senate Bill S4453A

2013-2014 Legislative Session

Prohibits employer retaliation against employees in the financial services industry

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

do you support this bill?

Actions

view actions (11)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 20, 2014 committed to rules
Jun 16, 2014 amended on third reading 4453a
Mar 05, 2014 advanced to third reading
Mar 04, 2014 2nd report cal.
Mar 03, 2014 1st report cal.220
Jan 08, 2014 referred to labor
Jun 21, 2013 committed to rules
Jun 05, 2013 advanced to third reading
Jun 04, 2013 2nd report cal.
Jun 03, 2013 1st report cal.952
Apr 03, 2013 referred to labor

Bill Amendments

Original
A (Active)
Original
A (Active)

S4453 - Bill Details

See Assembly Version of this Bill:
A815A
Current Committee:
Senate Rules
Law Section:
Labor Law
Laws Affected:
Amd §740, Lab L

S4453 - Bill Texts

view summary

Prohibits employer retaliation against employees in the financial services industry.

view sponsor memo
BILL NUMBER:S4453

TITLE OF BILL: An act to amend the labor law, in relation to
prohibiting employer retaliation against employees in the financial
services industry

PURPOSE OR GENERAL IDEA OF BILL:

To prohibit employer retaliation against employees in the financial
services industry who report violations of laws, rules or regulations
to a supervisor or to a public body.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 740(1) of the labor law by adding a new
paragraph (h) to define "Financial institution' to mean:

(1) an insured bank;

(2) a commercial bank or trust company;

(3) a private banker;

(A) an agency or branch of a foreign bank in the United States;

(5) any credit union; a thrift institution;

(6) a broker or dealer registered with the Securities and Exchange
Commission;

(7) a broker or dealer in securities or commodities;

(8) an investment banker or investment company;

(9) a currency exchange;

(10) an issuer, redeemer, or cashier of traveler's checks, checks,
money orders, or similar instrument's;

(11) an operator of a credit card system;

(12) an insurance company;

(13) a dealer in precious metals, stones, or jewels;

(14) a pawnbroker;

(15) a loan or finance company;

(16) a travel agency;

(17) a licensed sender of money or any other person who engages as a
business in the transmission of funds;

(19) a telegraph company;

(19) a business engaged in vehicle sales;


(20) persons involved in real estate closings and settlements;

(21) the Unites States Postal Service;

(22) an agency of the United States government or of a state or local
government carrying out a duty or Power of a business described in
this paragraph;

(23) an Indian casino, or other gaming operation;

(24)any business or agency which engages in any activity which the
superintendent of the department of financial services determines to
be an activity which is similar to, related to, or a substitute for
any activity in which any business described in this paragraph is
authorized to engage;

(25) or any other business designated by the superintendent whose cash
transactions have a high degree of usefulness in criminal, tax, or
regu- latory matters.

Section 2 amends section 740(2)(a) of the labor law, as amended by
chapter 442 of the laws of 2006, to prohibit an employer from taking
any retaliatory personnel action against an employee who 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 constitutes a violation of the federal or state
securities laws, financial or accounting fraud, or misappropriation or
misuse of funds of a financial institution, a hedge fund or private
equity firm, or of the clients or customers of such organizations; or
which constitutes bribery of a public official.

Section 3 is the effective date.

JUSTIFICATION:

In the wake of the financial crisis caused by fraudulent financial
schemes, it is in the interest of the state to encourage employees of
financial institutions to report illegal and unethical behavior to a
supervisor or to a public body.

Current law only protects employees who report illegal behavior which
creates and presents a substantial and specific danger to the public
health or safety.

This law will protect employees who report or threaten to report
illegal behavior in financial institutions and actions that constitute
bribery of a public official.

The need for this legislation is highlighted by the May 2012 New York
Court of Appeals decision in Sullivan v Harnisch. The majority of the
Court rejected a wrongful discharge case brought by a compliance
officer claiming that he was terminated for questioning the personal
stock trades of the company's president and ruled that current law did
not prohibit such discharge. In his dissenting opinion, the Court's
Chief Judge said that the majority's decision created, "A great
Potential for abuse in the financial services industry," which would
need to be solved by legislation.


