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9th Cir.: Employer’s Attorney Can Be Sued for Retaliation as a “Person Acting Directly or Indirectly” in Employer’s Interest
This case presented an issue of first impression: Can an employer’s attorney be held liable for retaliating against his client’s employee because the employee sued his client for violations of workplace laws? The district court held that he could not and dismissed the claim. On appeal the Ninth Circuit disagreed and reversed. Specifically, the Ninth Circuit held that as a “person acting directly or indirectly” in the employer’s interest, the employer’s attorney could be subject to liability under 29 U.S.C. § 215.
In the case, the defendant-employers had hired the plaintiff-employee, an undocumented immigrant without verifying his immigration status or his right to work in the United States. Although not explicitly stated, the Ninth Circuit’s opinion strongly implies that the defendants intentionally neglected to complete an I-9 form or verify plaintiff’s status because it knew he was not legally permitted to work in the United States.
After working for defendants for 11 years, in 2006, plaintiff filed suit in California state court against defendants, alleging that defendants violated a multitude of employment laws, and alleged among other things that defendants failed to provide him with legally mandated rest breaks and failed to pay him legally mandated overtime premiums.
The Ninth Circuit recited the following facts regarding the alleged retaliation, all taken from plaintiffs subsequent lawsuit alleging illegal retaliation that was the subject of the Ninth Circuit’s opinion:
On June 1, 2011, ten weeks before the state court trial, the Angelos’ attorney, Anthony Raimondo, set in motion an underhanded plan to derail Arias’s lawsuit. Raimondo’s plan involved enlisting the services of U.S. Immigration and Customs Enforcement (“ICE”) to take Arias into custody at a scheduled deposition and then to remove him from the United States. A second part of Raimondo’s plan was to block Arias’s California Rural Legal Assistance attorney from representing him. This double barrel plan was captured in email messages back and forth between Raimondo, Joe Angelo, and ICE’s forensic auditor Kulwinder Brar.
On May 8, 2013, Arias filed this lawsuit against Angelo Dairy, the Angelos, and Raimondo in the Eastern District of California. Arias alleged that the defendants violated section 215(a)(3) of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.
Arias’s theory of his case is that Raimondo, acting as the Angelos’ agent, retaliated against him in violation of section 215(a)(3) for filing his original case against Raimondo’s clients in state court . Raimondo’s sole legal defense is that because he was never Arias’s actual employer, he cannot be held liable under the FLSA for retaliation against someone who was never his employee.
As noted by the court, Angelo Dairy and its owners settled their part of this case at the early stages of its existence.
The district court dismissed plaintiff’s claims against the defendants’ attorney holding that he was not covered under the FLSA’s retaliation provisions because he was not plaintiff’s employer. Noting that the FLSA’s retaliation provision defines those subject to liability in a much broader way than the underlying definition of employer (which is broad to begin with) the Ninth Circuit reversed.
Discussing the issue before it the court explained:
Notwithstanding section 215(a)(3)’s reference to “any person,” section 203(a)’ s inclusion of a legal representative as a “person,” and section 203(d)’s plain language defining “employer,” the district court granted Raimondo’s motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). The court did so without the benefit of oral argument, concluding that because Arias “ha[d] not alleged that [Raimondo] exercised any control over [his] employment relationship,” Raimondo as a matter of law could not be Arias’s employer.
The Ninth Circuit rejected this reasoning noting that the statutory definition of those who may be subject to liability under the FLSA’s retaliation provision include a broader spectrum of people:
Section 215(a)(3), an anti-retaliation provision, makes it unlawful “for any person … to discharge or in any other manner discriminate against any employee because such employee has filed any complaint … under or related to this chapter.” The FLSA defines the term “person” to include a “legal representative.” Id. § 203(a). Section 216(b) in turn creates a private right of action against any “employer” who violates section 215(a)(3); and the FLSA defines “employer” to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.” Id. §§ 203(d), 216(b).
Controversies under FLSA sections 206 and 207 that require a determination of primary workplace liability for wage and hour responsibilities and violations, on one hand, and controversies arising from retaliation against employees for asserting their legal rights, on the other, are as different as chalk is from cheese. Each category has a different purpose. It stands to reason that the former relies in application on tests involving economic control and economic realities to determine who is an employer, because by definition it is the actual employer who controls substantive wage and hours issues.
