Wednesday, March 23, 2011

Supreme Court Holds that a Verbal Complaint Constitutes "Filing" Under the FLSA in a 6-2 Majority (Kagan, J., not participating)

In Kasten v. Saint-Gobain Performance Plastics Corp., No. 09-834, 563 U.S. ___ (March 22, 2011), the Supreme Court held that the anti-retaliation provision of the Fair Labor Standards Act (FLSA) applies to both oral and written complaints.  In an opinion written by Justice Breyer, the Court found that 29 U.S.C. § 215 (a)(3) of the FLSA, its anti-retaliation provision, should be broadly construed to protect an employee who "has filed any complaint" . . . under or related to [the Act] . . ." Slip op. at 1. Justice Scalia, with whom Justice Thomas joined, vigorously dissented.

In so holding, Justice Breyer states: ". . . The phrase 'filed any complaint' contemplates some degree of formality, certainly to the point where the recipient has been given fair notice that a grievance has been lodged and does, or should, reasonably understand the matter as part of its business concerns." Slip op. at 11.  This frames a new jury instruction to ask jurors to determine whether Justice Breyer's "formality" test has been satisfied.  Following the articulation of that test, Justice Breyer states: "And it is difficult to see how an employer who does not (or should not) know an employee has made a complaint could discriminate because of that complaint." Id.

Finally, Justice Breyer states that the Court agrees with the government's statement at oral argument that a complaint is "filed" when "a reasonable, objective person would have understood the employee" to have "put the employer on notice that [the] employee is asserting statutory rights under the [Act]."  Id. at 12.  Do I hear Justice Breyer again framing the jury instruction?  Justice Breyer goes on to say the following: "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."  Id.  More fodder for jury instructions.

Justice Breyer and Justice Scalia (with Justice Thomas opting out of Justice Scalia's sarcastic footnote number 6 about Skidmore deference) cross swords over whether any deference should be given to the fact that the Secretary of Labor had consistently construed the statute to encompass oral complaints.  Justice Breyer finds the agency views to be reasonable, consistent with the statute, to reflect careful consideration rather than post hoc rationalization, and to consequently "add force" to the Court's ultimate ruling.

Interestingly, even though a violation of the anti-retaliation provision of the FLSA can subject the violator to criminal prosecution, see 29 U.S.C. § 216(a), Justice Breyer refuses to apply the "rule of lenity" that applies to the interpretation of criminal statutes, finding that the statute does not "remain[] sufficiently ambiguous to warrant application of the rule of lenity here."  Id. at 14.  This holding by the Court may very well be transported into civil litigation under the Computer Fraud and Abuse Act, which from its inception was a criminal statute and only later a civil statute also.

The Court, of course, declines to address the underlying, unresolved issue in this case, that is, whether internal corporate complaints are entitled to protection in any event.  So, bottom line, we know for certain that oral complaints that satisfy Justice Breyer's "formality" test are protected under the FLSA, but given the deep division that exists within the federal courts, we do not know whether complaints, whether they be oral or written, within a company about FLSA violations constitute protected activity under the anti-retaliation provisions of the FLSA.  That issue remains for another day, and Justice Scalia makes it unequivocally plain that he would find internal corporate complaints to not be encompassed by the statute.  Certainly, in those circuits that have held internal corporate complaints to be protected, employers will now need to institute procedures to receive oral complaints and to alert the chain of supervision to advise management of oral complaints.

While I am only beginning to think through the implications of the opinion, it seems to me that it would be wise for employers to put in writing in its employee handbook where and how one can orally complain within the company.  One would think that if the company has articulated a specific process and specific persons to whom one can and should complain, alleged oral complaints outside of that process may not meet Justice Breyer's "formality" rule and thus may not be entitled to protection under the FLSA.

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Stephanie R. Thomas, Ph.D. said...

Thanks for the informative post, Bob! It remains to be seen whether internal corporate complaints are entitled to protection. Even though the decision deals specifically with the anti-retaliation provisions of FLSA, there may be more general implications of the decision. In light of the three recent Supreme Court decisions regarding retaliation - Thompson v. North American Stainless, Staub v. Proctor Hospital, and Kasten v. Saint-Gobain - more attention is being paid to retaliation claims. Retaliation is the leading type of claim filed with the EEOC, and these decisions aren't going to change that. Employers need to take a look at their complaint procedures, documentation policies, and make sure that any adverse employment action is supported by legitimate non-discriminatory reasons.

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