FLSA Complaint Must be in Writing, Rules 3d DCA

Third District Court of AppealsBy Richard Tuschman

Defense lawyers whose clients are sued in Florida state court under the Fair Labor Standards Act typically remove the cases to federal court.  And for good reason:  employers generally have a better chance of obtaining a summary judgment in federal court. 

But defense lawyers may want to rethink this strategy in FLSA retaliation cases in light of a recent decision by the Third District Court of Appeals, Alvarado v. Bayshore Grove Management, LLC, Case No. 3D09-3332 (Fla. 3d DCA, October 6, 2006). 

In Alvarado, the plaintiff alleged that he had made oral complaints to his employer about his compensation and that he was terminated as a result in violation of the FLSA's anti-retaliation provision, 29 USC §215(a)(3).  This provision makes it unlawful "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 this chapter...."  Citing the Seventh Circuit Court of Appeals' decision in Kasten v. Saint-Gobain Performance Plastics Corp., 570 F.3d 834, 838-40 (7th Cir. 2009), the Third DCA affirmed the trial court's dismissal of the retaliation claim, holding that "the very meaning of the word 'filed' requires that the aggrieved employee at least submit something in writing." 

As the Seventh Circuit noted in Kasten, the Eleventh Circuit Court of Appeals reached a different conclusion in EEOC v. White & Son Enters., 881 F.2d 1006, 1011 (11th Cir.1989).  There, the Eleventh Circuit held that given the FLSA's "remedial purpose," an oral complaint is protected activity under the Equal Pay Act (which is part of the FLSA).  White & Son is binding on federal district courts in the Eleventh Circuit. See, e.g., Dees v. Rsight, Inc., Case No. 6:05-cv-1923-Orl-DAB, 2006 U.S. Dist. LEXIS 92860 (M.D. Fla. Dec. 22, 2006) (citing White & Son for the proposition that "the Eleventh Circuit has held that unofficial oral complaints by employees to their employer can constitute protected activity under the FLSA"). 

The lesson of Alvarado and White & Son is clear:  Employers who are sued in state court on an FLSA retaliation claim based on an oral complaint should keep the case in state court so they can argue that the complaint was not protected activity.  In any trial court within the Third DCA, this argument should be a winner.  In trial courts outside the Third DCA, at least the employer has a fighting chance on this argument; Alvarado is not binding but is persuasive authority.  Once the case is removed to federal court, White & Son controls, so the employer better be prepared to assert a different defense to the plaintiff's retaliation claim.

UPDATE:  Four days after this post, the United States Supreme Court held oral argument on this issue in Kasten.  You can hear the argument here.  Several justices sounded skeptical about the employee's attorney's argument that an oral complaint to an employer can constitute the "filing" of a complaint under the FLSA.  Assuming the Supreme Court resolves this precise issue, all federal and Florida courts will be bound by its decision. In that case, the apparent split between the Third DCA and the Eleventh Circuit will be moot.





SOX Whistleblower Must Actually Believe Employer's Conduct Was Illegal, Says Eleventh Circuit

An employee claiming whistleblower protection under the Sarbanes-Oxley Act must have actually believed that his company’s conduct was illegal in order to state a claim under the Act, according to a recent decision by the Eleventh Circuit Court of Appeals, Gale v. U.S. Department of Labor, Case No. 08-14232 (11th Cir., June 25, 2010).

The case arose when Michael Gale was terminated from his employment at World Financial Group (“WFG”). Gale filed a whistleblower complaint with the Occupational Safety and Health Administration, which enforces the SOX whistleblower provisions. Gale alleged that he was terminated because he opposed decisions made by company officers relating to waste and misuse of corporate funds, and because he raised concerns regarding the alleged violation of SEC rules and regulations. 

Under SOX, a publicly traded company and its officers are prohibited from discharging an employee for providing information to a supervisory authority about conduct that the employee “reasonably believes” constitutes a violation of federal laws against mail fraud, wire fraud, bank fraud, securities fraud, any SEC rule or regulation, or any provision of federal law relating to fraud against shareholders. 18 U.S.C. § 1514A(a)(1). 

OSHA dismissed Gale’s complaint on the grounds that WFG was not a covered employer.  Gale appealed the decision to an administrative law judge of the Department of Labor, who allowed pre-hearing depositions. During his deposition, Gale testified that he was “uncomfortable” with some of the practices he observed and “expressed reservations” about them, but that he did not actually believe the company was engaging in illegal or fraudulent activities. The ALJ recommended that WFG’s motion for summary decision be granted on the grounds that Gale could not prove that he reasonably believed WFG’s practices were illegal or fraudulent. The Administrative Review Board agreed with the ALJ and granted WFG’s motion. Gale appealed the ARB's decision to the Eleventh Circuit. 

