THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1 Section 1. The labor law is amended by adding a new article 21 to read as follows:

ARTICLE 21
WRONGFUL DISCHARGE
FROM EMPLOYMENT ACT

SECTION 760. SHORT TITLE.

761. PURPOSE.

762. DEFINITIONS.

763. ELEMENTS OF WRONGFUL DISCHARGE.

764. REMEDIES.

765. LIMITATION OF ACTIONS.

766. EXEMPTIONS.

S 760. SHORT TITLE. THIS ARTICLE MAY BE CITED AS THE "WRONGFUL DISCHARGE FROM EMPLOYMENT ACT".

S 761. PURPOSE. THIS ARTICLE SETS FORTH CERTAIN RIGHTS AND REMEDIES WITH RESPECT TO WRONGFUL DISCHARGE. EXCEPT AS LIMITED IN THIS ARTICLE, EMPLOYMENT HAVING NO SPECIFIED TERM MAY BE TERMINATED AT THE WILL OF EITHER THE EMPLOYER OR THE EMPLOYEE ON NOTICE TO THE OTHER FOR ANY REASON CONSIDERED SUFFICIENT BY THE TERMINATING PARTY. EXCEPT AS PROVIDED IN SECTION SEVEN HUNDRED SIXTY-SIX OF THIS ARTICLE, THIS ARTICLE PROVIDES THE EXCLUSIVE REMEDY FOR A WRONGFUL DISCHARGE FROM EMPLOYMENT.

EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets { } is old law to be omitted.

LBD05617-01-1

S. 1593 2

1. "CONSTRUCTIVE DISCHARGE" MEANS THE VOLUNTARY TERMINATION OF EMPLOYMENT BY AN EMPLOYEE BECAUSE OF A SITUATION CREATED BY AN ACT OR OMISSION OF THE EMPLOYER WHICH AN OBJECTIVE, REASONABLE PERSON WOULD FIND SO INTOLERABLE THAT VOLUNTARY TERMINATION IS THE ONLY REASONABLE ALTERNATIVE. CONSTRUCTIVE DISCHARGE DOES NOT MEAN VOLUNTARY TERMINATION BECAUSE OF AN EMPLOYER'S REFUSAL TO PROMOTE THE EMPLOYEE OR IMPROVE WAGES, RESPONSIBILITIES, OR OTHER TERMS AND CONDITIONS OF EMPLOYMENT.

2. "DISCHARGE" INCLUDES A CONSTRUCTIVE DISCHARGE AND ANY OTHER TERMINATION OF EMPLOYMENT, INCLUDING RESIGNATION, ELIMINATION OF THE JOB, LAYOFF FOR LACK OF WORK, FAILURE TO RECALL OR REHIRE, AND ANY OTHER CUTBACK IN THE NUMBER OF EMPLOYEES FOR A LEGITIMATE BUSINESS REASON.

3. "EMPLOYEE" MEANS A PERSON WHO WORKS FOR ANOTHER FOR HIRE. THE TERM DOES NOT INCLUDE A PERSON WHO IS AN INDEPENDENT CONTRACTOR.

4. "FRINGE BENEFITS" MEANS THE VALUE OF ANY EMPLOYER-PAID VACATION LEAVE, SICK LEAVE, MEDICAL INSURANCE PLAN, DISABILITY INSURANCE PLAN, LIFE INSURANCE PLAN, AND PENSION BENEFIT PLAN IN FORCE ON THE DATE OF THE TERMINATION OR ANY OTHER BENEFITS PROVIDED TO EMPLOYEES.

5. "GOOD CAUSE" MEANS REASONABLE JOB-RELATED GROUNDS FOR DISMISSAL BASED ON A FAILURE TO SATISFACTORILY PERFORM JOB DUTIES, DISRUPTION OF THE EMPLOYER'S OPERATION, OR OTHER LEGITIMATE BUSINESS REASON BUT SHALL NOT INCLUDE ACTIVITIES PROTECTED UNDER SECTION TWO HUNDRED ONE-D OF THIS CHAPTER.

6. "LOST WAGES" MEANS THE GROSS AMOUNT OF WAGES THAT WOULD HAVE BEEN REPORTED TO THE INTERNAL REVENUE SERVICE AS GROSS INCOME ON FORM W-2 AND INCLUDES ADDITIONAL COMPENSATION DEFERRED AT THE OPTION OF THE EMPLOYEE.

7. "PUBLIC POLICY" MEANS A POLICY IN EFFECT AT THE TIME OF THE DISCHARGE CONCERNING THE PUBLIC HEALTH, SAFETY, OR WELFARE ESTABLISHED BY CONSTITUTIONAL PROVISION, STATUTE, OR ADMINISTRATIVE RULE.

S 763. ELEMENTS OF WRONGFUL DISCHARGE. A DISCHARGE IS WRONGFUL ONLY IF:

1. IT WAS IN RETALIATION FOR THE EMPLOYEE'S REFUSAL TO VIOLATE PUBLIC POLICY, LAW, RULE OR REGULATION, OR FOR REPORTING A VIOLATION OF PUBLIC POLICY, LAW, RULE OR REGULATION;

2. THE DISCHARGE WAS NOT FOR GOOD CAUSE AND THE EMPLOYEE HAD COMPLETED THE EMPLOYER`S PROBATIONARY PERIOD OF EMPLOYMENT; OR

3. THE EMPLOYER VIOLATED THE EXPRESS PROVISIONS OF ITS OWN WRITTEN PERSONNEL POLICY.

S 764. REMEDIES. 1. IF AN EMPLOYER HAS COMMITTED A WRONGFUL DISCHARGE, THE EMPLOYEE MAY BE AWARDED LOST WAGES AND FRINGE BENEFITS, TOGETHER WITH INTEREST THEREON.

2. THE EMPLOYEE MAY RECOVER PUNITIVE DAMAGES OTHERWISE ALLOWED BY LAW IF IT IS ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE THAT THE EMPLOYER ENGAGED IN ACTUAL FRAUD OR ACTUAL MALICE IN THE DISCHARGE OF THE EMPLOYEE IN VIOLATION OF SUBDIVISION ONE OF SECTION SEVEN HUNDRED SIXTY-THREE OF THIS ARTICLE.

S 765. LIMITATION OF ACTIONS. 1. AN ACTION UNDER THIS ARTICLE MUST BE FILED WITHIN ONE YEAR AFTER THE DATE OF DISCHARGE.

2. IF AN EMPLOYER MAINTAINS WRITTEN INTERNAL PROCEDURES, OTHER THAN THOSE SPECIFIED IN SECTION SEVEN HUNDRED SIXTY-SIX OF THIS ARTICLE, UNDER WHICH AN EMPLOYEE MAY APPEAL A DISCHARGE WITHIN THE ORGANIZATIONAL STRUCTURE OF THE EMPLOYER, THE EMPLOYEE SHALL FIRST EXHAUST THOSE PROCEDURES PRIOR TO FILING AN ACTION UNDER THIS ARTICLE. THE EMPLOYEE'S FAILURE TO INITIATE OR EXHAUST AVAILABLE INTERNAL PROCEDURES IS A DEFENSE TO AN ACTION BROUGHT UNDER THIS ARTICLE. IF THE EMPLOYER'S INTERNAL PROCEDURES ARE NOT COMPLETED WITHIN NINETY DAYS FROM THE DATE THE EMPLOYEE INITIATES THE INTERNAL PROCEDURES, THE EMPLOYEE MAY FILE AN ACTION UNDER THIS ARTICLE AND FOR PURPOSES OF THIS SUBDIVISION THE EMPLOYER'S INTERNAL PROCEDURES ARE CONSIDERED EXHAUSTED. THE LIMITATION PERIOD IN SUBDIVISION ONE OF THIS SECTION IS TOLLED UNTIL THE PROCEDURES ARE EXHAUSTED.

3. IF THE EMPLOYER MAINTAINS WRITTEN INTERNAL PROCEDURES UNDER WHICH AN EMPLOYEE MAY APPEAL A DISCHARGE WITHIN THE ORGANIZATIONAL STRUCTURE OF THE EMPLOYER, THE EMPLOYER SHALL WITHIN SEVEN DAYS OF THE DATE OF THE DISCHARGE NOTIFY THE DISCHARGED EMPLOYEE OF THE EXISTENCE OF SUCH PROCEDURES AND SHALL SUPPLY THE DISCHARGED EMPLOYEE WITH A COPY OF THEM. IF THE EMPLOYER FAILS TO COMPLY WITH THIS SUBDIVISION, THE DISCHARGED EMPLOYEE NEED NOT COMPLY WITH SUBDIVISION TWO OF THIS SECTION.

S 766. EXEMPTIONS. THIS ARTICLE DOES NOT APPLY TO A DISCHARGE:

1. THAT IS SUBJECT TO ANY OTHER STATE OR FEDERAL STATUTE THAT PROVIDES A PROCEDURE OR REMEDY FOR CONTESTING THE DISPUTE. THE STATUTES INCLUDE THOSE THAT PROHIBIT DISCHARGE FOR FILING COMPLAINTS, CHARGES, OR CLAIMS WITH ADMINISTRATIVE BODIES OR THAT PROHIBIT UNLAWFUL DISCRIMINATION BASED ON RACE, NATIONAL ORIGIN, SEX, AGE, DISABILITY, CREED, RELIGION, POLITICAL BELIEF, COLOR, MARITAL STATUS, AND OTHER SIMILAR GROUNDS.

2. OF AN EMPLOYEE COVERED BY A WRITTEN COLLECTIVE BARGAINING AGREEMENT OR A WRITTEN CONTRACT OF EMPLOYMENT FOR A SPECIFIC TERM.

S 2. This act shall take effect 90 days after the date on which it shall have become a law.