In a recent case, the US Court of Appeals for the Seventh Circuit ruled that oral complaints of violations under the Fair Labor Standards Act (the FLSA or Act) are not protected by the FLSA’s anti-retaliation provision.  Kasten v. Saint-Gobain Performance Plastics Corp., 570 F.3d 834 (7th Cir. 2009).

According to the Court’s opinion, Saint-Gobain manufactures a variety of high-performance materials at facilities throughout the country. Kevin Kasten worked in Saint-Gobain's Portage, Wisconsin facility from October 2003 to December 2006.  In order to receive their weekly paychecks, Saint-Gobain hourly employees must use a time card to swipe in and out of an on-site Kronos time clock. On February 13, 2006, Kasten received a “verbal warning” form from Saint-Gobain because of several “issues” Kasten had with regard to punching in and out on the Kronos time clocks. The notice stated that “[i]f the same or any other violation occurs in the subsequent 12-month period from this date of verbal reminder, a written warning may be issued.” Kasten signed the notice, acknowledging that he read and understood it.

On August 31, 2006, Kasten received a written warning from his employer, again related to swiping in and out on the Kronos clocks. The notice stated that “[i]f the same or any other violation occurs in the subsequent 12-month period from this date [sic] will result in further disciplinary action up to and including termination.” Kasten signed the written warning, again acknowledging that he read and understood it.

On November 10, 2006, Kasten received yet another written warning from Saint-Gobain for failure to swipe in and out, this time accompanied by a one day disciplinary suspension. The warning stated that “[t]his is the last step of the discipline process” and that if another violation occurred, further discipline, including termination, could result. Kasten signed the warning, again acknowledging that he read and understood it.

Kasten alleged (though Saint-Gobain disputed) that from October through December, 2006, he orally complained about the legality of the location of Saint-Gobain's time clocks. Specifically, Kasten claimed that he told his supervisors and human resources representatives on several occasions that the location of the Kronos clocks prevented employees from being paid for time spent donning and doffing their required protective gear. Saint-Gobain denied that Kasten ever told any of his supervisors or any human resources personnel that he believed that the clock locations were illegal.

On December 6, 2006, Saint-Gobain suspended Kasten on the ground that he had violated its policy regarding time clock punching for the fourth time. Kasten claimed that at a meeting regarding this suspension, he again orally told his supervisors that he believed the location of the clocks was illegal and that if he challenged the company in court regarding the location of the clocks the company would lose. Saint-Grobain disputed that Kasten complained about the time clocks at this meeting. On December 11, 2006, Human Resources Manager Dennis Brown told Kasten over the phone that Saint-Gobain had decided to terminate his employment.

Kasten filed suit under the FLSA, claiming that he had been terminated in retaliation for his oral complaints regarding the location of the time clocks. The district court granted summary judgment to Saint-Gobain, finding that Kasten had not engaged in protected activity because he had not “filed any complaint” about the allegedly illegal location of the time clocks. Kasten appealed to the Seventh Circuit.

The Seventh Circuit observed that the FLSA provides private remedies for employees who have suffered adverse employment actions as a result of engaging in certain protected activities. Section 215(a)(3) of the Act states, in relevant part:

[I]t shall be unlawful for any person ... 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, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.

Kasten sought to establish a claim for retaliation based solely on his allegation that he “filed complaints” with his employers regarding the location of the time clocks. To determine whether Kasten engaged in protected activity, the Court determined it had to answer two questions about the scope of the FLSA's retaliation provision: first, whether intra-company complaints that are not formally filed with any judicial or administrative body are protected activity; and second, whether unwritten verbal complaints are protected activity.

The district court found that intra-company complaints were protected activity but concluded that unwritten verbal complaints were not protected activity. Kasten argued, along with a supporting amicus brief filed by the US Secretary of Labor, that the Seventh Circuit should reverse the second portion of the district court's ruling holding that unwritten complaints are not protected activity under the statute. They argued that the FLSA retaliation provision should be read expansively to protect employees who make only internal, unwritten objections to their employers.

