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Supreme Court Rules Oral Complaints Protected by FLSA But Leaves Open Questions of Notice and Formality

by Charles Wilson

On March 22nd, the Supreme Court, in Kasten v. Saint-Gobain Performance Plastics Corp., a 6-2 opinion written by Justice Breyer, ruled the Fair Labor Standards Act (“FLSA”) protects oral complaints of perceived wage and hour violations. In making such ruling, the Court resolved a conflict among the lower courts but left open the question of what is sufficient fair notice and whether an employee is required to report the complaint to a government agency rather than internally to the employer. Regardless, the Court’s ruling will likely expose employers to more risk of retaliation claims when making adverse employment decisions after an employee raises concerns about how they are compensated.

Former employee Kevin Kasten alleged he verbally complained, on several occasions, to his superiors and human resources employees at Saint-Gobain Performance Plastics that the time-clocks were too far away from the area in which he put on (and took off) his work clothes and protective gear. This prevented Kasten from being paid for time he spent performing such activities. In some instances, Kasten commented the location of the time clocks was “illegal,” and that if the company was challenged it “would lose.” On one occasion, Kasten even said he was “thinking of filing a lawsuit” regarding the placement of the time clocks. Kasten asserted shortly after he raised the foregoing concerns, he was disciplined and eventually terminated.

The FLSA’s anti-retaliation provision prohibits employers from discharging or discriminating against employees who have “filed any complaint” regarding perceived FLSA violations. Saint-Gobain Performance Plastics argued successfully at the summary judgment stage in district court, and on appeal before the Seventh Circuit, that the term “filed any complaint” did not encompass oral complaints. Seems reasonable at first glance. To “file” a “complaint” implies a written document. Indeed, a number of other lower courts construed “filed any complaint” to mean written complaints. The Supreme Court, however, disagreed.

The Court explained the word “file” could also mean the filing of oral complaints. The Court discussed how, in other contexts, judges, statutes, regulations, and dictionaries use the term “file” in reference to oral and written complaints. The Court also noted the term “filed any complaint” lacked the term “written,” which is used in other parts of the FLSA.    But, the more important reason the Court relied on to protect oral complaints was the FLSA’s purpose: protecting workers. Excluding oral complaints from protection, the Court reasoned, would discourage employees who cannot effectively articulate complaints in writing from raising concerns, which would interfere with enforcement of the FLSA.

But Saint-Gobain Performance Plastics also legitimately argued that if oral complaints are deemed protected, employers would not know if an employee is actually making a complaint that the FLSA is being violated or simply “letting of stream.” In other words, oral complaints may not give employers fair notice that a complaint could subject them to retaliation claims. The Court agreed, but explained such notice can be accomplished through oral complaints so long as a “reasonable, objective person would have understood the employee to have put the employer on notice that the employee is asserting statutory rights.” The complaint should be sufficiently clear and detailed for a reasonable employer to understand, in view of the content and context, that an employee is asserting rights protected by the FLSA. The Court did not, however, discuss how much detail and clarity is enough, leaving that task to the lower courts.

The Court also declined to address whether complaints, oral or written, must be presented to a government agency, like the Department of Labor. The lower courts in Kasten decided internal complaints to an employer are protected. Justices Scalia and Thomas, dissenting, disagreed explaining internal complaints are not protected because the term “complaint” in the legal context has always meant “a formal allegation or charge against a party” and “every other use of the term “complaint” in the FLSA “refers to an official filing” with a government agency.

At the end of the day, the Kasten case provides good nuggets of information and arguments for employers to use when defending against FLSA retaliation claims, but the case will certainly make it easier for employees to establish retaliation claims, and juries tend to be more sympathetic to such claims. The big issue going forward is how much information is enough to put the employer on notice that an employee is truly asserting a perceived FLSA violation. Already, a number of courts have held a complaint need only be conveyed to the employer. Kasten used terms like “illegal” and “lawsuit,” but what if employees do not go that far?  What if a rant is posted on Facebook or a blog and it is later verbally conveyed to the employer?

If these employees are later fired by decision-makers who were notified verbally of these communications before making the adverse decision, the employees may argue successfully that they were terminated for making protected complaints. Time will tell how the courts will treat oral complaints under the standard discussed above in FLSA retaliation claims. For now, employers are cautioned to review their internal complaint and anti-retaliation policies. EBG colleague Frank Morris identified some steps employers should consider in an Act Now Advisory found here.