Supreme Court Rules Oral Complaints Covered By FLSA’s Anti-Retaliation Provision

On March 22, 2011, with Justice Breyer writing for the majority, the United States Supreme Court held that oral, and not only written, complaints are covered by the anti-retaliation provision of the Fair Labor Standards Act (“FLSA”). The 6-2 decision (Justices Scalia and Thomas dissented, and Justice Kagan recused herself) settled a split among circuits as to whether FLSA’s anti-retaliation provision requiring that an employee “file any complaint” in order to invoke its protections covers oral as well as written complaints.

The petitioner in the case, Kevin Kasten, a former employee of Saint-Gobain Performance Plastics Corp., sued his employer claiming that he was improperly terminated after orally complaining that the placement of time clocks in the workplace did not properly ensure that employees were paid for time spent donning and doffing their protective gear. Kasten alleged that his termination was in violation of FLSA.

The U.S. District Court for the Western District of Wisconsin dismissed the complaint on the grounds that Kasten’s oral complaint did not fall within the statutory language of FLSA’s anti-retaliation provision. The Seventh Circuit affirmed the dismissal.

The Supreme Court, in vacating the Seventh Circuit’s decision, first looked at the statutory language at issue and determined that the term “filed” did not necessarily exclude the possibility of oral complaints. Nevertheless, determining that the textual analysis did not conclusively resolve the question, the Court went on to look at the “functional considerations” behind the provision. It found that, in enacting FLSA, Congress did not intend to limit its scope to written complaints. To do so would create a roadblock for “illiterate, less educated, and overworked workers” who frequently need FLSA’s protections the most.

Importantly, while the Court held that oral complaints are covered by FLSA’s anti-retaliation provision, it did not eliminate the need for some degree of formality. The Court explained that there is a “fair notice” requirement, such that the anti-retaliation provision may be invoked only in cases where the complaint is sufficiently clear and detailed so that the employer receives “fair notice” of it.

While resolving the circuit split on the issue of oral complaints, the Court left open a related question – also the subject of a split among the circuits – namely, whether or not the anti-retaliation provision applies to complaints made to private employers or only to those made to the government. The Court declined to settle the question because the claim was not raised by Saint-Gobain in its response to the petition for certiorari.

The impact of the Supreme Court’s Kasten decision has yet to be seen, but employers should proceed carefully and take precautions to address their complaint procedures, both oral and written, so as to be well-equipped to handle any such grievances in accordance with FLSA.

A big “thank you” to BRR intern Hannah Lubin for putting this post together!

Supreme Court Upholds “Cat’s Paw” Discrimination Theory

In Staub v. Proctor Hospital (09-400) (slip opinion here), the United States Supreme Court today unanimously upheld the “cat’s paw” theory of discrimination in a case brought under the Uniformed Services Employment and Reemployment Rights Act (USERRA). As a result, employers may now be more vulnerable to discrimination claims brought under USERRA, Title VII, and other statutes that prohibit workplace discrimination.

The “cat’s paw” theory derives from an Aesop’s fable in which an enterprising monkey persuades a cat to retrieve chestnuts roasting on an open fire. The monkey then makes off with the chestnuts, leaving the cat with nothing but its blackened paws. In the employment context, the theory refers to the situation in which the official who actually takes the adverse action against an employee (for example, the HR manager) acts without any personal discriminatory animus, but is influenced by another manager or supervisor who harbors discriminatory animus against the employee. Under these circumstances, the HR manager is the cat, while the underlying supervisor is the monkey.

In Staub, the employee worked as a technician at Proctor Hospital in Peoria, Illinois. He was also in the Army Reserve, which caused him to miss considerable time from work. His absences did not sit well with his supervisors, who – according to the evidence adduced at trial – disparaged his military service and wanted to get rid of him. After the vice president of HR terminated him, Staub sued the hospital under USERRA, claiming that the VP was influenced by the supervisors’ anti-military animus. A jury found in Staub’s favor, but the Seventh Circuit reversed the verdict on the ground that in a cat’s paw case, the plaintiff cannot succeed unless the nondecision-maker (i.e., Staub’s supervisors) exercised such “singular influence” over the decisionmaker (i.e., the VP of HR) that the decision was the product of “blind reliance.” The Seventh Circuit failed to find such singular influence.

USERRA prohibits discrimination based upon a person’s membership in or obligations to a uniformed service. 38 U.S.C. § 4311(a). An employer violates USERRA “if the person’s membership … is a motivating factor in the employer’s action, unless the employer can prove that the action would have been taken in the absence of such membership.” § 4311(c). The “central difficulty” facing the Staub Court was construing the phrase “motivating factor in the employer’s action.” The hospital argued that it could not be liable unless the de facto decisionmaker (i.e., the VP of HR) was motivated by discriminatory animus. Because there was no evidence that the VP harbored her own animus against Staub, the hospital contended that it could not be liable under USERRA.

The Court rejected the hospital’s argument, relying instead on long-established principles of tort law, under which “it is axiomatic … that the exercise of judgment by the decisionmaker does not prevent the earlier agent’s action (and hence the earlier agent’s discriminatory animus) from being the proximate cause of the harm.” The Court then held that “if a supervisor performs an act motivated by [discriminatory] animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.” Applying this holding to the facts of the case, the Court found that there was sufficient evidence for the jury to have concluded that Staub’s supervisors were motivated by their anti-military animus toward him and that their actions were causal factors underlying the VP of HR’s decision to terminate him.

While this case was decided under USERRA, the Court noted the statute’s similarity to Title VII. Therefore, it is by no means a stretch to assume that the cat’s paw theory will be extended to discrimination claims based upon sex, race, age, and other protected categories. Employers are encouraged to redouble their training efforts to insure that all levels of management are instructed on what constitutes unlawful discrimination.