Internal Complaints Held Protected

The Seventh Circuit noted that “the plain language of the statute indicates that internal, intra-company complaints are protected,” because the retaliation provision states that it is “unlawful for any person to discharge ... any employee because such employee has filed any complaint.... ”   The majority of circuit courts considering the question, including the First, Fifth, Sixth, Ninth, Tenth and Eleventh,  have also found that “any complaint” includes internal complaints. However, the Fourth Circuit has held that internal complaints are not protected. The Seventh Circuit decided to side with the majority on this point.

Unwritten Complaints Held Unprotected

The next issue for the Court to decide was whether unwritten, purely oral complaints are protected activity under the Act.  Again, starting with the plain language of the Act, the Court reasoned that “[t]he FLSA's retaliation provision prohibits “discharg[ing] ... any employee because such employee has filed any complaint....” The district court reasoned that expressing an oral complaint is not the same as filing a complaint. By definition, the word “file” refers to “a collection of papers, records, etc., arranged in a convenient order,” Random House Webster's College Dictionary 489 (2d ed.1999), or, when used in verb form as it is in the FLSA, “[t]o deliver (a paper or instrument) to the proper officer so that it is received by him to kept on file, or among the records of his office,” Webster's New International Dictionary of the English Language 945 (2d ed.1958). The Seventh Circuit opined that “[o]ne cannot ‘file’ an oral complaint; there is no document, such as a paper or record, to deliver to someone who can put it in its proper place.” 

Kasten disagreed, and argued that “to file” is a broad term that has several meanings, including, generally, “to submit.” Looking only at the language of the statute, the Seventh Circuit believed that the district court correctly concluded that unwritten, purely oral complaints are not protected activity. “If an individual told a friend that she filed a complaint with her employer, we doubt the friend would understand her to possibly mean that she merely voiced displeasure to a supervisor.” Rather, the natural understanding of the phrase “file any complaint” requires “the submission of some writing to an employer, court, or administrative body.”

The Seventh Circuit noted that other circuit courts that have addressed this issue are split. The Second and Fourth Circuits have found that oral complaints are not protected, whereas the Sixth, Eighth and Eleventh circuits have ruled, without discussion, that they are protected.  Despite these contrary findings by some other circuits, the Court noted that its interpretation of the phrase “file any complaint” is confirmed by “the fact that Congress could have, but did not, use broader language in the FLSA's retaliation provision.”   For example, analogous provisions in other statutes, including Title VII and the Age Discrimination in Employment Act, forbid employers from retaliating against any employee who “has opposed any practice” that is unlawful under the statutes.  According to the Seventh Circuit, this broader phrase, “opposed any practice,” does not require a “fil[ing],” and “has been interpreted to protect verbal complaints.” Congress's selection of the narrower “file any complaint” language in the FLSA was deemed significant to the Seventh Circuit.  Thus, the district court’s dismissal was affirmed.

Conclusions

Although the Kasten case does provide a defense to employers against oral FLSA retaliation claims, some limitations must be noted.  First, the Court’s holding is limited to employers in the Seventh Circuit.  Other courts outside of that circuit have held that oral complaints are protected.  Second,   many states have their own wage and hour laws that may have anti-retaliation provisions that are broader than those in the FLSA.  Those state laws must be consulted.  Finally, an employee who receives adverse treatment after complaining orally of FLSA violations may also be able to sustain a cause of action under a state whistleblower protection law or under the common law theory of wrongful discharge in violation of public policy.  The bottom line:  before disciplining or discharging an employee under these circumstances, an employer should feel confident that it is able to articulate and prove a legitimate nondiscriminatory and non-retaliatory reason for discharging an employee who has complained of wage and hour violations.

The Arent Fox Employment Law Group regularly advises employers on compliance with wage and hour laws, and defends them in individual, collective and class action wage and hour litigation across the country.  If you have any questions about this case or any other wage and hour issues, please feel free to contact us.

Michael L. Stevens
stevens.michael@arentfox.com
202.857.6382