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One court demands that employee wage complaints be made to government entity, while another says complaint to employer sufficient

August 3rd, 2012  |  Ron Miller

Does an employee’s complaint to a supervisor or other company official regarding alleged wage violations shield that employee from retaliatory discharge under the FLSA? Not surprisingly, the answer depends on what part of the country the employee files his complaint. Recently, two federal courts, each relying on the U.S. Supreme Court’s decision in Kasten v Saint-Gobain Performance Plastics Corp, came to opposite conclusions. In Kasten, the Court held that oral as well as written complaints suffice to “fall within the scope of the phrase ‘filed any complaint’ in the FLSA anti-retaliation provision.”

Government complaint required. In the first case, Neviaser v Mazel Tec, Inc, a federal district court in Vermont ruled that an employee failed to state a claim for retaliatory discharge under the FLSA where he alleged that he was discharged for complaining to his supervisor and the owner of the business that the failure to pay him overtime pay for hours in excess of 40 per week was unlawful. In that case, the employee’s complaint failed not because it was made orally, but because he only alleged that complaints were made to the supervisor and owner and not to a government authority.

After working approximately 15 hours of overtime in the preceding workweek, the employee complained to his supervisor that the employer was violating the law by not paying him overtime. That afternoon he was demoted. After the employee told his supervisor that he would be filing a complaint with the Department of Labor, he was fired. The employee did not file a complaint with the DOL, but instead filed suit. The employer responded by filing a motion to dismiss for failure to state a claim upon which relief could be granted.

The district court observed that the Second Circuit, in Lambert v Genesee Hosp, has held that only the filing of formal complaints to a government authority is protected under the FLSA: an informal complaint made directly to an employer does not constitute protected activity. In view of Lambert’s holding that a complaint made to a supervisor does not suffice, the employee did not state a claim for unlawful retaliation under the FLSA, declared the court.

Internal complaint sufficient. In the second case, Joyce v The Upper Crust, LLC, a former operations manager at a pizza-store chain survived a motion to dismiss his FLSA and state-law claims arising from the company owner’s threats to kill him and “ruin his life” if he complained to the DOL about being stiffed in his final paycheck, ruled a federal district court in Massachusetts.

After a DOL investigation in 2009 into Upper Crust’s wage and hour practices, the employer was required to pay back wages to its employees. However, after issuing the backpay, the employer told employees that the money belonged to the company and they would have to pay it back if they wanted to keep their jobs. After they complained to the plaintiff about their plight, he raised concerns to senior management. When his internal complaints fell on deaf ears, the plaintiff pursued the matter with the DOL.

Soon thereafter, the employee was subjected to harassment by senior management, and was ultimately terminated, and was shorted on his final paycheck. Two months later, after the Boston Globe ran an article about alleged labor violations at the pizza chain, the owner left the plaintiff threatening text messages, prompting him to file a formal police complaint. The plaintiff filed suit against the employer and its owner, asserting retaliation claims under the FLSA, among other claims.

On these facts, the plaintiff stated a viable retaliation claim under the FLSA, the court held. He asserted that he had engaged in statutorily protected activity by orally complaining of the employer’s pay practices to the company’s business partner, general manager, and chief financial officer. Internal complaints of alleged FLSA violations are sufficient to trigger the protections of Sec. 215(a)(3) of the Act, the court noted.