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Employment Law Blog

Category: FLSA

Monday, March 28, 2011

FLSA Protects Oral Complaints, But What About Internal Complaints?

Last week, the Supreme Court held in Kasten v. Saint-Gobain that the Fair Labor Standard Act’s (FLSA’s) antiretaliation provision protects both oral and written complaints. The FLSA creates employment rules regarding minimum wage, hours, and overtime pay. The antiretaliation provision makes it unlawful for employers: “to discharge or in any other manner discriminate against any employee because such employee has filed any complaint.” The only question the Court resolved was whether oral, as well as written, complaints constitute “fil[ing] any complaint.”

While it is helpful for employers to know that oral complaints “count,” the biggest unresolved question is whether internal complaints, that is complaints from the employee directly to a private employer, are afforded FLSA protection. The Supreme Court “state[d] no view” on the issue, leaving it to the lower courts to decide. Well, many lower courts have already decided. In those jurisdictions, I anticipate the pre-Kasten determinations will control as the Supreme Court expressly avoided the issue. But, what about courts that have yet to decide the issue?

I expect courts that have yet to rule on this issue will find that the FLSA protects internal complaints to private employers. Why? First, most courts that have considered the issue have held that internal complaints are protected. Second, it helps to look at how the Supreme Court defined “filed any complaint” in Kasten: “[A] complaint is ‘filed’ when ‘a reasonable, objective person would have understood the employee’ to have ‘put the employer on notice that [the] employee is asserting statutory rights under the [Act].’” I think it is pretty clear that an internal complaint meets this standard. In dissent, Justice Scalia likewise notes that although the majority claims to leave unanswered the question of whether internal complaints are covered: “[T]he opinion adopts a test for ‘filed any complaint’ that assumes a ‘yes’ answer.”

So, what is the bottom line for employers? Are internal complaints to private employers afforded antiretaliation protection under the FLSA?

1. Look for precedent from the lower courts in your jurisdiction on this issue. Kasten does nothing to overrule these decisions.
2. Predicting how courts will rule on an issue can never be done with certainty. That said, if you’re in a court that hasn’t ruled on the issue, I think chances are that internal complaints will be covered.

Phil Miles is an attorney in McQuaide Blasko’s Labor and Employment Law Practice Group and publisher of Lawffice Space, an employment law blog.

Posted by Philip Miles on 03/28 at 07:09 AM
Monday, April 20, 2009

Indian Reservation Business Subject to Federal Wage Law

A Ninth Circuit court of appeal has concluded that the overtime provisions of the Fair Labor Standards Act (“FLSA”) applies to a business located on an Indian reservation and owned by Indian tribal members. The court also ruled that the United States Department of Labor has the authority to enter the Indian reservation to inspect the books of that business for enforcement purposes.

The case, titled Solis v. Matheson, pitted the Department of Labor against a retail store known as Baby Zack’s Smoke Shop, located on trust land within the Puyallup Indian Reservation in the State of Washington. 

The court acknowledged that Indian tribes generally operate under the legal shelter of “sovereign immunity.” The court wrote: “Indian tribes have a special status as sovereigns with limited powers. Indian tribes are dependent on, and subordinate to the federal government, yet retain powers of self government.”

Sovereign immunity is a bit of a misnomer, because tribes are not invulnerable to litigation. As the court wrote, “those powers may be limited, modified, or eliminated by Congress.”

Finding the FLSA to be a “statute of general applicability” designed to “achieve certain minimum labor standards with respect to industries engaged in commerce,” the court determined that Baby Zack’s Smoke Shop was regulated by the statute.

The court noted that some of the goods sold by Baby Zack’s have been shipped in from locations outside the State of Washington. Though located on tribal land and operated by a member of the tribe, “Baby Zack’s is a purely commercial enterprise engaged in interstate commerce selling out-of-state goods to non-Indians and employing non-Indians.”

Regulating this commercial enterprise, concluded the court, would not impinge upon matters of tribal self-government. The court added that the tribe had not enacted comparable labor laws, nor did it contend that such laws would preempt federal law.

Although law in the area of Indian sovereign immunity has been slow to evolve in relation to the rapid growth of tribal commercial enterprises, the Ninth Circuit’s decision can be characterized as part of a trend towards regulating labor relations of Indian tribes, particularly where the rights of a non-Indian workforce are at stake.

