02.03.2012 Employer Beware: Informal Intra-Company Complaints Can Constitute Protected Activity
On January 27, 2012, the Fourth Circuit held for the first time that an employee’s informal intra-company complaint regarding possible Fair Labor Standards Act (“FLSA”) violations can constitute protected activity under the FLSA’s anti-retaliation provision. Minor v. Bostwick Labs. Inc., Case No. 10-1258, 2012 U.S. App. LEXIS 1493. The anti-retaliation provision of the FLSA makes it unlawful for a covered employer to “discharge or in any manner discriminate against any employee because such employee has filed any complaint or instituted any proceeding under or related to [the FLSA], or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.” 29 U.S.C. § 215(a)(3). An employer who violates Section 215(a)(3) may be liable to the complaining employee for a wide range of legal or equitable remedies, including without limitation reinstatement, promotion, and the payment of wages lost and an additional equal amount as liquidated damages. 29 U.S.C. § 216.
The plaintiff in Minor, Kathy Minor (“Minor”), filed an action in the United States District Court for the Eastern District of Virginia claiming she was terminated in retaliation for reporting alleged FLSA violations to the company’s chief operating officer. Specifically, Minor had orally complained that her supervisor was altering employee’s time sheets to reflect that they had not worked overtime when they actually had. The lower court, following long-standing Fourth Circuit precedent, held that Minor’s complaint was not protected because the plain language of the FLSA required that she invoke a formal, official proceeding. Minor v. Bostwick Labs., Inc., 654 F. Supp. 2d 433, 434 (E.D. Va. 2009).
The Fourth Circuit, relying on Kasten v. Saint-Globain Performance Plastics Corp.—a recently decided United States Supreme Court decision—overturned the lower court’s ruling. Kasten held that an employee’s oral complaint to a supervisor regarding alleged violations of the FLSA overtime provisions constituted protected activity but expressly declined to answer the question of whether an intra-company complaint could likewise qualify. 131 S. Ct. 1325, 1336 (2011). The Fourth Circuit agreed with Kasten that the statute’s use of the word “filed” does not unambiguously require that the employee’s complaint be in writing and that the FLSA’s remedial purpose requires a broad interpretation to achieve its basic objectives. Answering the question that Kasten left unanswered, the Fourth Circuit held that intra-company complaints can indeed constitute protected activity.
The company-defendant in Minor argued that the court should disregard Kasten and instead follow the Fourth Circuit precedent set in Ball v. Memphis Bar-B-Q Co., 228 F.3d 360 (4th Cir. 2000). The Minor Court distinguished the holding in Ball because, in that case, the court was construing the testifying clause, not the complaint clause. Ball’s holding, that a proceeding before a judicial or administrative body must be instituted before an employee’s activity of “testify[ing] … in any such proceeding” qualifies for protection under the anti-retaliation provision, remains unchanged by the Fourth Circuit’s decision in Minor.
Not all intra-company complaints will be protected. The complaint must provide the employer with “fair notice.” The Fourth Circuit reiterated the standard set by Kasten that an employee’s complaint must be “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.” Both Kasten and Minor noted that “some degree of formality” is required to put the employer on notice that a complaint has been filed. Accordingly, employers may wish to implement a formal grievance procedure to insulate themselves from liability for off-the-cuff complaints.
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