U.S. Supreme Court Decides Fair Labor Standards Act Anti-Retaliation Provision Reaches Oral (and Not Just Written) Complaints

On March 22, 2011, the U.S. Supreme Court held in Kasten v. Saint-Gobain Performance Plastics Corp., that retaliation under the Fair Labor Standards Act, can be based on oral complaints, not just written ones. The Court rejected the employer’s argument that oral complaints are too indefinite to provide an employer with fair notice that an employee is engaging in protected activity.

Facts of the Case: The plaintiff employee believed that the location of the defendant employer’s time clock was illegal under the FLSA because it prevented employees from receiving fair compensation for the time they spent changing in and out of work clothes. The employer had an ethics policy that imposed on employees the obligation to report suspected violations of the law and an internal grievance resolution procedure that instructed employees to immediately contact their supervisor with “questions, complaints, and problems.” The employee claimed that he “raised concerns” with his supervisor that the location of the time clocks was “illegal” and that he also advised human resources personnel (a generalist and the HR manager) that the company would “lose in court” if a legal challenge were brought about the time clock location. He also told his lead operator that he was “thinking about starting a lawsuit about the placement of the time clocks.” The employee claimed that his subsequent discharge from employment was because of these complaints. He sued under the FLSA’s anti-retaliation provision and his claims were dismissed on summary judgment. The trial court, affirmed by the U.S. Court of Appeals for the Seventh Circuit, concluded that the FLSA, which prohibits retaliation against employees because they “file any complaint” required a written filing with a government agency.

The Court’s Ruling: A divided Supreme Court held that the FLSA covers oral complaints, but declined to rule on the related question of whether a complaint must be made to the external authorities rather than solely to the employer. (The Court majority deemed that latter question to have not been raised by the employer.) In concluding that oral complaints are covered, the Court rejected the notion that the statute clearly specified by the use of the term “file” that complaints had to be in writing. The Court reasoned that filings can be oral or written, depending on the context, and thus the language of the statute did not resolve the question on its face. The Court then looked to the purpose of the FLSA, which was intended to prohibit labor conditions detrimental to the general well being of workers, and the population that the law intended to protect, which at the time of passage included numbers of illiterate workers. The Court, however, acknowledged that employers have a right to receive “fair notice that an employee is making a complaint that could subject the employer to a later claim of retaliation.” The Court thus held that a complaint “must be sufficiently clear and detailed for a reasonable employer to understand it, in light of the content and context, as an assertion of rights protected by the statute and a call for their protection.” The dissent would have held that only complaints filed with external authorities (be they oral or written) are protected by the FLSA, given the language, structure, and content of the law. The dissent chided the majority for declining to address an issue implicit in the majority’s holding – whether intra-company complaints are protected – given that the majority’s opinion “assumes a ‘yes’ answer – and … makes no sense otherwise.”

Lessons Learned: The Court has expanded the class of individuals who can claim that they were subject to retaliation for protected complaints, given that purely oral concerns may be later characterized by an employee as such. The Court has indicated, however, that an employee’s complaint must be sufficiently definite to give the employer fair notice. Employers should consider adopting policies that encourage employees to reduce to writing complaints that concern matters of significance so that appropriate action can be taken. Such policies would also warn employees that to the extent they are unwilling, for any reason, to make a written complaint, they need to direct their concerns to responsible individuals within the organization designated to respond to complaints so that appropriate action can be taken. While a policy may not, by itself, limit what communications will suffice to serve as “fair notice,” a policy designating line-level supervisors as persons authorized to receive complaints may give rise to an inference that complaints to them about FLSA-covered matters constitutes “fair notice.” Finally, supervisors should be instructed to immediately report to human resources or other higher management any concerns or complaints from employees that appear to challenge the legality of a policy or practice.

Article courtesy of Worklaw Network firm Shawe Rosenthal.