When a manager voices work-related concerns to company executives, does that constitute a complaint triggering anti-retaliation protection, or is it simply part of his or her job? The Ninth Circuit Court of Appeals recently answered that question in the FLSA context and their decision may surprise you.
FLSA Anti-Retaliation “Fair Notice” Requirement
The Fair Labor Standards Act (FLSA) prohibits employers from retaliating against an employee who has “filed any complaint,” instituted any proceeding, or testified in any proceeding alleging a violation of the FLSA. To determine whether an employee has “filed any complaint” under this anti-retaliation provision, the U.S. Supreme Court has established a “fair notice” test, stating that a complaint must be “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.” In other words, the employer must have fair notice that an employee is making a complaint that could subject the employer to a later claim for retaliation.
Different Standards For Managers and Non-Managers
Most managers are also employees, as defined by the FLSA. That means that managers can be protected by the FLSA anti-retaliation provision. But, in most companies, managers are expected to voice work-related concerns and recommend changes in policies and procedures to their superiors as part of their duties. In fact, managers who are responsible for ensuring that their company comply with applicable laws necessarily need to report potential compliance issues to upper-level executives. Consequently, managers are in a different position when reporting possible FLSA violations to their boss than a front-line employee would be, making it difficult to determine whether a manager’s compliance concerns amount to a “complaint” within the scope of the FLSA anti-retaliation provision.
Numerous other federal appellate courts deciding this issue have formulated a rule that looks at whether the manager stepped outside his or her role of representing the company when making a complaint. In order for the manager to have engaged in protected activity, he or she must have either filed (or threatened to file) an action adverse to the employer, actively assisted other employees in asserting FLSA rights, or otherwise engaged in activities that reasonably could be perceived as directed towards the assertion of rights protected by the FLSA.
The Ninth Circuit (whose decisions apply to many Western states, including Montana,California, Idaho, Nevada, Oregon, and Washington) flatly rejected that rule. Declining to adopt such a bright-line test, the Court ruled that the determination instead rests on a case-by-case analysis, looking to the content and context of the complaint to see whether the employer had fair notice. The fact that a complaining employee is a manager is only one consideration to be included when weighing the content and context of the complaint.
HR Manager Escalated Pay Concerns Prior To Her Termination
In the case before the Ninth Circuit, Alla Rosenfield was hired by GlobalTranz Enterprises as its Manager of Human Resources. Over the next year, the company promoted Rosenfield to Director of Human Resources and later added Director of Corporate Training to her title. Throughout that year, Rosenfield reported to her superiors that the company was not complying with the FLSA.
Specifically, Rosenfield verbally complained to management at least eight times that the company was not in compliance with the FLSA. She raised the subject of FLSA violations in at least 27 weekly and monthly reports to her superiors. On some occasions, she provided copies of the statute and provided specific examples where she believed the company had misclassified a large number of employees. She also requested changes in the payment of wages for those employees.
Rosenfield’s boss disapproved of her complaints. He considered himself the sole person responsible for FLSA compliance and as such, he made it clear to Rosenfield that he did not want or expect her to determine whether the company was in compliance. Five days after Rosenfield documented the company’s non-compliance and complaint to her boss again, he fired her. She sued, alleging that GlobalTranz and its executives had violated the FLSA’s anti-retaliation provision. After the district court granted summary judgment to the employer on the FLSA retaliation claim, she appealed to the Ninth Circuit.
The Ninth Circuit overturned the summary judgment in favor of the company, sending the case back to the lower court to continue proceedings. The Court focused on the fact that because FLSA compliance was not part of Rosenfield’s responsibility, her complaints about FLSA non-compliance and her advocacy for the rights of employees to be paid in accordance with the FLSA could not reasonably have been understood by the company to be merely a part of her regular duties. The Court ruled that a jury could reasonably find that Rosenfield had indeed filed a complaint that triggered FLSA anti-retaliation protection. Rosenfield v. GlobalTranz Enters., Inc., No. 13-15292 (9th Cir. Dec. 14, 2015).
Dissent Would Have Required Manager to Step Outside Role
The three judges on the Ninth Circuit panel did not all agree on the outcome of this case. One judge dissented, disagreeing that the Supreme Court’s “fair notice” test should outweigh the manager test articulated by the other appellate courts. Judge Dee Benson would have required that Rosenfield show that she stepped outside of her role as a manager in doing something adverse to her employer in order to establish that she “filed any complaint” within the meaning of the FLSA anti-retaliation provision.
Treat Internal Complaints With Care
This decision is troubling as it makes it very difficult for employers to know when a supervisor or manager is engaging in protected conduct that may trigger retaliation protection in the future. Take seriously any internal reports by managers related to pay issues and potential FLSA violations. If you intend to take any type of adverse action against a manager, review first whether he or she has any reported FLSA concerns so you may evaluate the risk that your action will be deemed retaliatory.