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Supreme Court rules oral complaints protected under FLSA’s antiretaliation provision; sets “fair notice” standard for employee complaints to be protected

March 22nd, 2011  |  Lisa Milam

Oral complaints are protected under the FLSA’s antiretaliation provisions, the U.S. Supreme Court ruled this morning in a 6-2 opinion authored by Justice Breyer (Kasten v Saint-Gobain Performance Plastics, Dkt No 09-834, March 22, 2011, Breyer, S). Resolving a circuit split, the majority found the scope of the statutory term “filed any complaint” found in FLSA, Sec. 215(a)(3), encompasses oral as well as written complaints. The Court vacated a Seventh Circuit decision that held a discharged employee did not engage in FLSA-protected conduct when he made a verbal complaint about the location of the employer’s time clocks, which prevented employees from getting paid for time spent donning and doffing protective gear, in violation of the Act. Justice Scalia dissented, joined by Justice Thomas. Justice Kagan did not participate.

Facts. In his FLSA retaliation suit, the petitioner contended that he “raised a concern” with his shift supervisor that the location of the employer’s time clocks was illegal. He told his lead operator that he “was thinking about starting a lawsuit about the placement of the time clocks.” He told an HR employee and an operations manager that, if the time clock location were challenged in court, the company would lose. In short, the employee made repeated (verbal) efforts to inform the employer of his concerns, in accordance with the company’s internal grievance resolution procedure, and was suspended and then discharged as a result. Saint-Gobain denied that the employee made any meaningful complaint; moreover, it claimed, the employee was fired because he failed to clock in and out, despite repeated warnings.

Seventh Circuit decision. In the decision below, the Seventh Circuit held the employee did not suffer retaliation within the meaning of the FLSA because he was not engaged in FLSA-protected activity. Addressing for the first time whether internal complaints are protected activity, the Seventh Circuit concluded, “in line with the vast majority of circuit courts to consider this issue,” that under the plain language of the Act, intracompany complaints are covered, and that protection from retaliation is not limited to formal complaints filed in court or with an administrative agency. However, unwritten verbal complaints are not covered. The appeals court rejected the Secretary of Labor’s contention, in an amicus brief, that the retaliation provision should be read expansively to include such unwritten objections, reasoning instead that the provision refers to “filing” a complaint, which connotes a complaint made in writing. In a 7-3 vote, the Seventh Circuit denied rehearing.

“Filing any complaint.” The Supreme Court majority held that while the language of FLSA, Sec. 215(a)(3), in isolation may be ambiguous, the purpose of the FLSA and the context in which it was enacted compelled the conclusion that oral complaints are protected.

Looking first to dictionary definitions of the term “filed,” the majority noted that, while some definitions contemplate a writing, they don’t necessarily limit the scope of the phrase to written complaints. Moreover, the majority cited instances in which legislators, administrators, and judges have used the word “file” to include oral statements. Numerous regulations promulgated by various federal agencies permit complaints to be filed orally, and “a review of contemporaneous judicial usage shows that oral filings were a known phenomenon when the Act was passed.” The broader phrase “filed any complaint” suggests an even broader interpretation was contemplated — one that would encompass oral complaints, the majority reasoned. But the “bottom line,” the Court concluded, was that a textual interpretation was not enough to resolve the matter. Therefore, the majority considered the “functional considerations” at play.

Statutory objectives. Limiting the meaning of Sec. 215(a)(3) to written complaints “would undermine the Act’s basic objectives” of prohibiting detrimental labor conditions and promoting a minimum standard of living for workers. Illiteracy rates were high among the poor at the time the FLSA was enacted, the majority observed. “Why would Congress want to limit the enforcement scheme’s effectiveness by inhibiting use of the Act’s complaint procedure by those who would find it difficult to reduce their complaints to writing, particularly illiterate, less educated, or overworked workers?,” Breyer queried. “President Franklin Roosevelt pointed out at the time that these were the workers most in need of the Act’s help.”

Moreover, limiting the antiretaliation provision to the filing of written complaints would undermine the flexibility available to those agencies charged with enforcing the Act, the majority reasoned. “It could prevent Government agencies from using hotlines, interviews, and other oral methods of receiving complaints.” Citing the broad interpretation that the Court has afforded the NLRA’s antiretaliation provision, the similar need for effective enforcement of the FLSA argues for a broad rather than narrow reading of the word “complaint” here.

