Justices Won't Review FLSA Protection for Managers

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By Kevin McGowan

June 13 — Denying a fired human resource director's petition, the U.S. Supreme Court won't review the scope of the Fair Labor Standards Act's coverage of managers asserting retaliation for protected activity ( Miller v. Metrocare Servs., U.S., No. 15-1252, cert. denied 6/13/16 ).

Instead, the court June 13 left undisturbed a U.S. Court of Appeals for the Fifth Circuit decision that Stephen Miller failed to show he was terminated by Metrocare Services in Dallas for questioning its overtime pay policies (809 F.3d 827, 25 WH Cases2d 1500 (5th Cir. 2016)).

In seeking review, Miller urged the justices to resolve an “apparent” federal circuit split on whether the FLSA requires managers asserting retaliation to prove they stepped outside their normal job duties in reporting suspected wage and hour violations.

The “manager rule” puts human resources professionals in an “untenable position” of being potentially personally liable for FLSA violations but unprotected if they complain to senior management about such violations, he contended.

HR Director Fired After Reporting FLSA Violations

Miller sued Metrocare, a mental health-care services nonprofit, over his termination after he notified the group's acting chief executive about multiple FLSA violations.

Miller alleged Metrocare wrongly classified its case workers as exempt employees and required them to work overtime without premium pay.

But Metrocare said Miller was fired for failure to conduct annual employee criminal background checks and falsifying records to make it appear the checks were done.

A federal district granted summary judgment to Metrocare and the Fifth Circuit affirmed.

Split on FLSA Application to Managers

The appeals court said Miller didn't show Metrocare's asserted reason for discharge was a pretext for FLSA retaliation.

The Supreme Court has broadly interpreted the FLSA's anti-retaliation provision, but federal appeals courts are split on how it applies to managers, Miller said.

The Tenth, Fifth, First and Sixth circuits say that because managers' jobs may require them to report suspected FLSA violations, they don't engage in protected activity by doing so. Those courts hold managers must take actions outside their assigned job duties to trigger the FLSA's protection.

But the Ninth Circuit in Rosenfield v. GlobalTranz Enters., Inc., 811 F.3d 282, 25 WH Cases2d 1384 (9th Cir. 2015), ruled an HR director fired after alerting her employer about its potential FLSA violations could pursue an anti-retaliation claim.

The “manager rule” is “suspect” and “completely without statutory support,” Miller said. Circuits applying that rule ignore the FLSA's “fundamental policies,” which include potential criminal and civil liability for company officers and others with “operational control” over employees' wage claims, he said.

The manager rule means HR professionals risk termination if they do report suspected FLSA violations or statutory liability if they don't, he said.

Metrocare waived its right to file an opposing brief.

John H. Crouch of Kilgore & Kilgore PLLC in Dallas represented Miller.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

For More Information

Summaries of labor and employment law cases denied Supreme Court review appear in Section E.