The question presented in Gale was what “reasonably believes” means. In answering this question, the Eleventh Circuit joined several other federal circuit courts in holding that the term encompasses both a subjective and an objective component. That is, the employee must actually believe that the employer’s conduct was illegal, and his belief must be objectively reasonable under a “reasonable person” standard.  The court noted that it has employed the same standard in the context of other retaliation statutes such as Title VII. 

Because Gale did not actually believe his employer’s conduct was illegal, the Eleventh Circuit affirmed the ALJ’s summary decision in favor of WFG. The court did not have to reach the question of whether a reasonable person would have believed WFG’s practices were illegal or fraudulent. 

For employers in the Eleventh Circuit, Gale is a reminder of the importance of both components of a retaliation case. Whether a belief is “objectively reasonable” is often a difficult question, and one that may not be amenable to a summary judgment motion. But where an employer is fortunate enough to obtain an admission from a plaintiff that she did not actually believe her employer’s conduct was illegal – or in the case of a Title VII sexual harassment case, that she did not actually perceive the harassment as sufficiently severe or pervasive to alter the terms and conditions of her employment – defending a retaliation case becomes a piece of cake. 

Understanding Florida's Workers' Compensation Retaliation Statute

A plaintiff who alleges that his employer terminated his employment in retaliation for filing a workers’ compensation claim is entitled to proceed to trial, according to a recent decision by the Third District Court of Appeals, Ortega v. Engineering Systems Technology, Inc. (Fla. 3d DCA, January 20, 2010).  The Ortega case provides a good opportunity to explore the contours of section 440.205, Florida’s workers’ compensation retaliation statute.

The plaintiff in the case, Ricardo Ortega, fell off a ladder on October 31, 2006 while working for his employer, Engineering Systems Technology, Inc. Ortega broke his wrist, and the employer’s workers’ compensation carrier was notified. Ortega was put in a “no work” status while he received therapy. Three months after his accident, on February 1, 2007, Ortega’s doctor authorized him to engage in the “limited use of [his] injured hand” with a twenty pound weight restriction. On the same day, Ortega asked his boss, Enrique Borja, if he could return to work. Borja told Ortega the company had no light duty for him and to come back when he had no limitations. On April 12, 2007, Ortega’s doctor released him to work without restrictions. Four days, later, Borja told him, “I don’t have work for you… I removed you from my staff two months ago.” But around the same time, Borja also stated that he would take Ortega back when he was sufficiently recovered.


Borja sued Engineering Systems under section 440.205, Florida Statutes, which provides:


Coercion of employees.--No employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee's valid claim for compensation or attempt to claim compensation under the Workers' Compensation Law.


The trial court granted summary judgment to Engineering Systems, and Ortega appealed.


On appeal, the Third DCA ruled that there were genuine disputes of fact as to whether Ortega was fired, or whether he failed to request a return to duty; and whether, if Ortega was fired, it was in retaliation for his pursuit of workers’ compensation benefits. The court rejected the employer’s argument that Ortega’s failure to provide his employer with a Division of Workers’ Compensation Form DWC-4, releasing him to return to work, provides a complete defense to a retaliation claim under section 440.205.


So what can Florida employers learn from the Ortega decision? Perhaps the most important lesson is to do what Engineering Systems and Borja apparently did not do:  adopt a clear policy authorizing the termination of employees who are unable to work for a period of time (e.g. three months), and apply the policy decisively and consistently.  (For employers covered by the FMLA, make sure the policy is compliant with this statute.)  It seems likely that Engineering Systems did not have a clear policy governing such situations. It is clear that Borja was not decisive in terminating Ortega or in consistently delivering his message to Ortega.


Suppose, however, that Borja had told Ortega on February 1, 2007 that in accordance with company policy, his employment was terminated because he had been unable to perform his job for three months. In Pericich v. Climatrol, Inc., 523 So. 2d 684, 685 (Fla. 3d DCA 1988), the Third District Court of Appeals held that section 440.205:


only prohibits the retaliatory discharge of an employee “by reason of” the filing of a workers’ compensation claim. The statute cannot be interpreted to prohibit the discharge of an employee for any reason once the employee has filed or pursued a workers' compensation claim. Employers still retain their traditional right to terminate employees for legitimate business reasons, such as unsatisfactory job performance or excessive absenteeism.


