, may be protected if they are retaliated against after reporting these issues to a supervisor. Below are a few examples of practices, which may be considered a “protected” whistleblower complaint.

• Financial fraud
• SEC violations
• Breach of fiduciary duties
• Defrauding the government
• Unsafe working conditions
• Discrimination or harassment
• Regulatory violations
• Public health or patient safety risks
• HIPAA compliance issues
• Ethical breaches

What Does Retaliation Look Like?

The most obvious form of retaliation is when an employee is terminated soon after they raise concerns regarding misconduct.  However, in white collar and executive roles, retaliation is rarely overt.  Employers know that it is risky to terminate an employee after they have complained about misconduct.  Accordingly, employers typically retaliate against employees in more subtle ways:

• Negative performance reviews after years of positive feedback
• Loss of clients or projects
• Demotions
• Pay cuts
• Reorganization
• Sudden disciplinary action
• Exclusion from meetings or key decisions
• Pressure to resign

Retaliation can feel confusing, and it becomes deeply personal when an employer begins to criticize an employee’s work in a way that could jeopardize their career.  Luckily, employees have options if they are being retaliated against.

New York Labor Law Section 740

The New York whistleblower statute (NYLL § 740) was amended in January 2022 to add more protections for employees.  The statute now covers any whistleblower who is retaliated against after:

• Reporting or threatening to report conduct they reasonably believe violates any law, rule, or regulation, or that the employee reasonably believes poses a substantial and specific danger to the public health or safety; or
• Objecting to or refusing to participate in conduct they reasonably believe violates any law, rule, or regulation, or that the employee reasonably believes poses a substantial and specific danger to the public health or safety.

This law applies so long as the employee had a reasonable belief that something unlawful or dangerous was occurring, which they reported or objected to.  And importantly, the law covers retaliation in all forms.

Conscientious Employee Protection Act (CEPA): One of the Nation’s Strongest Whistleblower Laws

For employees working or living in New Jersey, CEPA offers even broader protections than the New York statute.  CEPA prohibits retaliation against employees who:

• Disclose or threaten to disclose employer actions they reasonably believe are illegal, fraudulent, or criminal
• Object to or refuse to participate in such actions
• Report concerns internally or externally (e.g., to a supervisor, regulatory agency, etc.)

CEPA has been used by executives, doctors, finance professionals, and countless other employees after they faced discipline from their employer for speaking up about unethical or unlawful behavior.

How to Protect Yourself if You Are Being Retaliated Against

Retaliation often escalates, and what starts with exclusion or subtle sabotage can lead to termination, loss of professional credibility, and long-term career harm.  In the worst-case scenario, employees may fear being blacklisted by an industry after raising concerns.

If you suspect you’re being retaliated against for raising concerns to your employer, speak with an attorney as soon as possible. The law is on your side—but timing, documentation, and strategy matter.  A lawyer may protect you from further retaliation and work to mitigate any reputational harm.