Demir v. Sandoz, Inc. ____A.D, 3d___(1st Dep't. Nov. 14, 2017), is an interesting decision for several reasons. First, the Appellate Division holds that a whistleblower states a claim under New York Labor Law Section 740 even if no violation of law is alleged. As the court states:
[P}laintiff adequately pleaded a Labor Law § 740 violation against defendants in alleging that its manufacturer and procurement of chemical ingredients for defendants' highest grossing product was not compliant with FDA regulatory requirements governing the drug's safety and efficacy, and she need not plead an actual violation of laws or regulations (see Webb—Weber v. Community Action for Human Servs., Inc., 23 NY3d 448 [2014]).
Next, the court held that by proceeding under Section 740, the plaintiff did not elect her remedies which would bar an employment discrimination claim:
The motion court correctly concluded that Labor Law § 740(7), the "election-of-remedies" provision, does not waive plaintiff's claim of discrimination under the New York State Human Rights Law (State HRL) (Executive Law § 296) because, in alleging discrimination on account of plaintiff's gender, national origin, and religion, plaintiff does not seek the same rights and remedies as she does in connection with her whistleblowing claim, notwithstanding that both claims allege that she was wrongfully terminated.
Finally, the court also held that the "relations back" doctrine applies to Section 740 cases and therefore, the case was not time-barred:
Although that claim was not asserted until the Second Amended Complaint, filed on October 19, 2015, more than one year after her termination on February 4, 2014, the original complaint, filed on January 31, 2015, alleged that on February 3, 2014, plaintiff reported to the defendants' Business Practices Office defendants' improper practices regarding its procurement of chemicals to manufacture its highest grossing drug, and that those practices did not comply with FDA regulations. It further alleged that she was terminated the next day in retaliation for that conduct. This sufficed to give defendants notice of the transactions or occurrences to be proved in asserting the Section 740 claim in the later Second Amended Complaint (see Giambrone v Kings Harbor Multicare Ctr., 104 AD3d 546 [1st Dept 2013]). Nor is there any basis or sound policy reason to deem the relation back doctrine inapplicable to such whistleblower claims. The right to sue an employer for an allegedly retaliatory discharge predates enactment of that statute and thus is not the kind of "statute of repose" to which the relation back doctrine does not apply (Goldstein v New York State Urban Dev. Corp., 13 NY3d 511, 521 [2009]), nor is the time limit "so incorporated with the remedy given as to make it an integral part of it and the condition precedent to the maintenance of the action at all."
Importantly, this case involved a motion to dismiss and involved legal standards which requires that complaints be liberally construed in favor of the plaintiff. That same standard would not apply later in the litigation. In order to prevail, it appears that under Webber, plaintiff would still have to prove an actual violation of law.