Retaliation is a different animal altogether. Its purpose is to enable workers to avail themselves of their statutory rights in court by invoking the legal process designed by Congress to protect them. Robinson v. Shell Oil Co., 519 U.S. 337, 346 (1997) (the “primary purpose of antiretaliation provisions” is to “[m]aintai[n] unfettered access to statutory remedial mechanisms”).
This distctive purpose is not served by importing an “economic control” or an “economic realities” test as a line of demarcation into the issue of who may be held liable for retaliation. To the contrary, the FLSA itself recognizes this sensible distinction in section 215(a)(3) by prohibiting “any person” –not just an actual employer – from engaging in retaliatory conduct. By contrast, the FLSA’s primary wage and hour obligations are unambiguously imposed only on an employee’s de facto “employer,” as that term is defined in the statute. Treating “any person” who was not a worker’s actual employer as primarily responsible for wage and hour violations would be nonsensical…
Congress made it illegal for any person, not just an “employer” as defined under the statute, to retaliate against any employee for reporting conduct “under” or “related to” violations of the federal minimum wage or maximum hour laws, whether or not the employer’s conduct does in fact violate those laws. … Moreover, “the remedial nature of the statute further warrants an expansive interpretation of its provisions. …” Id. at 857 (second omission in original) (quoting Herman v. RSR Sec. Servs., 172 F.3d 132, 139 (2d Cir. 1999)).
In line with this reasoning, the court concluded:
The FLSA is “remedial and humanitarian in purpose. We are not here dealing with mere chattels or articles of trade but with the rights of those who toil, of those who sacrifice a full measure of their freedom and talents to the use and profit of others …. Such a statute must not be interpreted or applied in a narrow, grudging manner.” Tenn. Coal, Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597 (1944).
Accordingly, we conclude that Arias may proceed with this retaliation action against Raimondo under FLSA sections 215(a)(3) and 216(b). Raimondo’s behavior as alleged in Arias’s complaint manifestly falls within the purview, the purpose, and the plain language of FLSA sections 203(a), 203(d), and 215(a)(3).
Our interpretation of these provisions is limited to retaliation claims. It does not make non-actual employers like Raimondo liable in the first instance for any of the substantive wage and hour economic provisions listed in the FLSA. As illustrated by the Court’s opinion in Burlington, the substantive provisions of statutes like Title VII and the FLSA, and their respective anti-retaliation provisions, stand on distinctive grounds and shall be treated differently in interpretation and application. Ultimately a retaliator like Raimondo may become secondarily liable pursuant to section 216(b) for economic reparations, but only as a measure of penalties for his transgressions.
Click Arias v. Raimondo to read the entire opinion.
D.Md.: Compensatory Damages for Emotional Distress Are Available Under §§ 215 and 216(b) for Retaliation Claims
Randolph v. ADT Sec. Services, Inc.
This case was before the court on several pretrial motions of the parties. As discussed here, among the issues briefed before the court was whether compensatory damages are available to a plaintiff-employee pursuing a claim of retaliation under the FLSA. The court answered this question in the affirmative, noting the issue was one of first impression within the Fourth Circuit.
Restating the parties’ respective positions, the court explained:
ADT maintains that, as a matter of law, Plaintiffs are precluded from seeking emotional distress damages because such damages are unavailable under “the very similar damages provision of the ADEA.” (ECF No. 101, at 18). Plaintiffs disagree, pointing to several circuit court opinions upholding such awards. On this issue, Plaintiffs have the better end of the argument.
The court noted that the issue presented was one of first impression in the Fourth Circuit and then examined case law from other circuit and district level courts:
Neither the Fourth Circuit nor any district court within this circuit has previously determined whether a plaintiff may recover compensatory damages from emotional distress in an FLSA action. Four circuit courts of appeal—the Sixth, Seventh, Eighth, and Ninth Circuits—have, however, either directly or indirectly addressed the issue, and all have permitted the recovery of emotional distress damages. Moore v. Freeman, 355 F.3d 558, 563–64 (6th Cir.2004) (explaining that “consensus on the issue of compensatory damages for mental and emotional distress [in FLSA cases] seems to be developing”); Broadus v. O.K. Indus., Inc., 238 F.3d 990, 992 (8th Cir.2001) (upholding a compensatory award that may have included damages for emotional distress); Lambert v. Ackerley, 180 F.3d 997, 1011 (9th Cir.1999) (affirming an award of emotional distress damages in an FLSA action); Avitia v. Metro. Club of Chi., Inc., 49 F.3d 1219, 1226–30 (7th Cir.1995) (reducing an award for emotional distress damages after finding the award excessive, but noting that such damages are available under the FLSA (citing Travis, 921 F.2d at 111–12)).
