discrimination harassment retaliation

HR Director Can Sue When Fired for Retaliation

The FLSA provides that it is unlawful for an employer to: “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee[.]”  29 U.S.C. § 215(a)(3).  Employees fired for retaliation in violation of the FLSA can sue their employer.

But what if the employee’s job is to report violations of the company to the employer so the employer can decide whether to fix the problem?  Has the employee “filed a complaint,” or just done the employee’s job?  In Rosenfield v. Globaltranz Enterprises, the Ninth Circuit held an HR Director can state a claim that she was fired for retaliation when she reported violations of the FLSA to the employer.

Alla Rosenfield was the Director of Human Resources for Globaltranz. Throughout her employment, Plaintiff reported to her superiors that the company was not compliant with the FLSA, and she repeatedly sought changes to attain statutory compliance.  After GlobalTranz fired Plaintiff, she filed a lawsuit alleging that she was fired for retaliation in violation of the FLSA.  Plaintiff claimed GlobalTranz fired her for complaining to other managers and to executives that GlobalTranz was failing to comply with the FLSA.  The court had to decide whether an HR Director can state a claim for retaliation under the FLSA when it was her job to bring FLSA violations to the employer’s attention.

HR Directors and Managers Can Sue when Fired for Retaliation

Even though the district court recognized that Plaintiff had “advocated consistently and vigorously on behalf of . . . GlobalTranz’s employees whose FLSA rights Plaintiff thought were being violated,” the district court held that she nevertheless was not entitled to the protections of § 215(a)(3) because she had not “filed any complaint” for purposes of the FLSA.

Unlike some laws, congress did not create a detailed federal supervision system or process requiring government payroll inspections. Rather, it chose to rely on information and complaints received from employees seeking to vindicate rights claimed to have been denied. The FLSA is not supposed to be a “gotcha” statute and “seeks to establish an enforcement system that is fair to employers.” “To do so, the employer must have fair notice that an employee is making a complaint that could subject the employer to a later claim of retaliation.” Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 131 S. Ct. 1325, 1334 (2011).

In Kasten, the Supreme Court established a “fair notice” test for deciding whether an employee has “filed any complaint” under the anti-retaliation provision of the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 215(a)(3): “[A] 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 and a call for their protection.”

If an entry-level employee reported that someone is underpaid in violation of the FLSA and requested that the employee be compensated in compliance with the Act, a reasonable employer almost certainly would understand that report as a “complaint.” But if the identical report were made by a manager tasked with ensuring the company’s compliance with the FLSA, a reasonable employer may not understand that report as a “complaint.” Rather, the employer think the manager was just carrying out his or her duties. Therefore, when determining whether an employee has “filed any complaint,” the employee’s role as a manager often is an important contextual element.

According the Ninth Circuit:

The employee’s job title and responsibilities—in particular, whether he or she is a manager—form an important part of that “context.” 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. That may be particularly true with respect to upper-level managers who are responsible for ensuring compliance with the FLSA.

The Ninth Circuit held that a complaining employee’s position as a manager is an important part of the “context” that the fact-finder must consider, and a jury reasonably could find that Plaintiff, a managerial employee, filed such a complaint. Because Kasten requires consideration of the content and context of an alleged FLSA complaint, the question of fair notice must be resolved on a case-by-case basis. An employee’s managerial position is only one consideration.

The court declined to formulate or adopt a special bright-line rule to apply when considering whether a manager has “filed any complaint” within the meaning of the FLSA.

Even if an employee is responsible for reporting violations of the law to the employer, such reports can constitute “filing a complaint,” and serve as the basis for a retaliation complaint.  Employers must carefully consider a number of factors before terminating an employee (even and at-will employee).  Employers may need to take particular care when terminating HR employees or other managers whose job requires them to report violations of the law.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

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