And in Edwards. v. Niles Sales & Service, Inc., 439 F. Supp. 2d 1202, 1230 (S.D. Fla. 2002), a federal court, citing Pericich, held that “[w]ithout question, firing an employee because the employee has been unable to work for approximately three months constitutes a legitimate business decision[.]


So, Borja could have lawfully terminated Ortega on February 1, 2007. If the company’s policy provided for termination after a three-month period of incapacity, and Borja terminated Ortega decisively in accordance with this policy, it is likely that the Third DCA would have upheld the trial court’s summary judgment order. 


The point here is that section 440.205 does not give an employee a right to be restored to his job when he returns from leave from a work-related injury. Nor does it give an employee a right to work in a light-duty capacity.  The statute only gives an employee a right to be free from retaliation because he has filed a workers' compensation claim. These issues can become blurred, as they were in Ortega. But by adopting a clear policy stating that an employee will be terminated after a period of inability to work (for any reason), and applying that policy decisively, employers can avoid costly litigation under section 440.205.            

Record Jump In Job Bias Claims Filed With EEOC In FY 2008

The following is a reprint of a client alert authored by EBG attorneys Barry Asen and Steven Blackburn.  It should be of interest to all Florida employers.

On March 11, 2009, the Equal Employment Opportunity Commission (EEOC) announced that a record-breaking number of workplace discrimination charges—95,402, to be exact—were filed with the agency in Fiscal Year 2008. This number represents a 15.2 percent increase over the previous fiscal year, when the agency received 82,792 charges of discrimination against both public and private employers. This dramatic increase in the number of charges filed likely is an indicator of what is to come.

The EEOC’s fiscal year ends September 30; thus, the agency’s statistics do not include charges filed since the nation’s economic woes devolved into a crisis last fall. According to the Bureau of Labor Statistics, since the recession began in December 2007, about 4.4 million jobs have been lost, but more than half—2.6 million—of the decrease occurred in the four-month period from November 2008 through February 2009. Historically, as EEOC spokesperson David Grinberg acknowledges, charges increase dramatically the year following an economic downturn. Thus, Grinberg warns: "It’s possible we have yet to see the full impact of the recession on discrimination charge filings as the economy continues to spiral downward since fiscal year 2008." In short, it looks like we may be headed toward another record-breaking year in which more than 100,000 workers file discrimination charges.

Breaking Down the EEOC’s Numbers

All major categories of charges filed with the EEOC increased in FY 2008. The largest annual increase involved allegations of age discrimination, which rose almost 29 percent to a record 24,582 charges. Retaliation claims experienced the next highest increase, climbing 22.6 percent to 32,690. The number of retaliation claims filed was second only to the historical leader, race discrimination, which, at 33,937 charges, experienced an 11 percent increase over FY 2007. Sex discrimination charges came in third with 28,372 charges filed, a 14 percent increase over FY 2007.

Other protected categories showing a double-digit increase in the number of charges filed include:

  • Religion: 14 percent increase (3,273 charges filed) 
  • National Origin: 13 percent increase (10,601 charges filed)
  • Disability: 10 percent increase (19,453 charges filed).

In FY 2008, the EEOC recovered approximately $376 million in monetary relief for thousands of employees, former employees and job applicants. This amount does not include monetary relief obtained by workers who filed discrimination charges with state or local human rights agencies or settlements and awards obtained by plaintiffs as a result of private lawsuits brought against employers in federal and state courts.

Reading the Tea Leaves

Looking ahead, the most troubling numbers from the EEOC’s FY 2008 report may be the enormous spike in age discrimination charges. Although data recently released by the Bureau of Labor statistics indicate that older workers fared better than their younger colleagues in holding onto their jobs at the beginning of the economic downturn, historical patterns suggest that they likely will experience a reversal of fortune in 2009.

Older workers who are laid-off while younger workers are retained may perceive age bias even where none exists, particularly if they had been with the company longer than their younger colleagues. Moreover, according to statistics recently compiled by the American Association of Retired Persons (AARP), older workers have a much harder time than younger workers finding a new job and are, on average, unemployed for more than six months. AARP’s findings are consistent with a 2005 study that found that, when interviewers are given resumes containing the applicant’s age, younger job applicants are 40 percent more likely to be called for an interview than are applicants over age 50. When combined, these factors suggest that we will see a significant increase in the number of age-bias charges and lawsuits in 2009.

