Fourth Circuit Joins Circuit Court Majority, Finds FLSA May Protect Internal Complaints

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A fired medical technologist for a laboratory in Virginia can proceed with a Fair Labor Standards Act retaliation claim because she sufficiently alleged that her internal oral complaint to a company official about alleged FLSA violations constituted protected activity, the U.S. Court of Appeals for the Fourth Circuit ruled Jan. 27 in an issue of first impression for the circuit (Minor v. Bostwick Labs. Inc., 4th Cir., No. 10-1258, 1/27/12).

In August 2009, the U.S. District Court for the Eastern District of Virginia dismissed Kathy P. Minor's claim against Bostwick Laboratories Inc., finding that the FLSA's anti-retaliation provision at 29 U.S.C. § 215(a)(3) does not apply to internal, or intracompany, complaints.

Reversing and remanding, the Fourth Circuit joined the majority of circuit courts that have held that an intracompany complaint to management may constitute protected activity for Section 215(a)(3) purposes so long as it is “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.”

Such an interpretation, the court said, comports with the FLSA's objectives of ensuring the maintenance of “certain minimum labor standards” and protecting workers who may fear retaliation for invoking their rights.

In so ruling, the Fourth Circuit relied on the U.S. Supreme Court's reasoning in Kasten v. Saint-Gobain Performance Plastics Corp. ( 131 S. Ct. 1325, 17 WH Cases 2d 577 (2011); 29 HRR 313, 3/28/11), as well as Labor Department and Equal Employment Opportunity Commission positions on the protected activity issue.

Technologist Complained to Company COO.

According to the court, Minor began working for Bostwick in December 2007. She claimed she received satisfactory to above average job performance ratings.

On May 6, 2008, Minor and several co-workers met with Bostwick Chief Operating Officer Bill Miller to discuss concerns about supervisor Dawn Webber. Minor told Miller that she believed Webber was violating the FLSA by removing overtime hours from employee time sheets. Miller allegedly told the employees he would investigate their allegations.

Bostwick fired Minor on May 12, citing conflict between Minor and her supervisor. Minor brought an FLSA retaliation claim against the company in June 2009.

The district court granted Bostwick's motion to dismiss upon finding that an employee's internal complaint about possible FLSA violations does not constitute protected activity under the statute. The court read the plain language of Section 215(a)(3) as requiring a formal, official proceeding before the FLSA's anti-retaliation protections can be invoked.

Reversing and remanding on appeal, the Fourth Circuit held that an employee's internal complaint to management may be protected activity under the FLSA. The First, Third, Fifth, Sixth, Eighth, Ninth, Tenth and Eleventh circuits have reached the same conclusion.

The court observed that the Supreme Court 6-2 ruled in Kasten that the FLSA's anti-retaliation provision covers an employee's oral complaint to his or her employer, but expressly declined to resolve whether the statute covers an internal complaint to a private employer.

However, the Fourth Circuit said the majority's reasoning in Kasten is applicable to its analysis in the instant case.

Court Looks to FLSA's Remedial Purpose.

In light of Section 215(a)(3)'s ambiguous statutory language, the Fourth Circuit, like the majority in Kasten, looked to the FLSA's remedial purpose to conclude that intracompany complaints can qualify as protected activity.

The FLSA “was enacted to combat 'labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers,' ” the court said. It added that the Supreme Court has “consistently held that the FLSA 'must not be interpreted or applied in a narrow, grudging manner.' ”

Indeed, the court said the justices in Kasten pointed out that “insofar as the [FLSA's] antiretaliation provision covers complaints made to employers,” limitations on Section 215(a)(3)'s scope potentially could “discourage the use of desirable informal workplace grievance procedures to secure complaints with the [FLSA],” thus undermining the statute's objectives.

“Following this reasoning, we conclude that an interpretation that limits [Section] 215(a)(3)'s coverage to complaints made before an administrative or judicial body would overly circumscribe the reach of the antiretaliation provision in contravention of the FLSA's remedial purpose,” the Fourth Circuit said.

Fourth Circuit Ruling Doesn't Go to Merits.

The Fourth Circuit said Minor's FLSA retaliation claim survives Bostwick's motion to dismiss because Minor adequately alleged that her complaint to COO Miller was “sufficiently clear and detailed” for the company to understand it as an assertion of her FLSA rights.

The Fourth Circuit cautioned, however, that it expresses no view regarding the merits of Minor's FLSA retaliation claim. “We simply hold that, on the facts alleged, her complaint survives a motion to dismiss,” the court said.

By Jay-Anne B. Casuga