The compensatory nature of the remedies in § 216(b) supports the outcome in these cases. “The [FLSA’s] statutory scheme contemplates compensation in full for any retaliation employees suffer from reporting grievances.” Moore, 355 F.3d at 563 (citing Snapp, 208 F.3d at 934; Lanza, 97 F.Supp.2d at 740); Republic Franklin Ins. Co. v. Albemarle Cnty. Sch. Bd., 670 F.3d 563, 568 (4th Cir.2012) (citing Snapp and Lanza for the proposition that the relief provided in § 216(b) “is compensatory in nature”). The text of § 216(b) expressly provides for “such legal or equitable relief as may be appropriate to effectuate” this compensatory purpose, employing the broad phrase “without limitation” to indicate that the enumerated remedies within that section are not exhaustive. 29 U.S.C. § 216(b). “[L]ike the forms of relief mentioned [therein], damages for mental anguish are intended to compensate the injured party for harm suffered.” Moore, 355 F.3d at 564.
Certainly, an argument could be made that the availability of liquidated damages [under § 216(b) ] would be sufficient to fully compensate a plaintiff with proof of actual economic damages but only minor, subjective mental anguish occasioned by an employer’s violation of the [FLSA]. However, in a case involving only nominal economic losses but proved retaliation consisting of concerted, directed harassment, resulting in grave emotional distress, such nominal economic damages or the available doubling of those damages would be insufficient to make the plaintiff whole. Damages for mental anguish would be the necessary compensatory legal relief “appropriate to effectuate the purposes of [the anti-retaliation provision].” Bogacki v. Buccaneers Ltd. P’ship, 370 F.Supp.2d 1201, 1203 (M.D.Fla.2005) (quoting 29 U.S.C. § 216(b)); cf. Snapp, 208 F.3d at 937 (reasoning that “district courts may have to exercise some creativity in awarding relief in retaliation cases” beyond those forms set forth in the statutory text).
The court then rejected the contrary holdings of courts that had held ADEA cases to be persuasive based upon the fact that the ADEA was patterned after the FLSA, noting that such reasoning:
fails to consider that the relief authorized under both statutes must be determined ‘not in isolation, but in conjunction with the other provisions of the Act[s], the policies they further, and the enforcement framework[s] they envision.’ Dean, 559 F.2d at 1038.” The court further distinguished the ADEA legislative framework by pointing out that “[t]he ADEA includes an administrative conciliation process that is critical to its enforcement framework… [and] [l]ooking to this process, circuit courts have repeatedly held that emotional distress damages are unavailable in ADEA actions because they would impede mediation and conciliation by discouraging early resolution of ADEA claims.
Thus, the court concluded:
Because “full compensation is the evident purpose and paramount policy” in an FLSA retaliation action, “the more reasoned approach” would permit a plaintiff who makes a proper showing to recover damages for emotional distress. Id.; Moore, 355 F.3d at 563–64. Neither party here has addressed the strength or weakness of Plaintiffs’ evidence of alleged emotional distress. Until the parties do so at trial, the court cannot conclude—as a matter of law—”that damages for mental anguish should be disallowed.” Id. at 1205–06. Plaintiffs will be permitted to seek emotional distress damages through a jury trial, and their motion on this issue will, therefore, be granted.
In light of the continuing disagreement of courts regarding this issue, this might be one to watch for further appellate level developments in the future.
Click Randolph v. ADT Sec. Services, Inc. to read the entire Memorandum Opinion.
4th Cir.: Intracompany Complaints Regarding FLSA Violations Are Protected Activity Within the Meaning of Anti-Retaliation Provision of 29 U.S.C. § 215(a)(3)
Minor v. Bostwick Laboratories, Inc.
Jafari v. Old Dominion Transit Management Co.
In two new opinions, one published (Minor) and one unpublished (Jafari) the Fourth Circuit confirmed that post-Kasten, intracompany complaints of FLSA violations are sufficient to trigger the protections of the anti-retaliation provision of 29 U.S.C. § 215(a)(3).