Fair notice standard. Saint-Gobain urged that Congress intended that the FLSA’s enforcement mechanism was fair to employers as well — and that in fairness, the employer must have notice of employee complaints that might subject it to a potential retaliation claim. “We agree with Saint-Gobain that the statute requires fair notice,” the majority wrote. “But we also believe that a fair notice requirement does not necessarily mean that notice must be in writing.”

The Court then set forth the minimum requirements for an employee complaint to satisfy this fairness element: “To fall within the scope of the antiretaliation provision, 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.” This standard could be met by both oral and written complaints, the Court concluded, leaving it to the lower courts to decide whether the employee here will be able to satisfy this requirement.

Agency deference. Finally, the Court granted deference to the Secretary of Labor’s consistent position that the words “filed any complaint” encompass oral complaints. The Department of Labor articulated that view in an enforcement action years ago, and it has reaffirmed that view in subsequent briefs. The majority also pointed out that the DOL recently created a hotline to receive oral complaints, thus acting in accordance with this view. (The Court also noted, for good measure, that the EEOC has set forth a similar view in its compliance manual.) Because these agency positions are reasonable and — having been long-held — reflected careful consideration and not “post hoc rationalizations,” they “add[ed] force” to the Court’s holding.

Dissent. Justice Scalia would have affirmed the Seventh Circuit, arguing that FLSA, Sec. 215(a)(3), does not cover internal employer complaints at all, be they oral or written — and he objected to the majority’s refusal to consider this underlying issue as having not been fairly presented by Saint-Gobain. Scalia contended that the plain meaning of “filing a complaint” and its statutory context contemplate an official grievance filed with a court of a government agency, not complaints to an employer. He noted that every other use of the word “complaint” in the statute “refers to an official filing with a governmental body.” If the term does not connote something in writing, it “at least suggests a degree of formality consistent with legal action and inconsistent (at least in the less regulated work environment of 1938) with employee-to-employer complaints.”

Countering the majority’s sense that statutory intent weighed in favor of including oral complaints as protected activity, Scalia pointed out that the 1938 version of the FLSA did not create a private right of action for retaliation. The private right to sue was only added in 1977; before then, only the Wage and Hour Administrator could enforce the antiretaliation provisions of the Act. “It would seem more strange to require the employee to go to the Administrator to establish, and punish retaliation for, his intracompany complaint, than to require the Administrator-protected complaint to be filed with the Administrator in the first place,” Scalia reasoned.

While he argued there was no need to rely on “abstractions of congressional purpose,” Scalia noted, nonetheless, that Congress, in enacting the FLSA, may have deliberately chosen not to protect intracompany complaints for the same reason it did not provide a private cause of action for retaliation: “because it was unwilling to expose employers to the litigation, or to the inability to dismiss unsatisfactory workers, which that additional step would entail.”

Finally, Scalia rejected as “unacceptable” the majority’s nod to more recent statutes as support for its conclusion that the FLSA covers intracompany complaints. “While the jurisprudence of this Court has sometimes sanctioned a ‘living Constitution,’” he wrote, “it has never approved a living United States Code.”

James H. Kaster of the Minneapolis firm Nichols Kaster represented the Petitioner, Kevin Kasten. Carter G. Phillips, of Sidley Austin’s Washington DC office, and Thomas P. Godar, of the Wisconsin firm Whyte Hirschboeck Dudek, represented Saint-Gobain.

Employer ramifications. Commenting on the decision, Stacy Smiricky, a partner in the Chicago office of Wildman, Harrold, Allen & Dixon LLP and an Employment Law Daily advisory board member, said the majority’s broad reading of the phrase “filed any complaint” is not surprising. The decision is similar to other employment-related statutes under which employees’ rights and employers’ obligations are triggered by nonwritten complaints, she noted.

“The employer community can only hope that common sense will guide the extent to which Kasten may be deemed applicable in future cases to oral complaints such as ‘the time clock is in such an inconvenient place that we ought to be paid for walking to and from it,’” Smiricky said. “Such complaints could impose additional burdens on employers to investigate every employee gripe. Cautious employers will do so.”

While the majority emphasizes that an employee’s nonwritten complaint must be sufficiently clear and detailed for a reasonable employer to understand it as an assertion of rights, the very nature of such oral complaints invites fact disputes, she added. “Exactly what do the employer and employee each say was the content and context of the employee’s oral complaint about the unpaid time? Such fact disputes may decrease employers’ ability to resolve such cases on summary judgment.”

Smiricky recommends that employers train their supervisors and managers to be aware of these types of nonwritten complaints, report them immediately to the person responsible for investigating those complaints, and thoroughly document both the oral complaint and the company’s investigation of it.