In 2007, as reported in our Legal Update here (page 2), in 2007 a court found that the National Labor Relations Act (NLRA) applied to an Indian tribe operating a casino. (San Manuel Indian Bingo and Casino v. National Labor Relations Board (D.C. Circuit, February 9, 2007).

The Ninth Circuit in Matheson also noted cases where courts had applied federal labor laws to Indian tribes, including cases where OSHA applied to a tribal farm employing non-Indians and ERISA applied to an Indian-owned saw mill. There are also a number of reported cases where courts have declined to apply federal labor laws to Indian tribal matters.

It is reasonable to expect labor law litigation against Indian tribes to increase, and, further, that the U.S. Supreme Court will sooner or later offer clarification due to conflicting lower court rulings.

Read the Ninth Circuit opinion (pdf)

Submitted by:
Christopher W. Olmsted, Esq.
Barker Olmsted & Barnier, APLC

Posted by Christopher W. Olmsted on 04/20 at 10:37 PM
Employment LawFLSA
Wednesday, January 07, 2009

U.S. Department of Labor’s Wage & Hour Division Collects Over $185 Million in 2008

The U.S. Department of Labor’s Wage and Hour Division (WHD) announced in a January 2, 2009 press release its enforcement data for Fiscal Year (FY) 2008. In FY 2008, WHD recouped back wages totaling $185,287,827 for 228,645 workers.

WHD touted this statistic as a “40 percent increase over the FY 2001 figure.” The press release notes: “Since FY 2001, WHD has recouped more than $1.4 billion back wages for over two million workers.”

However, WHD has been the subject of recent criticism, and in its press release WHD failed to note that the 2008 figures represent a decrease from 2007. In FY 2007, WHD collected $220,613,703 for 341,624 workers. (Link to 2007 stats.)

Alexander J. Passantino, acting administrator for the Wage and Hour Division, offers the statistics in support of his request for additional funds to increase enforcement measures. “These continued strong enforcement results demonstrate that our comprehensive approach is working. We also urge Congress to provide the funds we have requested in the president’s FY 09 budget to hire additional investigators.”

President-elect Obama is likely to fulfill Passantino’s wishes, although Passantino will probably not be around to see it happen. In July 2008, responding to a Government Accountability Office report , Senator Obama sent a letter to Secretary of Labor Elaine Chao, expressing concerns that the Department of Labor is not fulfilling its mission to prevent and remedy violations of federal minimum wage and overtime laws. In his letter, he was critical of Mr. Passantino’s testimony before a Senate committee.

“GAO’s conclusions about how the Department exercises its responsibilities to working Americans raise serious, but addressable, issues. Fixing these problems may require bipartisan cooperation, or in some cases additional funding, but other needed reforms are in the sole discretion of the Department, and can be instituted unilaterally.”

In December 2008, President-elect Obama named Democratic Rep. Hilda Solis of California to serve as labor secretary.

Submitted by:
Christopher W. Olmsted, Esq.
Barker Olmsted & Barnier, APLC

Posted by Christopher W. Olmsted on 01/07 at 12:37 AM
Employment LawFLSALabor Law
Thursday, July 31, 2008

Department of Labor Opinion Examines Whether Restaurant Must Pay For Shoes

The Department of Labor has released a new opinion letter in which it examines a restaurateur’s policy specifying employee shoes.  The questions posed are: (1) Are the shoes part of a uniform, such that the employer must pay for them? (2) May the employer arrange for the purchase of the shoes and deduct the cost from the employee’s pay?

The DOL considered the following facts:

The Employer operates restaurants and requires employees to wear “dark-colored” shoes without prescribing any particular quality, brand, style, model, or type. Aside from color, the only other requirements are that they not be open-toed and that, for safety reasons, they not have a slippery sole. Employees may wear shoes they already own when hired or may purchase shoes from any vendor they may choose. Employees are free to wear the shoes outside of work.