In Minor, the lower court had dismissed the plaintiff’s complaint premised on a violation of 215, holding that internal complaints, as opposed to those to a government agency, do not constitute protected activity. Reversing the lower court, the Fourth Circuit held that such intracompany complaints are indeed protected activity and thus, trigger the protections of 215.
Framing the issue the Fourth Circuit explained:
“The sole question presented by this appeal is whether an employee’s complaint lodged within her company—as opposed to a complaint filed with a court or government agency—may trigger the protection of the FLSA’s antiretaliation provision. This is an issue of first impression in this circuit.”
Initially the court noted that neither Kasten, nor any Fourth Circuit case law was directly on point. However, following the majority of circuits to have addresssed the issue, the court concluded that the statute was ambiguous as to this point and given the remedial nature of the FLSA such informal complaints should be protected.
After discussing the ambiguity in 215’s language regarding “filing” a complaint, the court reasoned:
“The Supreme Court in Kasten determined that oral complaints could constitute protected activity within the meaning of § 215(a)(3) based upon “functional considerations.” 131 S.Ct. at 1333. In light of the ambiguous nature of § 215(a)(3)‘s “filed any complaint” language, we find that these same functional considerations dictate that intracompany complaints qualify as protected activity within the meaning of the FLSA’s antiretaliation provision.
We first consider the basic goals of the FLSA. Consistent with other authority, we conclude that, because of the statute’s remedial purpose, § 215(a)(3) must be interpreted to include intracompany complaints.
The FLSA was enacted to combat “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” 29 U.S.C. § 202(a). “The central aim of the Act was to achieve … certain minimum labor standards.” Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 292, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960). To ensure compliance with the provisions enacted to serve this purpose, Congress “chose to rely on information and complaints from employees seeking to vindicate rights claimed to have been denied.” Id. It included the antiretaliation provision in recognition of the fact that “fear of economic retaliation might often operate to induce aggrieved employees quietly to accept substandard conditions.” Id. In light of these objectives, the Supreme Court has consistently held that the FLSA “must not be interpreted or applied in a narrow, grudging manner.” Tenn. Coal, Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 64 S.Ct. 698, 88 L.Ed. 949 (1944). We likewise recognized in Ball that where the statutory language permits, “we are instructed to read the FLSA to effect its remedial purposes.” 228 F.3d at 363–64.
With the statute’s purpose in mind, Kasten stated that “an interpretation [of § 215(a)(3) ] that limited the provision’s coverage to written complaints would undermine the [FLSA’s] basic objectives.” 131 S.Ct. at 1333. The Supreme Court further observed that such a limitation on the scope of the anti-retaliation provision would circumscribe flexibility in enforcing the FLSA. Id . at 1334. As a supporting point, the Supreme Court stated that “insofar as the antiretaliation provision covers complaints made to employers …, [limiting the scope of § 215(a)(3) ] would discourage the use of desirable informal workplace grievance procedures to secure compliance with the Act.” Id. Following this reasoning, we conclude that an interpretation that limits § 215(a)(3)‘s coverage to complaints made before an administrative or judicial body would overly circumscribe the reach of the antiretaliation provision in contravention of the FLSA’s remedial purpose. Allowing intracompany complaints to constitute protected activity within the meaning of § 215(a)(3), on the other hand, comports with the statute’s objectives as described by Congress’s findings and the Supreme Court’s interpretation of those findings.
Amici offer several persuasive policy arguments in support of this conclusion. They point out that protection of internal complaints encourages resolution of FLSA violations without resort to drawn-out litigation—and that failure to protect internal complaints may have the perverse result of encouraging employers to fire employees who believe they have been treated illegally before they file a formal complaint. Our sister circuits have voiced the same concerns in concluding that § 215(a)(3) protects intracompany complaints. See Valerio v. Putnam Assocs., Inc., 173 F.3d 35, 43 (1st Cir.1999) (“By protecting only those employees who kept secret their belief that they were being illegally treated until they filed a legal proceeding, the Act would discourage prior discussion of the matter between employee and employer, and would have the bizarre effect both of discouraging early settlement and creating an incentive for the employer to fire an employee as soon as possible after learning the employee believed he was being treated illegally.”).