This law addresses that need by protecting employees in the financial
services industry who report illegal behavior from retaliation,
including retaliatory termination.

Without the efforts of employees willing to report and prevent illegal
and unethical behavior, such behavior can continue until discovered
and acted upon by a third party outside the company.

According to a United States Senate report, whistleblower tips
identified 54.1%. of uncovered fraud schemes in public companies,
while external auditors, including the Security and Exchange
Commission, detected only 4.1% of uncovered fraud schemes.

As further stated in the Chief Judge's dissenting opinion, "These
protections must exist not only to decrease the likelihood that the
employees will succumb to pressures to ignore or violate their
obligations for fear of termination, but also to protect the public."

LEGISLATIVE HISTORY:

None.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

The act shall take effect immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4453

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 3, 2013
                               ___________

Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Labor

AN ACT to amend the labor  law,  in  relation  to  prohibiting  employer
  retaliation against employees in the financial services industry

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

  Section 1. Subdivision 1 of section 740 of the labor law is amended by
adding a new paragraph (h) to read as follows:
  (H) "FINANCIAL INSTITUTION" MEANS:
  (I) AN INSURED BANK (AS DEFINED IN SECTION 3(H) OF THE FEDERAL DEPOSIT
INSURANCE ACT (12 U.S.C. 1813(H))), OR A BANK  CHARTERED  BY  ANY  STATE
WHICH CONDUCTS BUSINESS IN THE STATE OF NEW YORK;
  (II) A COMMERCIAL BANK OR TRUST COMPANY;
  (III) A PRIVATE BANKER;
  (IV) AN AGENCY OR BRANCH OF A FOREIGN BANK IN THE UNITED STATES;
  (V) ANY CREDIT UNION;
  (VI) A THRIFT INSTITUTION;
  (VII)  A  BROKER OR DEALER REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934 (15 U.S.C.  78A  ET
SEQ.);
  (VIII) A BROKER OR DEALER IN SECURITIES OR COMMODITIES;
  (IX) AN INVESTMENT BANKER OR INVESTMENT COMPANY;
  (X) A CURRENCY EXCHANGE;
  (XI)  AN  ISSUER,  REDEEMER,  OR CASHIER OF TRAVELER'S CHECKS, CHECKS,
MONEY ORDERS, OR SIMILAR INSTRUMENTS;
  (XII) AN OPERATOR OF A CREDIT CARD SYSTEM;
  (XIII) AN INSURANCE COMPANY;
  (XIV) A DEALER IN PRECIOUS METALS, STONES, OR JEWELS;
  (XV) A PAWNBROKER;
  (XVI) A LOAN OR FINANCE COMPANY;
  (XVII) A TRAVEL AGENCY;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05424-01-3