The Employer has arranged a program through which employees may, solely at their option, purchase shoes from a shoe manufacturer. The manufacturer offers over 60 different slip-resistant shoes in a broad spectrum of styles and in numerous dark colors. If an employee chooses to purchase shoes from this vendor, the employee may either pay the vendor directly or the Employer will pay the vendor and deduct the amount of the payment from the employee’s paycheck over a number of weeks. In some instances, the deductions may cause the remaining amount of the employee’s paycheck to fall below the minimum wage for each hour worked during that pay period. If the employee requests that the Employer pay for the shoes through a deduction, the employee must do so by submitting a request in writing describing the shoes to be purchased, requesting the Employer pay for the shoes, and authorizing the Employer to withhold future wages in an amount sufficient to reimburse the purchase costs. Neither the Employer, nor any person acting in its interests, realizes any profit or other benefit from the purchase program,

The DOL opined that the footwear was not a uniform. Quoting its Field Operations Handbook the opinion letter states: “If an employer merely prescribes a general type of ordinary basic street clothing to be worn while working and permits variations in details of dress, the garments chosen by the employees would not be considered to be uniforms.” More restrictive policies may lead to the opposite conclusion. “[W]here the employer does prescribe a specific type and style of clothing to be worn at work, e.g. where a restaurant or hotel requires a tuxedo or a skirt and blouse or jacket of a specific or distinctive style, color, or quality, such clothing would be considered uniforms.”

The DOL also examined whether the Employer may offer to advance the money necessary for employees to voluntarily purchase shoes from the shoe manufacturer and recoup the advance through payroll deductions where those deductions may cause the employee’s paycheck to fall below the minimum wage for each hour worked in the pay period.

The DOL determined that such a practice was acceptable under the FLSA. The FLSA includes as part of “wages” the “reasonable cost” to the employer for furnishing any employee with board, lodging or other facilities. The DOL opined that the shoes qualified as “other facilities.” “[A] deduction for the actual cost of the shoes is allowed under [the FLSA], even if it reduces the amount of the employee’s cash wages below the minimum wage, so long as the employer does not profit or include any administrative costs.”

The DOL letter notes that the rule would be no different for tipped employees.

To review the DOL opinion letter, click here.

Submitted by:
Christopher W. Olmsted, Esq.
Barker Olmsted& Barnier, APLC

Thursday, July 17, 2008

Wage and Hour Division Criticized

The U.S. Department of Labor’s Wage and Hour Division has failed to effectively enforce federal wage laws, according to a Government Accountability Office report issued on July 15th, 2008.

From fiscal years 1997 to 2007, the number of WHD’s enforcement actions decreased by more than a third, from approximately 47,000 in 1997 to just under 30,000 in 2007. The WHD defended the trend. It stated that it decided to enforce fewer, but more time-consuming comprehensive claims. It also states that the decrease resulted from more careful screening out of unmerited claims at the intake stage. WHD admits that part of the decrease is attributed to a 20% reduction in investigative staff.

The GAO found that the WHD rarely imposed statutory penalties on employers. WHD assessed penalties for 6 percent of the enforcement actions conducted between 2000 and 2007.

The GAO cited several examples where the WHD found violations of federal labor law, but failed to follow through with enforcement.

In one case, a homeless woman receiving free room and board while working as a night attendant at a nursing home alleged her employer had failed to pay her wages for an entire year. According to the WHD, the employer admitted it had failed to pay any wages to the night attendant and considered the room and board to be pay, but stated it did not have any money to pay the back wages. The WHD dropped the case and advised the night attendant of her right to file a private lawsuit. The employer was still in business as of June 2008.

An another case, the an employee alleged he was not paid for overtime. The WHD investigator did not perform any actions for 15 months citing a backlog of cases. Investigation was dropped after 15 months when the investigator saw a news article showing that the business in question had closed

The GAO further criticized the WHD for focusing on too narrow a range of industries. “WHD focused on the same industries from 1997 to 2007. The agency primarily targeted four industry groups: agriculture, accommodation and food services, manufacturing, and health care and social services.” The WHD did not react to information from its commissioned studies on low wage industries in which FLSA violations are likely to occur. The GAO concludes “WHD may not be addressing the needs of workers most vulnerable to FLSA violations.”

WHD’s data tracking hides its inefficiencies. “The extent to which WHD’s activities have improved FLSA compliance is unknown because WHD frequently changes both how it measures and how it reports on its performance,” reports the GAO.  “When agencies provide trend data in their performance reports, decision makers can compare current and past progress in meeting long-term goals.” WHD did just the opposite. “While WHD’s long-term goals and strategies generally remained the same from 1997 to 2007, WHD often changed how it measured its progress, keeping about 90 percent of its measures for 2 years or less.”

