In yet another decision that potentially expands the scope of liability employers face for retaliation claims, the U.S. Supreme Court held on March 22, 2011, that the Fair Labor Standards Act's (FLSA) prohibition on retaliating against employees who “file” an FLSA complaint applies to employees who make oral complaints about minimum wages or overtime pay. Kasten v. Saint-Gobain Performance Plastics Corp., No. 09-834 (March 22, 2011). But the Court declined to address whether an oral complaint made only to a private employer, as opposed to a government agency, is sufficient to trigger retaliation protection, leaving employers with a potential argument against retaliation claims.

Background

The FLSA, the federal statute that establishes the federal minimum wage, maximum hour and overtime pay rules, forbids employers:

to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the Act], or has testified or is about to testify in such proceeding, or has served or is about to serve on an industry committee.

Federal courts have divided on two issues regarding the retaliation protection for employees who “file” any complaint, however: (1) whether the complaint must be “filed” with a government agency, or whether a complaint to the employer is sufficient to trigger retaliation protection; and (2) whether an oral complaint about wages or hours satisfies the requirement that the employee “file” a complaint.

The Kasten case presented both issues. During his employment with Saint-Gobain Performance Plastics, Kevin Kasten orally complained to the company, but not to the federal government, that the placement of the company’s time clocks prevented employees from receiving pay for the time they spent putting on and taking off work-related protective gear. When he was discharged shortly after this complaint, he sued, asserting that he had been fired because he complained to his employer about his hours and overtime pay, in violation of the FLSA’s anti-retaliation provision.

Saint Gobain’s argument was that Kasten could not sue for retaliation because the FLSA retaliation provision requires a complaint to the government and does not apply to merely oral complaints. The District Court dismissed Kasten’s claim. The United States Court of Appeals for the Seventh Circuit affirmed, reasoning that a complaint to the employer is sufficient to trigger FLSA retaliation protection, but that the complaint must be in writing; an oral complaint, such as Kasten's, was insufficient.

The Supreme Court Decision

Reversing the Seventh Circuit, a six-member majority of the Supreme Court ruled that an oral complaint is sufficient to satisfy the FLSA’s requirement that the employee “file” a complaint. The Court concluded that although the word “filed” may suggest that the complaint must have “some degree of formality,” it does not require that the complaint be in writing to receive retaliation protection. If an oral 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 protected by the statute and a call for their protection,” it may be protected under the FLSA, the Court wrote.

At the same time, the Court declined to resolve whether the FLSA retaliation provision protects employees who complain to private employers or only covers those who file complaints with the government, because Saint-Gobain had failed to follow the proper procedure to present that claim. That meant the Seventh Circuit's ruling that a complaint to the employer is sufficient remained undisturbed.

What Does Kasten Mean for Employers?

The Court’s decision that an oral complaint is sufficient to support an FLSA retaliation claim expands potential liability and creates uncertainty. Employers can no longer assume that an employee is not protected by the FLSA’s retaliation provision simply because he or she did not file a written complaint. But what is a sufficient oral complaint? Would it be enough for an employee merely to mention a concern to a supervisor while passing in the hall? Maybe not. The Kasten decision seems to require some level of formality: the oral complaint must be “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context,” as requesting that an employee’s rights under the FLSA be honored. But it seems unlikely that the employee will be required to specifically mention the FLSA: a complaint to Human Resources that “I worked 52 hours last week, but I didn’t get paid any overtime,” will almost certainly qualify for protection against retaliation. Employers must wait for lower courts to more specifically define when an oral complaint is sufficient to trigger FLSA retaliation protection.

The Court's decision not to address whether complaints to employers are sufficient leaves that argument available to employers in the future. Employers should not rely on this argument to take adverse action against an individual who makes an oral FLSA complaint, but should consider raising it in response to an FLSA retaliation claim.

In addition, employers would be wise to train all supervisors about the FLSA’s anti-retaliation protections, including the fact that an oral complaint may make the employee protected from retaliation. Moreover, given the significant number of FLSA class actions, supervisors should be trained to immediately transmit any complaints about wage and hour issues to Human Resources or the legal department so they can be evaluated and appropriate corrective action taken. More generally, employers would be wise to create and publicize a formal mechanism allowing employees to complain about wage and hour issues, both to nip potential wage and hour problems in the bud and to limit the risk of vague complaints creating the basis for retaliation claims.