DIVIDED FOURTH CIRCUIT PANEL REFUSES TO EXTEND FLSA’S RETALIATION PROTECTIONS TO APPLICANTS

According to a recent decision by a divided panel of the Fourth Circuit, a disappointed applicant cannot sue a prospective employer for retaliation under the FLSA. See Dellinger v. Sci. Applications Int’l Corp., 2011 WL 3528750 (4th Cir. Aug. 12, 2011). In Dellinger, the plaintiff had sued her former employer, alleging minimum wage and overtime violations of the FLSA. She applied for a job with the defendant and was offered a job, pending completion of additional paperwork as well as the successful transfer of her security clearance. The process to transfer plaintiff’s security-clearance required her to disclose any pending civil court actions. Plaintiff identified her FLSA action against her prior employer, and the defendant/prospective employer subsequently withdrew the contingent job offer. Plaintiff sued for retaliation, claiming that the prospective employer refused to hire her because of the lawsuit she filed against her prior employer.

The district court concluded that the FLSA’s anti-retaliation provision does not extend to the prospective employees/employer, and granted the defendant’s motion to dismiss. On appeal, in a divided 2-1 decision, the Fourth Circuit agreed.

The majority decision describes the purpose of the FLSA as “regulating the relationship between employers and their employees….” Id. at *1 (emphasis added). The Act prohibits retaliation in this context, and defines retaliation as discrimination “against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter.” 29 U.S.C. § 215(a)(3). The Court notes that the term “employee” is defined specifically in relation to the employer (“any individual employed by an employer”), which evidenced a Congressional intent to refer to the specific employee-employer relationship. While the plaintiff argued that the FLSA prohibits all “persons” from retaliating against employees, which is broader than just the individual’s present or former employer, the Court held that this fact, while true, does not then authorize employees to file suit against “any person.” Instead, under Section 216(b), only “an employer who violates” certain provisions of the Act shall be liable to the employee. 29 U.S.C. § 216(b) (emphasis added).

After noting that there is no case law to support the extension of the retaliation provision to prospective employers, the Court concludes by warning against an undue expansion of the Act. In essence, the Court expresses the concern with the plaintiff’s theory that any employee who “once in the past sued an employer” would have an automatic cause of action against any future employer with knowledge of the prior action. While the plaintiff pointed to other statutes protecting applicants – the Energy Reorganization Act, National Labor Relations Act (“NLRA”), Occupational Safety and Health Act (“OSHA”), and the Pipeline Safety Improvement Act – the Court distinguishes each. These other Acts (1) are unclear,[1] (2) define the term “employee” differently and/or more broadly than the FLSA,[2] or (3) contain implementing regulations which expand coverage,[3] which the Secretary of Labor has not done with the FLSA.

The Dissent
Circuit Judge King dissented, reasoning that the definition of the term “employee” in the statute is ambiguous and should be interpreted more broadly – akin to the definition of the term “employee” in Title VII – to effectuate the remedial purpose of the statute and deter all employers from retaliating. The dissent relies heavily on the Supreme Court’s decision in Robinson v. Shell Oil Co., 519 U.S. 337, 117 S. Ct. 843, 136 L. Ed. 2d 808 (1997) – a case the dissent refers to as “the definitive authority on statutory construction. In Robinson, the Supreme Court held that the term “employees” in Title VII’s anti-retaliation provisions includes former employees. Justice Thomas, writing for a unanimous Court, concluded that the term “employee” is ambiguous because there is no temporal qualifier (to indicate whether it applies to current or former employees), yet the statute refers to “reinstatement” and “hiring” of employees, which suggests the term applies more broadly than just to current employees. The Supreme Court looked to the purpose of the anti-retaliation provisions and concluded that inclusion of former employees effectuated the remedial purposes of the Act.

The Fourth Circuit majority explained that it would not follow this reasoning from Robinson, because the term “former” employees is distinct from those employees “who are not yet employees and who have never worked for the employer.” Id. at n.2.

Judge King’s dissent also relies on prior Fourth Circuit case law comparing the definitions of the term “employee” as used in the FLSA and in Title VII, including one where the Court referred to the two definitions as “identical.” Darveau v. Detecon, Inc., 515 F.3d 334, 342 (4th Cir. 2008). According to the dissent, the Darveau panel “prophetically” reasoned that “former” employees are entitled to the FLSA’s protections “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.” Dellinger, 2011 WL 3528750, *6 (King, dissenting) (emphasis in original).

The Department of Labor’s Position
Although neither the majority nor the dissent mentions it, the Secretary of Labor and EEOC filed a joint amici curiae brief in support of the plaintiff’s interpretation. According to the DOL, it participated in the appeal as amici because “[i]ndividuals would be reluctant to engage in any protected activity under section 15(a)(3) for fear of being blacklisted by future employers.” Docket No. 23-1 at 2. According to the DOL, the court erred when interpreting the Act by focusing on the word “employee” rather than the phrase “any employee.” Id. at 7. This language is distinct from the language in sections six and seven of the FLSA (29 U.S.C. § 206, 207), which uses the phrase “his employees.”

The DOL acknowledged that the FLSA does not include the same anti-retaliation provisions as Title VII and the ADEA, which expressly include “applicants for employment,” but argued that this was necessitated by the language of those statutes. “Unlike Section 15(a)(3) which prohibits ‘any person’ from retaliating against ‘any employee,’ Title VII and the ADEA more narrowly prohibit ‘an employer’ from retaliating against ‘any of his employees or applicants for employment.’” Id. at 10 (citations omitted).

The DOL also argued that its promulgation of regulations in other anti-retaliation contexts, “consistently interpreting such provisions to cover prospective employees,” should be entitled to Chevron deference. In addition to statutes discussed by the majority and dissent, the DOL’s brief also referred to whistleblower provisions in Sarbanes-Oxley and the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, both of which protect “an employee” from retaliation and both of which “have been interpreted by the Department to include applicants. Id. at 22 (citing 29 C.F.R. § 1980.101 and 29 C.F.R. § 1979.101.)

Conclusion
In Dellinger, the Fourth Circuit held that FLSA retaliation claims may only be brought by individuals against their current or former employer. An extension to prospective employers could have opened up an already litigation-heavy wage-hour environment with additional claims by prior plaintiffs who are unable to secure subsequent employment for legitimate reasons.

Nancy Rafuse – Ashe, Rafuse & Hill, LLP

1 According to the Court, the case law cited by the plaintiff regarding the Energy Reorganization Act “merely assumed, without deciding, that an applicant was covered.” Id. at *4.
2 The NLRA specifically provides that the term “employee” “shall not be limited to the employees of a particular employer” unless otherwise stated. Id.
3 Implementing regulations for both OSHA and the Pipeline Safety Improvement Act extended protections to prospective employees. Id.

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