Munroe v. PartsBase, Inc.

6 months after Plaintiff brought her case for unpaid overtime wages, pursuant to the FLSA, the Defendants brought counterclaims against Plaintiff for Breach of Confidentiality Agreement and Conversion. The Plaintiff then filed an Amended Complaint adding a 215 Retaliation cause of action. The parties moved for Summary Judgment on several of the claims and cross claims.  The Court granted Defendants summary judgment on Plaintiff’s retaliation claim.

Addressing Plaintiff’s retaliation claim, the Court adopted the majority view that, for a Plaintiff to prevail on her retaliation claim, she must demonstrate that Defendants’ counterclaims (1) were filed for a retaliatory motive and (2) lack a reasonable basis in fact or law. See Darveau, 515 F.3d at 343-44 (reversing district court order dismissing retaliation claim where plaintiff alleged his employer filed a lawsuit against him with a retaliatory motive and without a reasonable basis in fact or law); Barnes v. Akal Sec., Inc., 2005 WL 1459112, *5 (D.Kan.2005) (agreeing with Defendants analysis of the law that “the filing of a counterclaim can not be actionable retaliation unless Plaintiffs establish (1) retaliatory motive and (2) lack of a reasonable basis for the claims”); Torres, 2008 WL 4054417, *17 (“Courts have held that baseless claims or lawsuits designed to deter claimants from seeking legal redress constitute impermissibly adverse retaliatory actions, even though they do not arise strictly in an employment context.”) (emphasis added); Ergo v. Int’l Merch. Servs., 519 F.Supp.2d 765, 781 (N.D .Ill.2007) (holding that a compulsory counterclaim is not actionable for retaliation unless it is totally baseless); Orr., 2008 WL 2605569, *17 (accord).

The Court found that there was record evidence to support the conclusion that but for the filing of Plaintiff’s FLSA claims, Defendants would not have filed their counterclaims. In six months, Defendants took no steps to sue Plaintiff for this alleged breach. Additionally, other former co-employees engaged in the very conduct which Defendants used as the basis of their counterclaims against Plaintiff. Defendants did not file an action against the other former co-employees, who, unlike Plaintiff, did not sue the Defendants for FLSA violations.

Nonetheless, the Court held, even assuming the retaliatory motive prong is met, Plaintiff’s retaliation claim must fail if she cannot prove that the counterclaims lack a reasonable basis in fact or law. See Darveau, 515 F.3d at 343-44;
Barnes v. Akal Sec., Inc., 2005 WL 1459112, *5-6. As the court held in Barnes,”the ultimate standard for determining whether a counterclaim has a ‘reasonable basis’ is whether there is a genuine issue of material fact.” 2005 WL 1459112, *6. Because the Court concluded that genuine issues of material fact existed with regard to Defendants’ counterclaims, which must be resolved at trial, the Court found that the counterclaims were not baseless. Accordingly, Plaintiff could not meet both elements required to prove that Defendants’ counterclaims constitute actionable FLSA anti-retaliation.