S. 4453                             2

  (XVIII) A LICENSED SENDER OF MONEY OR ANY OTHER PERSON WHO ENGAGES  AS
A  BUSINESS  IN  THE  TRANSMISSION  OF  FUNDS,  INCLUDING ANY PERSON WHO
ENGAGES AS A BUSINESS IN  AN  INFORMAL  MONEY  TRANSFER  SYSTEM  OR  ANY
NETWORK  OF PEOPLE WHO ENGAGE IN A BUSINESS IN FACILITATING THE TRANSFER
OF  MONEY  DOMESTICALLY  OR  INTERNATIONALLY OUTSIDE OF THE CONVENTIONAL
FINANCIAL INSTITUTIONS SYSTEM;
  (XIX) A TELEGRAPH COMPANY;
  (XX) A  BUSINESS  ENGAGED  IN  VEHICLE  SALES,  INCLUDING  AUTOMOBILE,
AIRPLANE, AND BOAT SALES;
  (XXI) PERSONS INVOLVED IN REAL ESTATE CLOSINGS AND SETTLEMENTS;
  (XXII) THE UNITED STATES POSTAL SERVICE;
  (XXIII)  AN  AGENCY  OF  THE UNITED STATES GOVERNMENT OR OF A STATE OR
LOCAL GOVERNMENT CARRYING OUT A DUTY OR POWER OF A BUSINESS DESCRIBED IN
THIS PARAGRAPH;
  (XXIV) AN INDIAN CASINO OR OTHER GAMING OPERATION;
  (XXV) ANY BUSINESS OR AGENCY WHICH ENGAGES IN ANY ACTIVITY  WHICH  THE
SUPERINTENDENT  OF  THE  DEPARTMENT OF FINANCIAL SERVICES DETERMINES, BY
REGULATION, TO BE AN ACTIVITY WHICH IS SIMILAR  TO,  RELATED  TO,  OR  A
SUBSTITUTE  FOR  ANY  ACTIVITY  IN  WHICH ANY BUSINESS DESCRIBED IN THIS
PARAGRAPH IS AUTHORIZED TO ENGAGE; OR
  (XXVI) ANY OTHER BUSINESS DESIGNATED  BY  THE  SUPERINTENDENT  OF  THE
DEPARTMENT  OF  FINANCIAL  SERVICES  WHOSE CASH TRANSACTIONS HAVE A HIGH
DEGREE OF USEFULNESS IN CRIMINAL, TAX, OR REGULATORY MATTERS.
  S 2. Paragraph (a) of subdivision 2 of section 740 of the  labor  law,
as  amended  by  chapter  442 of the laws of 2006, is amended to read as
follows:
  (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 (I) which violation creates and
presents a substantial and specific danger to the public health or safe-
ty[, or]; (II) which constitutes health care fraud; (III) WHICH  CONSTI-
TUTES  A VIOLATION OF THE FEDERAL OR STATE SECURITIES LAWS, FINANCIAL OR
ACCOUNTING FRAUD, OR MISAPPROPRIATION OR MISUSE OF THE FUNDS OF A FINAN-
CIAL INSTITUTION, A HEDGE FUND OR PRIVATE EQUITY FIRM, OR OF THE CLIENTS
OR CUSTOMERS OF SUCH ORGANIZATIONS; OR (IV) WHICH CONSTITUTES BRIBERY OF
A PUBLIC OFFICIAL;
  S 3. This act shall take effect immediately.

S4453A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A815A
Current Committee:
Senate Rules
Law Section:
Labor Law
Laws Affected:
Amd §740, Lab L

S4453A (ACTIVE) - Bill Texts

view summary

Prohibits employer retaliation against employees in the financial services industry.

view sponsor memo
BILL NUMBER:S4453A

TITLE OF BILL: An act to amend the labor law, in relation to
prohibiting employer retaliation against employees in the financial
services industry

PURPOSE OR GENERAL IDEA OF BILL: To prohibit employer retaliation
against employees in the financial services industry who report
violations of laws, rules or regulations to a supervisor or to a
public body.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 740(1) of the labor law by adding a new
paragraph (h) to define "Financial institution' to mean:

(1) an insured bank;

(2) a commercial bank or trust company;

(3) a private banker;

(A) an agency or branch of a foreign bank in the United States;

(5) any credit union; a thrift institution;

(6) a broker or dealer registered with the Securities and Exchange
Commission;

(7) a broker or dealer in securities or commodities;

(8) an investment banker or investment company;

(9) a currency exchange;

(10) an issuer, redeemer, or cashier of traveler's checks, checks,
money orders, or similar instrument's;

(11) an operator of a credit card system;

(12) an insurance company;

(13) a dealer in precious metals, stones, or jewels;

(14) a pawnbroker;

(15) a loan or finance company;

(16) a travel agency;

(17) a licensed sender of money or any other person who engages as a
business in the transmission of funds;

(19) a telegraph company;

(19) a business engaged in vehicle sales;


(20) persons involved in real estate closings and settlements;

(21) the Unites States Postal Service;

(22) an agency of the United States government or of a state or local
government carrying out a duty or Power of a business described in
this paragraph;

(23) an Indian casino, or other gaming operation;

(24)any business or agency which engages in any activity which the
superintendent of the department of financial services determines to
be an activity which is similar to, related to, or a substitute for
any activity in which any business described in this paragraph is
authorized to engage;

(25) or any other business designated by the superintendent whose cash
transactions have a high degree of usefulness in criminal, tax, or
regulatory matters.

