A company’s “squeaky wheel” triumphs: (new!) protection from retaliation under the Fair Labor Standards Act

Minor v. Bostwick Laboratories, Inc., No. 10-1258 (4th Cir. Jan. 27, 2012), available at http://pacer.ca4.uscourts.gov/opinion.pdf/101258.P.pdf. Ms. Minor began working at Bostwick Laboratories, Inc. (here, “Bostwick”) as a medical technologist on December 24, 2007. On May 6, 2008, she and several colleagues met with Bostwick’s chief operating officer, Bill Miller, and told him that their supervisor had altered time sheets as to eliminate overtime pay, a violation of the Fair Labor Standards Act (“FLSA”). Miller said that he would look into the allegations.

The following Monday, Bostwick terminated Ms. Minor’s employment. Miller and an HR manager stated that the reason for Ms. Minor’s termination was that she was having too much conflict with her supervisors and that they had met with her co-workers and determined that Minor was the problem. In essence, Ms. Minor endured the workplace equivalent of Mean Girls: when she threatened the status of her superiors she was evicted from the group, ostensibly because no one liked her. In fact, Minor had never had any conflict with her supervisors, the alleged meeting between Miller and Minor’s co-workers never took place, and the circumstances suggest that she was terminated because she complained about her supervisor’s FLSA violation.

Ms. Minor filed a complaint against Bostwick in the United States District Court for the Eastern District of Virginia alleging, among other things, that Bostwick terminated her employment in retaliation for her engaging in protected activity. Bostwick filed a motion to dismiss on July 6 alleging that Ms. Minor’s informal, intra-company complaint regarding possible FLSA violations by her employer did not qualify as protected activity under the FLSA. To clarify, only employees who engage in “protected activity” are protected by the FLSA’s anti-retaliation provisions, so if Ms. Minor’s complaint to Miller was not “protected activity” then she could not win her retaliation suit and it would be dismissed.

The district court agreed with Bostwick and dismissed Ms. Minor’s case. Ms. Minor appealed to the Fourth Circuit Court of Appeals and asked that court to decide whether intra-company complaints, as opposed to complaints to the Department of Labor (DOL) or Equal Employment Opportunity Commission (EEOC), for example, could lead to protection under the FLSA’s anti-retaliation provision.

In the time between the district court’s opinion and the Fourth Circuit’s review, the United States Supreme Court decided Kasten v. Saint-Gobain Performance Plastics Corp., which is covered on our blog here. Though Kasten seems very similar to Ms. Minor’s case, the Fourth Circuit differentiated the two by identifying the key issue of Kasten as being whether the complaint could be “filed” if it were oral rather than written, and the key issue of Ms. Minor’s case being whether the complaint could be “filed” intra-company rather than with another organization.

In Kasten the Supreme Court also emphasized that the employer must have fair notice that a complaint has been filed. In defining fair notice it emphasized that a “reasonable employer” would understand a complaint providing such notice to be an assertion of rights under the FLSA. The Kasten dissent argued that requiring fair notice to the employer meant the Court was allowing for intra-company complaints to constitute protected activity under the FLSA—the very issue to be decided in Ms. Minor’s case—but the majority expressly declined to address that issue.

 In deciding whether Ms. Minor’s intra-company complaint could constitute protected activity under the FLSA, the Court reviewed the language of the statute. The anti-retaliation provision of the FLSA makes it unlawful for a covered employer such as Bostwick to “discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding.”

 The Fourth Circuit ultimately followed the Kasten court in holding that, although the anti-retaliation language of the FLSA is ambiguous, the remedial purpose of the statute requires that it protect intra-company complaints such as Ms. Minor’s. The court noted that if the statute did not protect such complaints, it would encourage employers to fire employees who made intra-company reports of labor violations in an effort to prevent them from making formal complaints to outside organizations such as the DOL. It also noted that the Secretary of Labor and the EEOC have consistently held that intra-company complaints are included within the meaning of “filed any complaint.” Finally, like in Kasten, here the court also emphasized the need for “fair notice” to employers. The court decided that the official meeting with an executive level employee, leading to that executive’s promise to investigate, put Bostwick on sufficient notice of Ms. Minor’s complaint.

 This case solidifies the law of the Fourth Circuit regarding intra-company FLSA complaints. Like Kasten, this case should serve as notice to employers that they cannot terminate an employee who reports a potential FLSA violation for making that report, and it also emphasizes that employees must do more than “letting off steam” for their complaint to render them protected from retaliation under the FLSA.

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