Fourth Circuit, decision on retaliatory lawsuits

The Fourth Circuit issued a good FLSA retaliation decision, addressing whether a lawsuit filed by the employer against the employee after the employee asserted his statutory rights (here, for overtime pay), could constitute retaliation. Although the Fourth Circuit found that plaintiff's underlying FLSA claim was properly dismissed since he fell into the administrative exception under the statute, the court squarely rejected the employer's assertion that a lawsuit filed against a former employee could not constitute retaliation. The Fourth Circuit found that it was an adverse employment action, in part because it affected the former employee's ability to obtain job references from his former employer, and that the lawsuit would otherwise be a black mark on him. The Fourth Circuit also explains that case law under Title VII's anti-retaliation statute is equally applicable to the FLSA anti-retaliation statute.

The decision is online at the link below, and some excerpts follow:

http://pacer.ca4.uscourts.gov/dailyopinions/opinion.pdf/062092.P.pdf 

Darveau v. Detecon, Inc., No. 06-2092 (4th Cir. Jan. 31, 2008)

Before MOTZ and GREGORY, Circuit Judges, and Henry F. FLOYD, United States District Judge for the District of South Carolina, sitting by designation.

Affirmed in part and reversed and remanded in part by published opinion. Judge Motz wrote the opinion, in which Judge Gregory and Judge Floyd joined.

COUNSEL

ARGUED: Harris D. Butler, III, BUTLER, WILLIAMS & SKILLING, P.C., Richmond, Virginia, for Appellant. John Francis Scalia, GREENBERG & TRAURIG, L.L.P., McLean, Virginia, for Appellee.

ON BRIEF: William C. Tucker, BUTLER, WILLIAMS & SKILLING, P.C., Richmond, Virginia, for Appellant. Matthew H. Sorensen, GREENBERG & TRAURIG, L.L.P., McLean, Virginia, for Appellee.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

After Detecon, Inc., a small wireless telecommunications consulting company, discharged one of its officers, Larry Darveau, he brought this action, alleging that Detecon had not paid him overtime in violation of the Fair Labor Standards Act of 1938 ("FLSA" or the "Act"), 29 U.S.C. § 207 (2000). Fifteen days later, Detecon filed a fraud suit in state court against Darveau. Darveau then amended his complaint in this case to allege that Detecon's lawsuit constituted an illegal retaliatory action under 29 U.S.C. § 215(a)(3) (2000) of the FLSA. The district court dismissed Darveau's retaliation claim for failure to state a cause of action, and the court granted summary judgment to Detecon on Darveau's remaining claims. We affirm in part and reverse and remand in part.

. . . . Darveau notes that the Supreme Court has expressly held that a lawsuit filed by an employer against an employee can constitute an act of unlawful retaliation under another federal statute governing employment rights when the lawsuit is filed with a retaliatory motive and lacking a reasonable basis in fact or law. See Bill Johnson's Rests. v. NLRB, 461 U.S. 731, 744 (1983); see also BE & K Constr. Co. v. NLRB, 536 U.S. 516, 528-37 (2002) (affirming Bill Johnson's holding, stressing that only those lawsuits that are retaliatory in intent and baseless in fact or law do not implicate First Amendment and federalism concerns). Darveau's complaint alleges Detecon filed its lawsuit with retaliatory motive and without any reasonable basis in fact or law.

. . . But we find no significant differences in either the language or intent of the two statutes [[Title VII and FLSA]] regarding the type of adverse action their retaliation provisions prohibit. The FLSA and Title VII contain identical general definitions of "employee." Compare 29 U.S.C. § 203(e)(1) (2000) (FLSA) with 42 U.S.C. § 2000e(f) (2000) (Title VII); see also United States v. Rosenwasser, 323 U.S. 360, 362 (1945) (declaring with regard to the FLSA that "[a] broader or more comprehensive coverage of employees within the stated categories would be difficult to frame."). Moreover, both statutes provide the same broad definition of a prohibited retaliatory act; each statute renders it unlawful to "discriminate against" any employee who has engaged in the described protected activities. Compare 29 U.S.C. § 215(a)(3) (FLSA) with 42 U.S.C. § 2000e-3(a) (2000) (Title VII). The similar statutory language suggests that the Supreme Court's interpretation of "employee" in Robinson - to include former as well as current employees - and definition of retaliatory acts in Burlington Northern similarly apply in the FLSA context.

. . . Somewhat surprisingly, Detecon contends that looking to the Supreme Court's Title VII jurisprudence in this FLSA case will generate the "anomalous result" of extending protection from retaliation to former employees who no longer enjoy the substantive protections of the FLSA. Br. of Appellee at 50. Yet in Burlington Northern, the Court rejected this very argument in the Title VII context, observing that Title VII's anti-retaliation provision serves a different purpose than its substantive provisions and that such "differences in . . . purpose . . . remove any perceived 'anomaly.'" 126 S. Ct. at 2414. The more unfortunate anomaly would be if an employee's underlying FLSA claim could be brought after he quit, but the employee's protection from retaliation ended when the employee stepped beyond the employer's doorstep.

Our conclusion accords with that reached by our sister circuits. The Tenth Circuit has held that an employer's third-party complaint for indemnity against four former employers could, as a matter of law, qualify as unlawful retaliation under the FLSA. Martin v. Gingerbread House, Inc., 977 F.2d 1405, 1406-08 (10th Cir. 1992). Similarly, the Sixth Circuit has concluded that the FLSA retaliation provision should extend to former employees: "There is nothing in the language or history of [the FLSA] to indicate that Congress intended to penalize dissatisfied employees who voluntarily leave an employer by thereafter denying them the protections of [the Act]. There is every reason to conclude precisely the contrary." Dunlop v. Carriage Carpet Co., 548 F.2d 139, 147 (6th Cir. 1977). The Fifth Circuit has likewise recognized that the FLSA protects former employees from retaliation, and not merely current ones. Hodgson v. Charles Martin Inspectors of Petroleum, Inc., 459 F.2d 303, 306 (5th Cir. 1972). Former employees require such protection because they often need references from past employers, they may face retaliation from new employers who learn they have challenged the labor practices of previous employers, and they sometimes must return to past employers for a variety of reasons, putting them once more at risk of retaliation. Id.

For all these reasons, we hold that the district court clearly erred in requiring Darveau to allege that his employer retaliated against him with a "materially adverse employment action." Rather, a plaintiff asserting a retaliation claim under the FLSA need only allege that his employer retaliated against him by engaging in an action "that would have been materially adverse to a reasonable employee" because the "employer's actions . . . could well dissuade a reasonable worker from making or supporting a charge of discrimination." Burlington Northern, 126 S. Ct. at 2409. Darveau has alleged such an action here, i.e., that his employer filed a lawsuit against him alleging fraud with a retaliatory motive and without a reasonable basis in fact or law. We therefore must reverse the judgment of the district court dismissing Darveau's retaliation claim and remand for further proceedings consistent with this opinion.

Alan R. Kabat (Bernabei & Wachtel, PLLC)