Now add to the mix that the U.S. Supreme Court has made it easier for older laid-off workers to sue and win age discrimination cases. In 2005, the Court held that older workers need not prove that their employer intentionally discriminated against them; rather, they need only show that the challenged policy, such as a reduction-in-force (RIF), had a "disparate impact" on the company’s older workers. In other words, an employer may be held liable for age discrimination if a RIF resulted in a statistically significant disparity in the number of older workers (those over 40) laid off as compared to the number of younger workers who lost their jobs. Although an employer may counter unfavorable statistics by, among other defenses, asserting that the layoff decisions were based on a "reasonable factor other than age" (RFOA), in 2008, the Court placed the burden of proving the existence of an RFOA squarely on the shoulders of the employer.

Because RIFs typically involve groups of workers and "disparate impact" claims, they tend to result in high-stakes age (or race or sex) discrimination class actions. Moreover, the EEOC itself can bring a class action. Indeed, in announcing its FY 2008 statistics, the agency’s Acting Chairman, Stuart J. Ishimaru, declared: "The EEOC is committed to vigorously enforcing federal laws prohibiting employment discrimination and will continue to invest in programs such as its systemic litigation program to maximize its effectiveness." "Systemic litigation" is the agency’s terminology for class actions.

The Take Away

The dramatic surge in the number of charges filed last year with the EEOC, particularly the record number of age discrimination claims, underscores the broad reach and impact of the current economic crisis. As employers try to cope with the business challenges posed by the economic downturn, they need to address the myriad legal pitfalls inherent in such operational decisions as a RIF. The cost of a poorly planned and hastily implemented RIF can more than negate the financial benefit initially realized by the "cost-cutting" measure.

Supreme Court Rejects "Freakish" Rule, Expands Title VII Retaliation Protections

 The U.S. Supreme Court ruled yesterday that Title VII's anti-retaliation provision’s protection extends to an employee who answers questions during an employer’s internal investigation.

 The case, Crawford v. Metropolitan Gov't of Nashville (January 26, 2009) involved an employee (Crawford) who, in the course of an internal investigation into rumors of sexual harassment by the school district's employee relations director (Hughes), reported that Hughes had sexually harassed her. The employer took no action against Hughes, but soon fired Crawford for alleged embezzlement.

Crawford sued, claiming that the employer retaliated againt for her report of Hughes’s behavior in violation of Title VII's anti-retaliation provision (42 U. S. C. §2000e–3(a)), which makes it unlawful “for an employer to discriminate against any . . . employe[e]” who (1) “has opposed any practice made an unlawful employment practice by this subchapter”(opposition clause), or (2) “has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter” (participation clause). The court granted the employer summary judgment, and the Sixth Circuit Court of Appeals affirmed, holding that the opposition clause demanded “active, consistent” opposing activities, whereas Crawford had not initiated any complaint prior to the investigation; and finding that the participation clause did not cover the employer's internal investigation because it was not conducted pursuant to a Title VII charge pending with the Equal Employment Opportunity Commission.

The Supreme Court reversed, holding that the anti-retaliation provision’s protection extends not only to employees who speak out about discrimination not on their own initiative, but also those who answer questions during an employer’s internal investigation.  The court reasoned that because “oppose” is undefined by the statute, it carries its ordinary dictionary meaning of resisting or contending against, and includes taking no action at all to advance a position beyond disclosing it.  Thus, a person can “oppose” by responding to someone else’s questions.  The court concluded that nothing in the statute requires a "freakish" rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when asked a question.

For Florida employers, Crawford is not groundbreaking, as the Eleventh Circuit had already indicated (if not expressly held) that an employee's participation in his employer's internal investigation is protected activity under the opposition clause of Title VII.  See EEOC v. Total Sys. Serv., Inc., 221 F.3d 1171, 1174 (11th Cir. 2000).  But Crawford does clarify this point of law, and also makes clear that answering questions in the course of an investigation can constitute "opposition" just as surely as a complaint that triggers an internal investigation. 

On the other hand, Crawford does not change the rule in the Eleventh Circuit that to establish a prima facie case of retaliation under the opposition clause of Title VII, a plaintiff must show that she had a good faith, reasonable belief that the employer was engaged in unlawful employment practices. This standard has both a subjective and an objective component. A plaintiff must not only show that she subjectively (that is, in good faith) believed that her employer was engaged in unlawful employment practices, but also that her belief was objectively reasonable. See Little v. United Technologies, Carrier Transicold Division, 103 F.3d 956 (11th Cir. 1997).