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.





Third DCA Upholds General Release Against Foreign Claims

Third District Court of AppealsWhen is a general release effective to release a claim from a former employee?  According to the trial court in a case my firm is litigating, such a release is not effective when it contains "including but not limited to" language that goes on to list the types of claims that are being released, but does not list foreign claims. 

Fortunately for our client and for Florida employers generally, the Third District Court of Appeals disagreed, holding that “including but not limited to” does not limit the general release to those causes of action specifically listed.  The case is Axa Equitable Life Ins. Co. v. Gelpi and Liu, Case No. 3D08-2800 (Fla. 3d DCA, May 6, 2009). 

Some background:  The employees worked for our client in Brazil and, later, Miami.  Upon termination of their employment in Miami, they each signed a release and separation agreement, receiving substantial consideration (severance pay and attorney's fees) in return. The employees, who were Brazilian citizens, then moved back to Brazil and filed a lawsuit in Brazil against our client alleging violations of Brazilian law which allegedly arose out of their employment in Brazil and in Miami. Our client sued the employees, alleging that the employees breached their agreements by filing the Brazilian suit.

The parties filed cross-motions for summary judgment. The trial court granted the employees' motion on the grounds that by omitting foreign claims from the list of claims being released following the "including but not limited to" clause, the agreements did not release the employer from the claims filed in Brazil. 

On appeal, the Third DCA reversed, finding that the agreements released the employer "from any and all causes of action arising out of their employment and that the release includes, but is not limited to, just those enumerated causes of action."  Thus, the appellate court ordered the trial court to enter summary judgment on behalf of the employer.

I'm biased, of course, but it seems to me that the Third DCA got it right.  The phrase "including but not limited to" cannot be read to have a limiting effect.  The list of claims following "including but not limited to" in a general release is intended to provide examples of claims that are being released; it is not meant to be an exhaustive list.  To conclude otherwise, as the trial court did, is to turn the plain meaning of the phrase "including but not limited to" on its head.

A caveat:  The Third DCA's decision does nothing to change the rule in the federal Eleventh Circuit (which covers Florida) that releases of claims under the Fair Labor Standards Act are ineffective absent approval by the Department of Labor or a court. See Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982).

Third DCA Applies Federal Standards for Florida Whistleblower Coverage

The Florida private sector Whistleblower's Act ("FWA") covers "any private individual, firm, partnership, institution, corporation, or association that employs ten or more persons."  See section 448.101, Florida Statutes.  However, the statute does not address the circumstances under which the number of employees at two related firms can be aggregated for purposes of establishing liability under the FWA. 

In Diaz v. Impex of Doral, Inc. (Fla. 3d DCA, March 18, 2009), the Third District Court of Appeals held that the trial court erred in not applying the federal "single employer" and "joint employer" doctrines to a case brought under the FWA.

As explained by the United States Court of Appeals for the Second Circuit,

A "single employer" situation exists "where two nominally separate entities are actually part of a single integrated enterprise so that, for all purposes, there is in fact only a 'single employer.'" The single employer standard is relevant when "separate corporations are not what they appear to be, that in truth they are but divisions or departments of a 'single enterprise.'" 

In contrast, in a "joint employer" relationship, there is no single integrated enterprise. A conclusion that employers are "joint" assumes that they are separate legal entities, but that they have merely chosen to handle certain aspects of their employer-employee relationships jointly.

Clinton's Ditch Coop. Co. v. NLRB, 778 F.2d 132, 137 (2d Cir. 1985) (citations omitted) (cited by the Eleventh Circuit Court of Appeals in Virgo v. Riviera Beach Assocs., 30 F.3d 1350, 1360 n.6 (11th Cir. 1994)).

In Diaz, the plaintiff, Luis Diaz, claimed that the forklift he was operating, which was owned by defendant Impex of Doral Logistics ("Impex Logistics"), was unsafe and improperly maintained, in violation of the Occupational Safety and Health Administration’s (“OSHA”) regulations. Diaz alleged that when he complained about the safety of the forklift, defendant Impex of Doral ("Impex"), from whom Diaz received a paycheck, unlawfully retaliated by terminating his employment. Oscar Perez, the manager of both Impex and Impex Logistics, fired Diaz. The action proceeded to a jury trial.

At trial, Diaz presented evidence of the close operational relationship between Impex and Impex Logistics.  Nevertheless, Impex Logistics moved for directed verdict against Diaz, asserting it did not have the required number of employees to make it liable as an “employer” under the FWA.  Diaz’s attorney did not dispute that Impex Logistics, by itself, did not have the requisite number of employees to make it a covered employer under the FWA. However, he argued that the jury could find that Impex and Impex Logistics were either a “single employer” or a “joint employer” of Diaz.  The trial court declined to apply these federal concepts and granted Impex Logistics' motion for directed verdict.

The Third DCA reversed.  Citing its earlier decision in Martinolich v. Golden Leaf Management, Inc., 786 So. 2d 613 (Fla. 3d DCA 2001), the court held that the federal “single employer” and “joint employer” doctrines are applicable in FWA actions.

The Diaz holding is not surprising.  It is not unusual for Florida courts to borrow employment law doctrines from federal courts, which generally have more experience in the area of employment law. Moreover, the Third DCA had expressly ruled in 2001 that the federal “single employer” and “joint employer” doctrines are applicable in FWA actions.  It is not clear from the Diaz opinion why the trial court did not follow this authority.

What is clear from the Diaz decision is that employment practitioners in Florida should be fully versed in both Florida and federal law to serve their clients well.