On January 27, 2012, the US Court of Appeals for the Fourth Circuit issued an opinion in Minor v. Bostwick Laboratories, Inc., reversing the district court's dismissal of an employee's anti-retaliation claim under the FLSA. The key issue in the case was whether an employee's oral complaint that is lodged with her employer, rather than with a court or government agency, triggers the protection of the FLSA's anti-retaliation provisions.

Section 215(a)(3) of the FLSA makes it unlawful for an employer to discharge or otherwise discriminate against any employee because the employee has filed any complaint or instituted or caused to be instituted any proceeding under the FLSA, or has testified or is about to testify in any such proceeding (29 U.S.C. § 215(a)(3)).

Kathy Minor brought an action alleging that her employer, Bostwick Laboratories, terminated her shortly after a meeting with the company's chief operating officer at which she complained that her supervisor was altering employees' time sheets to eliminate overtime in violation of the FLSA. Although the officer agreed to investigate Minor's concerns, the company fired her less than one week later. Minor argued that her termination was in retaliation for engaging in activity protected under the FLSA.

The district court granted the employer's motion to dismiss, finding that informal, intracompany complaints do not qualify as protected activity under the FLSA. Based on a reading of the statute as a whole, the district court concluded that only formal, official proceedings qualify for protection under the FLSA's anti-retaliation provision. Minor appealed.

The Fourth Circuit reversed the district court, holding that intracompany complaints may constitute protected activity under the FLSA. The court acknowledged that the statutory language, which protects employees who have "filed any complaint," was ambiguous as to whether intracompany complaints were protected. However, the court concluded that functional considerations required a broad construction of the statute, finding that US Supreme Court decisions, including the recent case of Kasten v. Saint-Gobain Performance Plastics Corp., have consistently held that the FLSA should not be interpreted narrowly, but in a manner consistent with its purposes.

The court found that limiting the FLSA's retaliation protections to formal complaints made before a judicial or administrative body would contradict the remedial purposes of the statute by discouraging informal workplace grievance procedures and encouraging employers to fire employees before they file complaints. Further, the court noted, the majority of circuits have concluded that intracompany complaints constitute protected activity under the FLSA.

However, the court noted that not all intracompany complaints are protected. Citing Kasten, the court held that, to protect employers from uncertainty, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it as an assertion of FLSA rights and a call for their protection. Under this standard, Minor's allegations of the meeting with the chief operating officer were sufficient to survive a motion to dismiss. The court expressed no view as to whether Minor should ultimately prevail, on remand, under this standard.

The court distinguished this case from its earlier holding in Ball v. Memphis Bar-B-Q Co., Inc., in which the court held that an employee's refusal to testify for his employer in a threatened lawsuit was not protected activity under the FLSA since no formal proceeding had begun. In Ball, the court noted, at issue was the FLSA's testimony clause, rather than, as here, the clause pertaining to the filing of complaints. Accordingly, the court found that Ball did not resolve the question of whether intracompany complaints could constitute protected activity under the complaint clause.

The Fourth Circuit joins eight other circuits in concluding that intracompany complaints may be protected under the FLSA. Until this decision, given the court's prior decision in Ball, it was unclear whether the Fourth Circuit sided with the majority or minority.

Various circuit courts have used differing rationales to reach different conclusions as to whether an intracompany complaint is a FLSA-protected activity, including:

In light of the court's decision, employers in the vast majority of circuit courts of appeals should be aware that an employee's allegations of FLSA violations may be protected under the FLSA's anti-retaliation provisions even where they are: