Wage & Hour Litigation Blog

U.S. DOL Takes Aim At Second Circuit’s History Of Refusing To Protect Internal Wage Complaints

Posted in DOL Enforcement

Second Circuit Seal.jpgAuthored by Jeremy W. Stewart

The DOL continued its “regulation by amicus program” this past week when it submitted an amicus brief in Greathouse v. JHS Security, Inc., urging the Second Circuit to reverse a lower court’s decision, and longstanding circuit precedent, that internal complaints are not protected by the FLSA’s retaliation provision (29 U.S.C. § 215(a)(3)).  The Second Circuit’s decision may result in significant consequences for employers operating in New York, Vermont, or Connecticut.

This is nearly the fiftieth “significant” amicus brief the Solicitor General’s Fair Labor Standard’s Division has filed since the beginning of 2009, and the fifth it has filed seeking a broader interpretation of the FLSA’s retaliation provision during the same period.  This, despite the Supreme Court’s unanimous rebuke last term of the DOL’s amicus program in Christopher v. SmithKline (discussed here), as we have previously discussed. 

Case Background

In Greathouse, the plaintiff alleged he complained to JHS’s President that he had not received a paycheck in several months.  According to the plaintiff, the President allegedly responded, “I’ll pay you when I feel like it,” and pulled a gun on him.  Not surprisingly, plaintiff never returned to work.

Plaintiff sued the company and its president in the Southern District of New York alleging, among other things, they violated the FLSA when JHS’s President pulled a gun on him in response to his complaint.  The district court threw out plaintiff’s FLSA retaliation claim because he only complained internally, and not to “some relevant governmental or other prosecutorial authority.”  The plaintiff then appealed to the Second Circuit.

FLSA Retaliation And The DOL’s Position

The FLSA prohibits discharging or in any other manner discriminating against an employee “because such employee has filed any complaint” covered by the FLSA.  Two questions that have divided courts are:  (1) does the “filing” requirement preclude oral complaints from protection, and (2) does an internal complaint qualify as “fil[ing] any complaint?”

The Supreme Court answered the former question in Kasten v. Saint-Gobain Plastics (discussed here), holding that oral complaints may be protected.  The Supreme Court declined to directly address the second question.

The Second Circuit is the only circuit that does not extend the FLSA’s protection to internal complaints.  Approximately 20 years ago, in Lambert v. Genese Hosp., the Second Circuit held that the FLSA’s retaliation provision “does not encompass complaints made to a supervisor.”  The DOL has filed two amicus briefs in 2013 seeking a reversal of Genese

Specifically, the DOL argues the Second Circuit read the FLSA too narrowly when it declined to read protection for internal complaints into the statute.  The DOL also argues that the plain meaning of “any complaint” includes intracompany complaints, not just those filed with governmental entities.  Alternatively, the DOL argues the Second Circuit should broaden its interpretation of the FLSA’s retaliation provision to allow the remedial purposes of the FLSA to be achieved.

The DOL’s final argument is that it has long viewed internal complaints as protected.  The Fourth Circuit considered this argument in 2012, and concluded that although not determinative, the DOL’s consistent advancement of this “reasonable and thoroughly considered position” added force to its conclusion that internal complaints may be protected by the FLSA.  The Supreme Court previously found a similar argument persuasive in extending protection to oral complaints.

Implications

According to an amicus brief several labor groups have requested leave to file in Greathouse, in low wage industries, only 1.2% of wage complaints are first made to an outside agency, and only 1.3% are made to an employer and outside agency.  A reversal of Genese may create claims for the over 95% of employees who only make internal complaints, which will likely increase the overall number of FLSA cases filed in the Second Circuit (over 1,500 between January 1, 2012 and March 3, 2013) or, at a minimum, increase the number of FLSA retaliation claims. 

In addition to the increased risk of FLSA retaliation claims, expanded protection of internal complaints will mean that employers must be more vigilant in handling internal wage complaints because seemingly minor grumblings may create bigger issues.  As a result, it will be more important than ever to ensure front-line managers are trained to handle these internal complaints.