Fired HR Director May Pursue FLSA Retaliation Claim

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By Kevin McGowan

Dec. 15 — A human resources director for a transportation logistics firm who was fired after repeatedly telling her superiors the company wasn't complying with the Fair Labor Standards Act may pursue an FLSA retaliation claim, a divided U.S. Court of Appeals for the Ninth Circuit ruled Dec. 14.

In a 2-1 decision, the court said Alla Josephine Rosenfield gave GlobalTranz Enterprises Inc. “fair notice” she was making an FLSA complaint despite her managerial status. The Ninth Circuit said under Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 17 WH Cases2d 577 (2011) (55 DLR AA-1, 3/22/11), an employee's managerial status is just one factor in a case-by-case analysis of whether the employee “filed any complaint” within the FLSA's meaning.

In dissent, Judge Dee V. Benson said Kasten didn't change the “manager rule” applied by four other federal appeals courts. Under that rule, a manager must step out of her normal business role and take some action adverse to her employer to be covered by the FLSA's anti-retaliation provision, Benson said. Since Rosenfield was simply performing her job by raising the alleged FLSA non-compliance to fellow managers, she wasn't protected by the act, the dissent said.

The decision creates a potential conflict among the federal circuits on when a manager asserting other employees' FLSA rights may be deemed protected. The Ninth Circuit said the decisions applying the manager rule all were issued before Kasten, and those courts might consider those cases differently now.

A joint amicus brief submitted by the U.S. Department of Labor and the Equal Employment Opportunity Commission supports application of Kasten‘s “fair notice” standard, the Ninth Circuit said. But the dissent said Kasten, which held the FLSA may protect a non-managerial employee's oral complaint, has no relevance to whether a manager who never took any action adverse to the employer is protected.

The court's decision is “a great result” for “lower-level managers” who experience retaliation by upper management for protecting hourly employees' FLSA rights, said Timothy J. Casey, the Phoenix lawyer who represented Rosenfield.

Prior to the Ninth Circuit's ruling, “it was very difficult or impossible” for managers to get FLSA protection, said Casey, who is with Schmitt Schneck Smyth Casey & Even PC. But now, if GlobalTranz doesn't request and receive en banc review, Rosenfield will get a jury trial on her claim, he said.

The Ninth Circuit's view that its standard is “harmonious” with the manager rule used by other federal appeals courts is “pretty convincing” given that the other decisions all were pre-Kasten, Casey told Bloomberg BNA Dec. 15.

GlobalTranz declined comment on the ruling, but it's considering options for further appellate review.

‘Fair Notice' Test Doesn't Exclude Manager

A federal district court in Arizona granted summary judgment to GlobalTranz, finding that although Rosenfield had “advocated consistently and vigorously” for FLSA-covered employees, she hadn't “filed any complaint” for purposes of the act's anti-retaliation provision.

On appeal, the Ninth Circuit said Kasten provides the relevant standard for deciding if any employee, manager or non-manager, has filed a complaint triggering the FLSA's anti-retaliation protection.

Kasten‘s test requires an employee's complaint to be “sufficiently clear and detailed” that a reasonable employer would understand it, “in light of both content and context,” to be “an assertion of rights” provided by the FLSA and “a call for their protection,” the court said.

“The employee's job title and responsibilities—in particular, whether he or she is a manager—form an important part of that ‘context,' ” Judge Susan Graber wrote.

“Generally speaking, managers are in a different position vis-a-vis the employer than are other employees because (as relevant here) their employer expects them to voice work-related concerns and to suggest changes in policy to their superiors,” the court said. “That may be particularly true with respect to upper-level managers who are responsible for ensuring compliance with the FLSA.”

But Kasten requires the “fair notice” issue to be resolved on a case-by-case basis, the court said. An employee's managerial position is just “one consideration” in deciding if the test has been met, the court said.

“Moreover, an employee's status as a ‘manager' is not entirely binary,” Graber wrote. “A different perspective on fair notice may apply as between a first-level manager who is responsible for overseeing day-to-day operations and a high-level manager who is responsible for ensuring the company's compliance with the FLSA. Refining the general rule to focus on only one specific factual element may obscure important nuances.”

Jury Could Find Protection

Accepting Rosenfield's statement of the facts as true, the court said, a reasonable jury could find her advocacy “reached the requisite degree of formality” to constitute protected activity under the FLSA.

During her tenure of slightly more than a year with GlobalTranz, Rosenfield complained orally to management on at least eight occasions that the company wasn't complying with the FLSA, the court said. She provided copies of the statute on some occasions, specifically asserted that many employees were wrongly classified as FLSA-exempt and requested wage adjustments for them, the court said. She also raised the subject of FLSA violations in at least 27 weekly and monthly reports to her superiors, the court said.

A manager's reports on a company's compliance with employment-related statutes ordinarily wouldn't put the employer on notice the manager was filing an FLSA-protected complaint, the court said.

But in Rosenfield's case, ensuring compliance with the FLSA wasn't part of her job responsibilities, the court said. Instead, Rosenfield's boss “considered himself solely responsible for FLSA compliance” and “did not understand, appreciate, or welcome [Rosenfield] bringing to his attention the FLSA violations,” the court said.

Her boss in March 2011 agreed to take some actions to address Rosenfield's FLSA complaints, the court recounted. But after Rosenfield discovered the company wasn't implementing the changes, she complained again. Her boss fired her in May 2011, five days after her final complaint, the court said.

“Viewing the evidence in the light most favorable to [Rosenfield], the company understood these interactions to be complaints on the subject of FLSA compliance,” the court said. “Because FLSA compliance was not part of [her] job portfolio, her advocacy for the rights of employees to be paid in accordance with the FLSA could not reasonably have been understood (if it was) merely to be a part of [her] duties.”

Judge Alex Kozinski joined in the majority opinion.

Dissent: Wrong Test, Bad Result

In dissent, Benson said the district court properly dismissed Rosenfield's FLSA retaliation claim because “all of [her] actions fell within the ambit of her management duties” and she didn't take a position adverse to the employer.

Every other federal appeals court to address the issue has ruled the FLSA requires a manager to “step outside of his or her role” as a manager in order to “file a complaint,” under the act, the dissent said.

In Kasten, the only issue was whether an oral complaint by a non-managerial employee was a complaint for FLSA retaliation purposes, Benson wrote. The Supreme Court expressed no opinion on what would constitute “fair notice” in the context of a manager's complaint, he said.

The high court's “fair notice” rule was “merely instructive” as to when an oral complaint is sufficient to rise to the level of protection from retaliation under the FLSA, the dissent said. Kasten left “undisturbed” the “well-reasoned opinions of four sister circuits” regarding how the FLSA anti-retaliation provision applies to managers, Benson said.

The majority's approach defines “filing any complaint” to encompass the statements of a manager who in any way expresses a point of view regarding the employer's compliance or non-compliance with the FLSA, the dissent said.

The decision gives more protection to managers than to rank-and-file employees, the dissent said. The majority's reasoning allows a manager to be protected simply by expressing her point of view to other managers, internally, about what she perceives as the company's FLSA non-compliance, Benson said. “It is a strange result the majority reaches, which treats upper management better than the rank-and-file non-management employees for whom the act's protections are primarily designed,” he wrote.

Dinita L. James of Gonzalez Saggio & Harlan PC in Phoenix represented GlobalTranz. Paul L. Frieden and Melissa Ann Murphy represented the Labor Department and Susan L.P. Starr represented EEOC as amici.

To contact the reporter on this story: Kevin McGowan in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at

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