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).