Labor & Employment Law Daily FLSA’s anti-retaliation provision covers all ‘persons,’ not just those engaged in commerce
Thursday, September 20, 2018

FLSA’s anti-retaliation provision covers all ‘persons,’ not just those engaged in commerce

By Lisa Milam, J.D.

A Utah real estate company that fired a father-son pair of construction workers after a Department of Labor investigator showed up, failed to upend a district court’s judgment in the DOL’s favor on its allegations the company obstructed its investigation into overtime violations, and retaliated against its workers. Affirming the lower court’s finding, the Tenth Circuit rejected the employer’s contention on appeal that the holding was in error because the DOL failed to establish the defendant was an enterprise engaged in commerce. Such a showing is not required to establish a breach of the FLSA’s anti-retaliation provision (Acosta v. Foreclosure Connection, Inc., August 15, 2018 [published September 18, 2018], Lucero, C.).

Retaliation. Foreclosure Connection, Inc. (FCI) buys real estate, renovates homes, and rents or resells properties. A father and son pair of “independent contractors” who did construction work for FCI filed an overtime complaint with the DOL. The next day, the foreman told them not to come into work—that there was not enough work for them. Later that same day, the DOL investigator met with FCI’s manager/part-owner at FCI’s offices, and requested company records and other information on its employees. The manager told the investigator the company didn’t have any employees—that all of its workers were independent contractors. That night, the father and son called the foreman to see whether there was work for them the next day. The foreman told them they were fired. The manager blamed them for the DOL investigation, the foreman said.

Obstruction. With a DOL investigation underway, the manager held a meeting with FCI’s workers and instructed them not to cooperate with the investigator. He also handed out independent contractor agreements for them to sign, but directed them not to date the agreements, and to tell the investigator that they couldn’t remember when they signed the documents. (The meeting was surreptitiously recorded by one of the workers.) The company submitted the agreements to the DOL, including an ostensible agreement signed by the discharged father, his signature apparently forged.

The DOL filed a complaint alleging that FCI obstructed its investigation and retaliated against its workers. After a bench trial, the court ruled in the DOL’s favor, imposing a permanent injunction and awarding back pay and liquidated damages to the discharged father and son.

Enterprise coverage irrelevant. On appeal, FCI contended that the lower court’s decision was in error because the DOL had not established that the company was “an enterprise engaged in commerce” within the meaning of the FLSA. But Section 215(a)(3), the statute’s anti-retaliation clause, doesn’t include this phrase; the provision reaches “any person,” defined under Section 203(a) as “an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.” Citing the reasoning of the numerous sister circuits to have addressed the issue, and their unanimous conclusion that the anti-retaliation provision extends beyond enterprises engaged in commerce, the Tenth Circuit also held that the FLSA’s prohibition on retaliation applies to any “person,” regardless of whether the entity qualifies as an enterprise engaged in commerce.

Causation. FCI also argued that the district court’s finding of causation was erroneous because the father and son were terminated before the manager even knew they had gone to the DOL. However, the discharged duo had two interactions with the foreman on the date in question: in the morning, he told them not to come in that day because there was no work for them; that night, he told them that they “weren’t working anymore” and they were “terminated.” That was the same day the DOL investigator showed up—they were fired after the manager met with the investigator.

Pretext. To support its additional contention that the DOL did not establish pretext, FCI pointed to a recorded call in which the foreman states the two workers were fired for making a report to city inspectors. But there was also direct evidence they were fired for contacting the DOL: the son testified that during the phone call in which they were fired, the foreman told him that the manager blamed them for the DOL complaint. The inconsistent reasons alone were enough from which the district court, following a bench trial, could find pretext.

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