Section 2 amends section 740(2)(a) of the labor law, as amended by
chapter 442 of the laws of 2006, to prohibit an employer from taking
any retaliatory personnel action against an employee who 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 constitutes a violation of the federal or state
securities laws, financial or accounting fraud, or misappropriation or
misuse of funds of a financial institution, a hedge fund or private
equity firm, or of the clients or customers of such organizations.

Section 3 is the effective date.

JUSTIFICATION: In the wake of the financial crisis caused by
fraudulent financial schemes, it is in the interest of the state to
encourage employees of financial institutions to report illegal and
unethical behavior to a supervisor or to a public body.

Current law only protects employees who report illegal behavior which
creates and presents a substantial and specific danger to the public
health or safety.

This law will protect employees who report or threaten to report
illegal behavior in financial institutions and actions that constitute
bribery of a public official.

The need for this legislation is highlighted by the May 2012 New York
Court of Appeals decision in Sullivan v Harnisch. The majority of the
Court rejected a wrongful discharge case brought by a compliance
officer claiming that he was terminated for questioning the personal
stock trades of the company's president and ruled that current law did
not prohibit such discharge. In his dissenting opinion, the Court's
Chief Judge said that the majority's decision created, "A great
Potential for abuse in the financial services industry," which would
need to be solved by legislation.


This law addresses that need by protecting employees in the financial
services industry who report illegal behavior from retaliation,
including retaliatory termination.

Without the efforts of employees willing to report and prevent illegal
and unethical behavior, such behavior can continue until discovered
and acted upon by a third party outside the company.

According to a United States Senate report, whistleblower tips
identified 54.1%. of uncovered fraud schemes in public companies,
while external auditors, including the Security and Exchange
Commission, detected only 4.1% of uncovered fraud schemes.

As further stated in the Chief Judge's dissenting opinion, "These
protections must exist not only to decrease the likelihood that the
employees will succumb to pressures to ignore or violate their
obligations for fear of termination, but also to protect the public."

LEGISLATIVE HISTORY: None.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: The act shall take effect immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4453--A
    Cal. No. 220

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 3, 2013
                               ___________

Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Labor  --  recommitted  to
  the  Committee  on  Labor  in accordance with Senate Rule 6, sec. 8 --
  reported favorably from said committee, ordered to  first  and  second
  report,  ordered  to  a  third reading, amended and ordered reprinted,
  retaining its place in the order of third reading

AN ACT to amend the labor  law,  in  relation  to  prohibiting  employer
  retaliation against employees in the financial services industry

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

  Section 1. Subdivision 1 of section 740 of the labor law is amended by
adding a new paragraph (h) to read as follows:
  (H) "FINANCIAL INSTITUTION" MEANS:
  (I) AN INSURED BANK (AS DEFINED IN SECTION 3(H) OF THE FEDERAL DEPOSIT
INSURANCE ACT (12 U.S.C. 1813(H))), OR A BANK  CHARTERED  BY  ANY  STATE
WHICH CONDUCTS BUSINESS IN THE STATE OF NEW YORK;
  (II) A COMMERCIAL BANK OR TRUST COMPANY;
  (III) A PRIVATE BANKER;
  (IV) AN AGENCY OR BRANCH OF A FOREIGN BANK IN THE UNITED STATES;
  (V) ANY CREDIT UNION;
  (VI) A THRIFT INSTITUTION;
  (VII)  A  BROKER OR DEALER REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934 (15 U.S.C.  78A  ET
SEQ.);
  (VIII) A BROKER OR DEALER IN SECURITIES OR COMMODITIES;
  (IX) AN INVESTMENT BANKER OR INVESTMENT COMPANY;
  (X) A CURRENCY EXCHANGE;
  (XI)  AN  ISSUER,  REDEEMER,  OR CASHIER OF TRAVELER'S CHECKS, CHECKS,
MONEY ORDERS, OR SIMILAR INSTRUMENTS;
  (XII) AN OPERATOR OF A CREDIT CARD SYSTEM;
  (XIII) AN INSURANCE COMPANY;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05424-05-4

