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4th Cir.: Statute of Limitations Equitably Tolled Where Employer Fails to Post Required FLSA Notice

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Cruz v. Maypa

This case involved a former domestic servant who sued her former employers alleging claims for forced labor and involuntary servitude under the Victims of Trafficking and Violence Protection Act (TVPA), willful violation of Fair Labor Standards Act (FLSA), and state law claims for breach of contract, fraudulent misrepresentation, and false imprisonment. After the court below dismissed the case on statute of limitations grounds, plaintiff appealed. As discussed here, the Fourth Circuit joined other courts who have similarly held, and held that where an employer fails to post the required FLSA Notice, the statute of limitations for an employees claims under the FLSA are tolled until he or she either obtains an attorney, or obtains actual knowledge of his or her rights.

Initially, the Fourth Circuit identified two circumstances under which equitable tolling may generally be applicable:

[E]quitable tolling is available when 1) “the plaintiffs were prevented from asserting their claims by some kind of wrongful conduct on the part of the defendant,” or 2) “extraordinary circumstances beyond plaintiffs’ control made it impossible to file the claims on time.” Harris, 209 F.3d at 330 (internal quotation marks omitted). Cruz asks us to evaluate this rule in light of Vance v. Whirlpool Corp., 716 F.2d 1010 (4th Cir.1983), in which this Court found that the district court properly held that the 180–day filing requirement of the Age Discrimination in Employment Act (“ADEA”) was tolled by reason of the plaintiff’s employer’s failure to post statutory notice of workers’ rights under the Act. Id. at 1013.

Extending its reasoning from Vance, an ADEA claim to claims under the FLSA, the court explained:

It makes good sense to extend our reasoning in Vance to the FLSA. The notice requirements in the ADEA and the FLSA are almost identical. Compare 29 C.F.R. § 1627.10 (requiring employers to “post and keep posted in conspicuous places … the notice pertaining to the applicability of the [ADEA]”), with id. § 516 .4 (requiring employers “post and keep posted a notice explaining the [FLSA] … in conspicuous places”). The purpose of these requirements is to ensure that those protected under the Acts are aware of and able to assert their rights. Although Vance tolled an administrative filing deadline rather than a statute of limitations, the FLSA lacks an equivalent administrative filing requirement; thus, the FLSA’s deadline to sue is, like the ADEA’s administrative filing deadline, the critical juncture at which a claimant’s rights are preserved or lost. Neither the ADEA nor the FLSA inflicts statutory penalties for failure to comply with the notice requirements. See Cortez v. Medina’s Landscaping, Inc., No. 00 C 6320, 2002 WL 31175471, at *5 (N.D.Ill. Sept.30, 2002) (extending an actual notice tolling rule similar to Vance from the ADEA to the FLSA). Therefore, absent a tolling rule, employers would have no incentive to post notice since they could hide the fact of their violations from employees until any relevant claims expired. For all of these reasons, this Court’s analysis in Vance applies with equal force to the notice requirement of the FLSA. Under Vance, tolling based on lack of notice continues until the claimant retains an attorney or obtains actual knowledge of her rights. 716 F.2d at 1013. The current factual record, which is limited to the amended complaint, does not identify when Cruz first retained a lawyer or learned of her rights under the FLSA. Therefore, the district court should allow discovery on remand to determine in the first instance whether Cruz’s FLSA claim was time-barred despite being equitably tolled.

Click Cruz v. Maypa to read the entire Opinion.

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