Co-authored by Steve Shardonofsky and Howard M. Wexler

In 2011, the U.S. Supreme Court held in Kasten v. Saint-Gobain Performance Plastics Corp., that oral complaints of a violation of the Fair Labor Standards Act can constitute protected activity under the FLSA’s anti-retaliation provision.  But the question whether an oral complaint made to a private employer rather than to the government qualifies as protected activity was not before the Court in Kasten, and the case did not resolve a split among the Courts of Appeals on this issue.

In Greathouse v. JHS Security Inc. et al., the Second Circuit Court of Appeals joined the First, Fourth, Fifth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits and held that Section 215(a)(3) of the FLSA does not require an employee to complain to a government agency as a predicate for an FLSA retaliation claim.  The Court, however, took pains to emphasize that not every “oral complaint” will be enough to state an FLSA retaliation claim as the 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 [FLSA] and a call for their protection.”

Second Circuit’s Decision

The Greathouse plaintiff complained to his boss that he had not been paid in several months. The plaintiff alleged that his employer responded by saying that he would pay the plaintiff when he felt like it and by then pointing a gun at the plaintiff.  Understanding this exchange as ending his employment, the plaintiff two weeks later filed a lawsuit for unpaid wages as well as retaliation.  He alleged that his employer constructively discharged him in retaliation for his complaint about unpaid wages, thereby violating the FLSA and New York Labor Law’s anti-retaliation provisions.  The district court entered a default judgment in favor of the plaintiff on his claim for unpaid wages, but rejected his retaliation claim because the Second Circuit previously held that informal oral complaints to supervisors did not amount to “filing a complaint” under the FLSA and therefore could not support a retaliation claim.

The Second Circuit, “[b]oth impelled and guided by Kasten,” examined the legislative history of the FLSA and reversed its prior stance, holding that the “FLSA’s remedial goals counsel in favor of construing the phrase ‘filed any complaint’ in section 215(a)(3) broadly, to include intra-company complaints to employers.”  But the Second Circuit emphasized that not all oral complaints constitute protect activity.  Whether an oral complaint constitutes protected activity is a “context-dependent inquiry” and not all “grumbles in the hallways about an employer’s payroll practice” will rise to the level of protected activity as “some degree of formality” is required.  This holding is consistent with other Courts of Appeals that have addressed the issue, such as the First Circuit and Ninth Circuit.

Implications for Employers

Employers are well advised to be attentive to their employees’ complaints.  Following Kasten, and now Greathouse, it is even more important for employers to be sensitive to employees’ intra-company oral as well as written complaints regarding wages, overtime, and hours worked.  Managers and supervisors should be trained to recognize complaints under the FLSA and corresponding state laws and to respond to them appropriately.  Whether an internal complaint rises to the level of protected activity is a context-specific inquiry.  While the courts continue to assert that there are no “magic words” that an employee must use to assert a complaint and that generalized statements or complaints regarding pay practices may not rise to the level of protected activity under the FLSA (or even under the National Labor Relations Act), this should not embolden employers to ignore vague complaints.  After all, although you may believe today that a particular complaint is mere “venting” or “blowing off steam,” a court or a jury may later disagree.  Of course, following an employee’s complaint, employers need to ensure that any adverse action is based on legitimate, non-retaliatory reasons and not in response to the complaint.