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Current Developments in the Commercial Divisions of the
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Posted: December 2, 2015

Whistleblower Claims Fail Because Complaints Unrelated to Actual Violations of Law or Regulation

On November 25, 2015, the Second Department issued a decision in Kamdem-Ouaffo v. Pepsico, Inc., 2015 NY Slip Op. 08712, holding that a whistleblower claim must involve complaints of actual, not suspected, violations of law or regulation.

In Kamdem-Ouaffo, the plaintiff brought “an action, inter alia, to recover damages for alleged violations of Labor Law § 740.” The IAS court dismissed the Section 740 (whistleblower) claim. The Second Department affirmed, explaining:

Labor Law § 740, commonly known as the “whistleblower statute,” prohibits an employer from taking any retaliatory personnel action against an employee because such employee 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 or objects to, or refuses to participate in any such activity, policy or practice in violation of a law, rule or regulation. In order to recover under Labor Law § 740, a plaintiff must establish that an actual violation of law or regulation occurred; a plaintiff’s reasonable belief that a violation occurred is insufficient.

Here, the defendant established its prima facie entitlement to judgment as a matter of law on the third and fourth causes of action asserted pursuant to the whistleblower statute by demonstrating that neither the plaintiff’s June 30, 2009, communication concerning alleged violations of the “Delaney Clause” of the Food, Drug and Cosmetic Act applicable to food additives, or his later communications concerning alleged violations of Occupational Safety and Health Administration (hereinafter OSHA) regulations, involved actual violations of law or regulation.

(Internal quotations and citations omitted) (emphasis added).

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