As quoted in the New York Times, a Labor Department press release highlighted the pay it has recovered for employees. Recovery of wages “more than doubled to $220,613,703 in 2007 from $96,719,108 in 1997.” The DOL said that 341,624 employees received back wages in 2007, up from 189,244 10 years earlier.”  The DOL added: “The “Wage and Hour Division is delivering pay for workers, not a payday for trial lawyers.”

To view the GAO reports, click here and here.

To view the New York Times article, click here.

Submitted by:
Christopher W. Olmsted, Esq.
Barker Olmsted & Barnier, APLC

Posted by Christopher W. Olmsted on 07/17 at 01:42 AM
Employment LawFLSAHuman ResourcesLabor Law
Thursday, May 15, 2008

Litigators Predict Lawsuits Regarding Employee Compensation For After-Hours PDA Emails

Should employees be paid for time spent after hours reviewing business-related emails on their PDAs? The question has probably not occurred to most employers. But wage and hour class actions have been built upon lesser issues.

The general rule is that non-exempt employees must be paid for all hours worked. If an employee is “suffered or permitted” to work, even though the employer has not instructed or requested that he do so, the time is compensable working time. The rule does not depend on whether the work is performed before or after regular work hours.

Plaintiff attorneys might argue that it doesn’t matter whether the employer expected the non-exempt employees to monitor after-hours emails or whether the employees did so on their own initiative. Time was spent on work-related emails and the employees should be compensated, they would argue.

Social norms play a role. Late phone calls and meetings may be seen as an intrusion, but few see sending an after-hours email as a violation of etiquette. Add to that the seemingly irresistible impulse driving some people to constantly check emails on their PDAs. The use of some devices have been jokingly compared to crack cocaine addictions.

Attorneys in various legal forums have been discussing the topic lately. The Wall Street Journal’s Law Blog recently addressed the topic here. The topic has been discussed on other internet forms, including here and here.

So far there have been no reports of wage and hour litigation involving PDAs, but it would be prudent for employers to take precautionary measures. Some commentators recommend that employers require employees to obtain permission prior to using the PDAs after hours. Others recommend giving PDAs to exempt employees only. All would agree that employers should not ignore the issue and they ought to devise an employee policy regarding the use of PDAs.

Submitted by:
Christopher W. Olmsted
Barker Olmsted & Barnier, APLC

San Diego Employment Law Attorneys

Tuesday, May 06, 2008

U.S. Department of Labor Releases New elaws Tool To Help Employers Comply With Federal Law

On May 6, 2008, the Department of Labor issued the press release below concerning a new online tool that may be useful to determine which federal laws apply to the employer. The online tool takes the user through a series of questions regarding industry, size, geographic location, and other issues. Then the guide lists particular laws which may apply to the employer, complete with links describing posting requirements and other information regarding the applicable laws.

The U.S. Department of Labor today unveiled an elaws advisor that helps employers determine which of the department’s recordkeeping, reporting and notice requirements apply to them.

The new FirstStep Recordkeeping, Reporting and Notices elaws Advisor has been integrated into a FirstStep suite of advisors that also includes the revised and expanded FirstStep Poster Advisor and FirstStep Employment Law Overview Advisor.

“These Internet tools will make it easier for small business employers to learn about and comply with the federal laws that apply to them,” said Secretary of Labor Elaine L. Chao.

The elaws advisors are free, Web-based tools designed to help employers and workers understand the department’s major employment laws. By asking a series of questions, the advisors simulate a conversation with a Department of Labor expert and guide users to customized information explaining the requirements of each law.

By asking questions such as size of business, location and type of industry through multiple choice or yes and no questions, the FirstStep Employment Law Overview Advisor determines which federal employment laws apply to each user. The advisor then provides information from the Labor Department’s Employment Law Guide on the basic provisions of these laws.

The new FirstStep Recordkeeping, Reporting and Notices Advisor summarizes the paperwork requirements for each law. The FirstStep Poster Advisor, which can be used to download and print off Labor Department posters for free, was revised to include information on where the posters must be displayed in the workplace, and what size and language requirements apply to each.

This suite of FirstStep elaws advisors is available at

The department offers more than 25 other elaws advisors covering a wide range of employment law topics, such as minimum wage and overtime, child labor, veterans’ workplace rights, health and retirement benefits, and workplace safety and health. For more information, visit

Submitted by:
Christopher W. Olmsted
Barker Olmsted & Barnier, APLC

Posted by Christopher W. Olmsted on 05/06 at 01:08 PM
Employment LawFLSAHuman ResourcesLabor Law
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