On April 20, 2015, the Second Circuit overruled its existing precedent and held that oral complaints of FLSA violations, made internally to a supervisor, can form the basis for a retaliation claim under Section 215 of the FLSA.  Previously under Circuit law, an employee had to complain in writing, and to a government agency, in order to bring an FLSA retaliation claim.

Epitomizing the adage “bad facts make bad law,” here’s what happened in Greathouse v. JHS Security, Inc., according to the court:

“On October 14, 2011, Greathouse complained to [JHS’s President] Wilcox that he had not been paid in several months.  Wilcox responded, ‘I’ll pay you when I feel like it,’ and, without warning, drew a gun and pointed it at Greathouse….  Greathouse understood that response as ending his employment with JHS.”

FLSA section 215(a)(3) makes it unlawful “to discharge or in any other manner discriminate against any employee because such employee has filed any complaint . . . related to” the FLSA

In 2001, the U.S. Supreme Court (in Kasten v. Saint-Gobain Performance Plastics Corp.) held that “any complaint” encompasses oral as well as written complaints, so long as the complaint is “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights [under the FLSA].”  Kasten didn’t address whether an internal complaint to a supervisor, as opposed to a complaint to the government, would suffice.  It does now, according to the Second Circuit.

The decision is in harmony with those of nine other federal courts of appeal that have held or assumed that internal complaints are covered under FLSA section 215.

What isn’t a covered complaint? 
Context matters, according to the Second Circuit.  A “grumble in the hallway about an employer’s payroll practice” likely won’t suffice.  “Some degree of formality” is required, although the employee “need not invoke the [FLSA] by name.”  A complaint will likely be deemed sufficient “where the recipient has been given fair notice that a grievance has been lodged,” or where “a reasonable, objective person would have understood the employee to have put the employer on notice that the employee is asserting statutory rights.”

Practical takeaways?
Employers must remain especially mindful of internal complaints regarding unpaid wages or questionable pay practices, just as they would for complaints about employment discrimination or harassment.  Because first-line managers are usually the ones to receive such complaints, employers need to train them on the proper reaction and reporting mechanism.  And anti-retaliation policies should protect employees who complain about FLSA violations (as well as state law wage and hour violations, where appropriate).

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Photo of Allan Bloom Allan Bloom

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages…

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages, employment discrimination, breach of contract and wrongful discharge, both at the trial and appellate court levels as well as in arbitration. He has secured complete defense verdicts for clients in front of juries, as well as injunctions to protect clients’ confidential information and assets.

As the leader of Proskauer’s Wage and Hour Practice Group, Allan has been a strategic partner to a number of Fortune 500 companies to help them avoid, minimize and manage exposure to wage and hour-related risk. Allan’s views on wage and hour issues have been featured in The New York TimesReutersBloomberg and Fortune, among other leading publications. His class-action defense work for clients has saved hundreds of millions of dollars in potential damages.

Allan is regularly called on to advise boards of directors and senior leadership on highly sensitive matters such as executive transitions, internal investigations and strategic workforce planning. He also has particular expertise in the financial services industry, where he has litigated and arbitrated cases, including at FINRA and its predecessors, for more than 20 years.
A prolific author and speaker, Allan was the Editor of the New York State Bar Association’s Labor and Employment Law Journal from 2012 to 2017. He has served as an author, editor and contributor to a number of leading treatises in the field of employment law, including ADR in Employment Law (ABA/Bloomberg BNA, Senior Editor), Employment Discrimination Law (ABA/Bloomberg BNA, Final Proof Editor), Cutting Edge Advances in Resolving Workplace Disputes (Cornell University/CPR, Editor), The Employment Law Review (Law Business Research, U.S. Chapter Author), and The Complete Compliance and Ethics Manual (SCCE, Chapter Author).

Allan is a member of the NYSBA’s House of Delegates, sits on the Executive Committee of the NYSBA’s Labor and Employment Law Section, and is a Fellow of the College of Labor and Employment Lawyers. He has been recognized as a leading practitioner by Chambers since 2011.