In a split decision, the Ninth Circuit Court of Appeals has declined to adopt a bright-line rule to assess whether a managerial employee has filed a complaint for the purposes of § 215(a)(3) of the Fair Labor Standards Act (“FLSA”), the statute’s anti-retaliation provision. The decision, Rosenfield v. GlobalTranz Enterprises, appears to highlight a disagreement among the Circuits.
At least four Circuit Courts – the First, Fifth, Sixth and Tenth – have adopted a manager-specific legal standard: in order to engage in protected activity under § 215(a)(3), the employee must step outside his or her role of representing the company and either file (or threaten to file) an action adverse to the employer, actively assist other employees in asserting FLSA rights, or otherwise engage in activities that reasonably could be perceived as directed towards the assertion of rights protected by the FLSA. Declining to adopt such a standard, the Ninth Circuit has opted to follow a generalized “fair notice” standard, ruling that a complaining employee’s position as a manager is only one contextual element for a fact-finder to consider.
In Rosenfield, a former Director of Human Resources alleged that her employer fired her for complaining to other managers and executives about alleged FLSA violations. The issue before the Ninth Circuit was whether managerial employees must step outside of their roles representing the company in order to be considered to have engaged in protected activity under § 215(a)(3), by either filing (or threatening to file) an action adverse to the employer, actively assisting other employees in asserting FLSA rights, or otherwise engaging in activities that reasonably could be perceived as directed towards the assertion of rights protected by the FLSA. In addition to considering arguments presented by the parties, the Ninth Circuit solicited the views of the Department of Labor and the Equal Opportunity Commission.
In Rosenfield, both the majority and dissent agreed that managers are necessarily in a different position vis-à-vis the employer than are rank-and-file employees because their employer expects them to voice work-related concerns and to suggest changes in policy. The majority went so far as to acknowledge that while an employer “almost certainly” would understand a report made by an entry-level employee that someone is underpaid in violation of the FLSA as a “complaint,” a reasonable employer would not necessarily recognize as a “complaint” an identical report made by a manager tasked with ensuring the company’s compliance with the FLSA. Rather, the employer would understand the manager to be simply carrying out his or her duties.
While other Circuits have adopted a manager-specific legal standard that requires a managerial employee to step out of his or her role of representing the company by becoming adverse to his or her employer in some way in order to file a “complaint” under § 215(a)(3), the Ninth Circuit has concluded that such a bright-line rule is unnecessary. Instead, it concluded that the “fair notice” test articulated by the U.S. Supreme Court in a 2011 decision provides adequate guidance for considering an employee’s status as a “manager” as one of several important factors. In addition, the Ninth Circuit held that a narrower rule fails to account for varying levels of managers. Specifically, “[a] different perspective on fair notice may apply as between a first level manager who is responsible for overseeing day-to-day operations and a high-level manager who is responsible for insuring the company’s compliance with the FLSA. Refining the general rule to focus on only one specific factual element may obscure important nuances.”
Applying the fair notice test to the facts, the Ninth Circuit reversed the District Court’s decision granting summary judgment in favor of GlobalTranz and found that a reasonable jury could find that the plaintiff’s advocacy reached the requisite degree of formality to constitute protected activity under § 215(a)(3).
While the Supreme Court may eventually weigh in on the split between the Circuits, it remains as important as ever for employers in all Circuits to take all reports of FLSA violations seriously, regardless of whether they are made by managerial or non-managerial employees.