S. 4453--A                          2

  (XIV) A DEALER IN PRECIOUS METALS, STONES, OR JEWELS;
  (XV) A PAWNBROKER;
  (XVI) A LOAN OR FINANCE COMPANY;
  (XVII) A TRAVEL AGENCY;
  (XVIII)  A LICENSED SENDER OF MONEY OR ANY OTHER PERSON WHO ENGAGES AS
A BUSINESS IN THE  TRANSMISSION  OF  FUNDS,  INCLUDING  ANY  PERSON  WHO
ENGAGES  AS  A  BUSINESS  IN  AN  INFORMAL  MONEY TRANSFER SYSTEM OR ANY
NETWORK OF PEOPLE WHO ENGAGE IN A BUSINESS IN FACILITATING THE  TRANSFER
OF  MONEY  DOMESTICALLY  OR  INTERNATIONALLY OUTSIDE OF THE CONVENTIONAL
FINANCIAL INSTITUTIONS SYSTEM;
  (XIX) A TELEGRAPH COMPANY;
  (XX) A  BUSINESS  ENGAGED  IN  VEHICLE  SALES,  INCLUDING  AUTOMOBILE,
AIRPLANE, AND BOAT SALES;
  (XXI) PERSONS INVOLVED IN REAL ESTATE CLOSINGS AND SETTLEMENTS;
  (XXII) THE UNITED STATES POSTAL SERVICE;
  (XXIII)  AN  AGENCY  OF  THE UNITED STATES GOVERNMENT OR OF A STATE OR
LOCAL GOVERNMENT CARRYING OUT A DUTY OR POWER OF A BUSINESS DESCRIBED IN
THIS PARAGRAPH;
  (XXIV) AN INDIAN CASINO OR OTHER GAMING OPERATION;
  (XXV) ANY BUSINESS OR AGENCY WHICH ENGAGES IN ANY ACTIVITY  WHICH  THE
SUPERINTENDENT  OF  THE  DEPARTMENT OF FINANCIAL SERVICES DETERMINES, BY
REGULATION, TO BE AN ACTIVITY WHICH IS SIMILAR  TO,  RELATED  TO,  OR  A
SUBSTITUTE  FOR  ANY  ACTIVITY  IN  WHICH ANY BUSINESS DESCRIBED IN THIS
PARAGRAPH IS AUTHORIZED TO ENGAGE; OR
  (XXVI) ANY OTHER BUSINESS DESIGNATED  BY  THE  SUPERINTENDENT  OF  THE
DEPARTMENT  OF  FINANCIAL  SERVICES  WHOSE CASH TRANSACTIONS HAVE A HIGH
DEGREE OF USEFULNESS IN CRIMINAL, TAX, OR REGULATORY MATTERS.
  S 2. Paragraph (a) of subdivision 2 of section 740 of the  labor  law,
as  amended  by  chapter  442 of the laws of 2006, is amended to read as
follows:
  (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 (I) which violation creates and
presents a substantial and specific danger to the public health or safe-
ty[, or]; (II) which constitutes  health  care  fraud;  OR  (III)  WHICH
CONSTITUTES  A VIOLATION OF THE FEDERAL OR STATE SECURITIES LAWS, FINAN-
CIAL OR ACCOUNTING FRAUD, OR MISAPPROPRIATION OR MISUSE OF THE FUNDS  OF
A  FINANCIAL INSTITUTION, A HEDGE FUND OR PRIVATE EQUITY FIRM, OR OF THE
CLIENTS OR CUSTOMERS OF SUCH ORGANIZATIONS;
  S 3. This act shall take effect immediately.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.