Indeed, the majority of circuits to consider the question of whether intracompany complaints are protected activity within the meaning of “filed any complaint” have answered in the affirmative, basing their decisions on the FLSA’s remedial purpose.FN8 See, e.g., Hagan v. Echostar Satellite, LLC, 529 F.3d 617, 626 (5th Cir .2008) (“We adopt the majority rule, which allows an informal, internal complaint to constitute protected activity under Section 215(a)(3), because it better captures the anti-retaliation goals of that section.”); Lambert v. Ackerley, 180 F.3d 997, 1004 (9th Cir.1999) (en banc) (finding that § 215(a)(3) covered internal complaints based on its remedial purpose); Valerio, 173 at 42 (same); EEOC v. White & Son Enters., 881 F.2d 1006, 1011 (11th Cir.1989) (same); Love v. RE/MAX of Am., Inc., 738 F.2d 383, 387 (10th Cir.1984) (same); Brennan v. Maxey’s Yamaha, Inc., 513 F.2d 179, 181 (8th Cir.1975) (same); see also EEOC v. Romeo Cmty. Sch., 976 F.2d 985, 989 (6th Cir.1992) (holding that an employee’s complaints to her employer were sufficient to trigger protection of the FLSA’s antiretaliation provision without explaining its rationale). Cf. Brock v. Richardson, 812 F.2d 121, 124–25 (3d Cir.1987) (holding that, because of the FLSA’s remedial purpose, a retaliatory firing based on an employer’s belief that an employee had filed a complaint—even when he had not—was prohibited by § 215(a)(3)). Thus, we adopt the majority view by holding that the remedial purpose of the FLSA requires intracompany complaints to be considered protected activity within the meaning of its antiretaliation provision.
Supporting our conclusion is the Secretary of Labor and the EEOC’s consistent position that intracompany complaints are included within the meaning of “filed any complaint.” We afford agency interpretations that do not have the force of law, like agency manuals and litigation documents, respect to the extent that they possess the “power to persuade.” Christensen v. Harris Cnty., 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)). Factors we consider when determining whether an agency interpretation has the power to persuade include “the thoroughness evident in its consideration, the validity of its reasoning, [and] its consistency with earlier and later pronouncements.” Skidmore, 323 U.S. at 140; see also Cunningham v. Scibana, 259 F.3d 303, 306–07 (4th Cir.2001).
Here, the EEOC has set forth the position that intracompany complaints constitute “fil[ing] any complaint” within the meaning of § 215(a)(3) in the compliance manual it issues to field offices. 2 EEOC Compliance Manual § 8–II(B) & 8–II(B) n. 12 (2006). In addition, both the Secretary and the EEOC have argued in litigation that intracompany complaints are covered by the FLSA’s antiretaliation provision. See, e.g., Br. for the Sec. of Labor and the EEOC as Amici Curiae at 26–30; Br. for the Sec. of Labor as Amicus Curiae, Kasten v. Saint–Gobain Performance Plastics Corp., 570 F.3d 834 (7th Cir.2009) (No. 08–2820). Thus, although it is not determinative, because the Secretary and the EEOC have consistently advanced this reasonable and thoroughly considered position, it “add[s] force to our conclusion.” Kasten, 131 S.Ct. at 1335.
We conclude by emphasizing that our holding that intracompany complaints may constitute “fil[ing] any complaint” under § 215(a)(3) does not mean that every instance of an employee “letting off steam” to his employer constitutes protected activity. Kasten, 131 S.Ct. at 1334. To the contrary, “the statute requires fair notice” to employers. Id. To protect employers from unnecessary uncertainty, “some degree of formality” is required for an employee complaint to constitute protected activity, “certainly to the point where the recipient has been given fair notice that a grievance has been lodged and does, or should, reasonably understand that matter as part of its business concerns.” Id. Therefore, the proper standard for the district court to apply is the aforementioned test articulated in Kasten: whether Minor’s complaint to her employer was “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.” Id. at 1335.
Minor’s allegations here meet the standard we have articulated to the extent required to survive a motion to dismiss. The facts as alleged in her complaint indicate that Minor expressed her concerns regarding FLSA violations to the chief operating officer of her company in a meeting specifically called for that purpose. Minor also alleges that this executive-level employee agreed to investigate her claims. At this stage, these allegations are sufficient. We note again that we express no view as to whether Minor should ultimately prevail under the standard we have articulated. We simply hold that, on the facts alleged, her complaint survives a motion to dismiss.”
Click Minor v. Bostwick Laboratories, Inc. to read the entire published Opinion. Click Jafari v. Old Dominion Transit Management Co. to read the companion unpublished Opinion. Also of interest is the DOL/EEOC Amici Brief filed in Jafari.