HR Director's Warnings May Constitute A Complaint Under the FLSA's Anti-Retaliation Provision: Ninth Circuit | Practical Law

HR Director's Warnings May Constitute A Complaint Under the FLSA's Anti-Retaliation Provision: Ninth Circuit | Practical Law

In Rosenfield v. Global Tranz Enterprises, Inc., the US Court of Appeals for the Ninth Circuit held that an employee's managerial role is only one consideration courts should apply to determine whether that employee engaged in protected activity under the anti-retaliation provision of the Fair Labor Standards Act (FLSA). The court refused to apply a bright-line rule for managers, finding in this case that an employer had fair notice that a human resources manager's activities and statements about the employer's lack of compliance with the FLSA were "complaints" entitled to FLSA protection.

HR Director's Warnings May Constitute A Complaint Under the FLSA's Anti-Retaliation Provision: Ninth Circuit

by Practical Law Labor & Employment
Published on 31 Dec 2015 • USA (National/Federal)
In Rosenfield v. Global Tranz Enterprises, Inc., the US Court of Appeals for the Ninth Circuit held that an employee's managerial role is only one consideration courts should apply to determine whether that employee engaged in protected activity under the anti-retaliation provision of the Fair Labor Standards Act (FLSA). The court refused to apply a bright-line rule for managers, finding in this case that an employer had fair notice that a human resources manager's activities and statements about the employer's lack of compliance with the FLSA were "complaints" entitled to FLSA protection.
On December 14, 2015, in Rosenfield v. Global Tranz Enterprises, Inc., the US Court of Appeals for the Ninth Circuit held in a 2-1 decision that an employee's managerial role is only one consideration courts should apply to determine whether an employee engaged in protected activity under the FLSA's anti-retaliation provision. ( (9th Cir. Dec. 14, 2015).)

Background

Alla Rosenfield worked as Human Resources Manager and ultimately as Human Resources Director for GlobalTranz. Throughout her employment Rosenfield reported to her superiors that GlobalTranz was not in compliance with the FLSA, including:
  • Complaining orally to management multiple times.
  • Pointing out that specific employees were misclassified for overtime purposes.
  • Raising FLSA violations in various weekly and monthly reports she submitted to her superiors.
Rosenfield was not responsible for ensuring GlobalTranz's compliance with the FLSA. As a result, Rosenfield's boss disapproved of Rosenfield's activities. In May 2011, shortly after Rosenfield again complained to her boss about GlobalTranz not complying with the FLSA, GlobalTranz terminated Rosenfield.
Rosenfield sued GlobalTranz in US district court, alleging that GlobalTranz violated the FLSA's anti-retaliation provision. The district court granted summary judgment to GlobalTranz, finding that Rosenfield:
  • Advocated as a manager on behalf of other employees whose rights she believed were being violated.
  • Did not file any complaint within the meaning of the FLSA's anti-retaliation provision.
Rosenfield appealed to the Ninth Circuit.

Outcome

The Ninth Circuit reversed the district court's grant of summary judgment to GlobalTranz, holding in a 2-1 decision that:
  • An employee's managerial role is only one consideration for determining whether an employee has "filed any complaint" under the FLSA's anti-retaliation provision.
  • No bright-line rule should be applied for determining whether a manager's FLSA-related complaint is entitled to protection in an FLSA retaliation case.
The Ninth Circuit majority noted that:
  • The FLSA's anti-retaliation provision prohibits employers from terminating employees for "filing any complaint" related to FLSA rights (29 U.S.C. § 215(a)(3)).
  • Employers must have "fair notice" that an employee is making a complaint that could later subject the employer to an FLSA retaliation claim (Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 13 (2011)).
  • The US Supreme Court has held that the "filing any complaint" language requires that an employee's complaint be sufficiently clear and detailed for a reasonable employer to understand it both in content and context as:
    • an assertion of FLSA rights; and
    • a call for FLSA rights to be protected.
(Kasten, 536 U.S. at 14.)
  • Some circuit courts have adopted a "fair notice" rule specifically applicable to managers in which engaging in protected activity under the FLSA requires a manager to step outside her role as the employer's representative and either:
    • file or threaten to file an action against the employer;
    • assist other employees with asserting their FLSA rights; or
    • engage in activities that an employer could reasonably perceive as an assertion of FLSA-protected rights.
(McKenzie v. Renberg's, Inc., 94 F.3d 1478, 1486-87 (10th Cir. 1996).)
  • Both the US Secretary of Labor and the EEOC take the position that the general fair notice rule applied by the US Supreme Court in Kasten and the manager rule applied by circuit courts are different rules.
The Ninth Circuit majority:
  • Declined to adopt a bright-line rule for when managers engage in protected activity in an FLSA retaliation case.
  • Applied the general fair notice rule from Kasten.
The Ninth Circuit found that:
  • The fair notice rule and the manager rule are consistent because they each require courts to consider the content and context of an employee's FLSA-related complaint.
  • Refining Kasten's general fair notice rule with a rule specifically applicable to managers would obscure the reality that managers have different types of roles and responsibilities, with only some managers having responsibility for FLSA compliance.
  • When a manager is responsible for the employer's compliance with the FLSA, the manager's report to management that the employer is not in compliance typically does not put the employer on notice that the employee is making a complaint under the FLSA's anti-retaliation provision.
  • Because Rosenfield was not responsible for ensuring GlobalTranz's compliance with the FLSA, GlobalTranz reasonably should have understood Rosenfield's activities were complaints under the FLSA's anti-retaliation provision.
The dissenting judge noted that:
  • The majority's decision resulted in giving more FLSA protection to managers than non-managers.
  • Rosenfield did not file a complaint within the meaning of the FLSA's anti-retaliation provision because she did not:
    • step outside of her managerial role; and
    • take any action that put her in an adverse position from GlobalTranz.
The Ninth Circuit remanded to the district court.

Practical Implications

Rather than adopt a bright-line rule for managers, the Ninth Circuit's decision in Rosenfield adopts a case-by-case approach to determining whether a manager's internal FLSA-related complaint sufficiently places an employer on notice that the employee is making a complaint on which to later premise an FLSA retaliation claim. The Ninth Circuit applies the fair notice test from Kasten to examine the content and context of the complaint, with the manager's managerial role only one factor to be considered. Employers in the Ninth Circuit should specifically avoid taking adverse action against a manager who is not directly responsible for ensuring the employer's compliance with the FLSA and who makes complaints or raises issues or concerns about the employer's compliance with the FLSA.
Employers should:
  • Avoid taking adverse actions against employees (both managerial and non-managerial) who complain about the employer's lack of FLSA compliance or raise issues related to the FLSA.
  • Document and investigate employees' FLSA-related complaints or concerns.
  • Remedy FLSA-related violations immediately.