Opinion ID: 1194597
Heading Depth: 4
Heading Rank: 2

Heading: Does the Section 741 Claim Fall Within the Waiver's Scope?

Text: The two clauses of section 740(7) would seem potentially to contradict each other  the first assuring that [n]othing in this section shall be deemed to diminish the rights . . . or remedies of any employee under any other law and the second excepting that the institution of an action in accordance with this section shall be deemed a waiver of the rights and remedies available under any other . . . law. N.Y. Lab. Law § 740(7). As one federal district court has put it, [o]n a plain reading of Clause Two, New York's whistleblower regime not only `diminish[es]' other rights, but for employees who seek its shelter, it eviscerates them. Collette v. St. Luke's Roosevelt Hosp., 132 F.Supp.2d 256, 262-63 (S.D.N.Y.2001) (second alteration in original). Responding to this apparent incongruity, courts have adopted differing and sometimes contradictory limiting constructions of this waiver. New York state courts have generally held that the waiver applies to all causes of action that relate to the retaliatory discharge, which may include contract claims, see Hayes, 834 N.Y.S.2d at 275; Bordan v. N. Shore Univ. Hosp., 275 A.D.2d 335, 712 N.Y.S.2d 155, 157 (App.Div.2000), tort claims, see Pipas v. Syracuse Home Ass'n, 226 A.D.2d 1097, 641 N.Y.S.2d 768, 768 (App.Div. 1996), and claims arising under state antidiscrimination laws, see Owitz v. Beth Isr. Med. Ctr., No. 600331/03, 2004 WL 258087, at  (N.Y.Sup.Ct. Jan.29, 2004). Federal district courts, in contrast, generally interpret the waiver as applying only to rights and remedies concerning whistleblowing, Collette, 132 F.Supp.2d at 274; see also Reddington, 373 F.Supp.2d at 185-86; Nicholls, 2004 WL 1533831, at , and therefore deem it not to apply, for example, to claims of employment discrimination. Collette, 132 F.Supp.2d at 274. Additionally, federal courts have interpreted the provision not to waive or otherwise affect rights arising under federal law. Id. at 266; Nicholls, 2004 WL 1533831, at ; United States ex rel. Mikes v. Straus, 853 F.Supp. 115, 121 (S.D.N.Y.1994). Whatever the proper scope of the section 740 waiver, there is an additional consideration here related to the district court's conclusion that a claim under section 741 falls within it. The waiver, by its terms, relates to rights and remedies available under any other . . . law. N.Y. Lab. Law § 740(7) (emphasis added). Although section 741, the health care whistleblower provision, provides a set of rights distinct from the rights created by section 740, the general whistleblower law, an employee aggrieved by a violation of section 741 can enforce his or her rights only in accordance with the remedial provisions of section 740. See id. §§ 740(4)(d), 741(4). It therefore seems arguable that section 740's waiver cannot affect rights created by section 741 because the associated remedies are available under the same law, not any other law. The logic of Pipia supports this reading. As discussed earlier, the court in Pipia dismissed claims related to an alleged retaliatory termination because they were waived by the institution of a section 740 action, even though the plaintiff withdrew the section 740 claim and replaced it with a section 741 claim. As an alternative ground for this disposition, the court stated that dismissal of the [related] causes of action would have been required even if the plaintiff's [section 741 claim] had been pleaded initially. Pipia, 826 N.Y.S.2d at 320. According to the court, [b]ecause a claim alleging a violation of Labor Law § 741(2) is enforced pursuant to Labor Law § 740(4)(d), the same waiver is effected by the institution of a cause of action alleging a violation of Labor Law § 741(2). Id. (citation omitted). Pursuant to this logic, because the waiver is triggered by the institution of an action in accordance with this section  namely, section 740  a claim under section 741 is, by necessary implication, an action in accordance with section 740 as well.