Fair Labor Standards Act
John M. Collins, Esquire
Collins & Weinberg
47 Memorial Drive
Shrewsbury, MA 01545
Tel. (508) 842-1556
Fax (508) 842-3703
II - Retaliation Protection
III - Enforcing the FLSA
IV - Personal Liability of Chiefs and Supervisors
II - Retaliation Protection
Employers that discriminate or retaliate against an employee who files an FLSA complaint or participates in resulting proceedings are liable for fines, damages, attorney’s fees and, in the case of willful violations, liquidated damages. In 1977, the FLSA was amended (29 U.S.C. §216(b)), and courts have interpreted the new provisions to allow successful plaintiffs to receive emotional damages, punitive damages, front pay and liquidated damages.
Similar to many “whistleblower protection” laws, section 15(a)(3) of the Act subjects employers to fines of up to $10,000 for the first offense and fines of up to $10,000, plus up to six months in prison, for subsequent offenses.
A discharged employee may be court may impose civil remedies including back pay, attorney’s fees, and, in the case of willful violations, liquidated damages.
Ordered Reinstated. Whether or not reinstatement is ordered, a Discrimination Protection
Employee making a claim for discrimination under section 15(a)(3) must show:
· Engagement in a statutorily protected activity;
· Adverse employment action; and
· A reprisal for having engaged in such protected activity.
The shifting of burdens of proof in FLSA cases are similar to those in most retaliation claims, whether before the Labor Relations Commission or Commission Against Discrimination, for example. Initially, the current or former employee must show that he or she engaged in protected activity, (e.g., filing FLSA claim or helping someone who did). In addition, they must show that the employer took adverse employment action (e.g., termination, reduction in pay or benefits, pass over for promotion, reassignment to less desirable job, etc.).
The employer must then offer a “legitimate, non-discriminatory reason” for the action. Once this is done, the burden shifts to the employee to show that the reason offered was pretextual and “that the true reason was an effort to discriminate or retaliate for the employee’s assertion of FLSA rights.”
Occasionally courts will be confronted with a “mixed motive” case. This happens when the employer’s action resulted from both proper and improper motivation. In such case, the employer must show that the adverse action would have occurred even in the absence of the protected activity.
The anti-discrimination provision of section 15(a)(3) probably also apply to persons other than a complainant’s employer. If a third party attempts to have an employer take adverse action against an employee for asserting their FLSA rights, said third party could be liable. In the police area, this might occur if the DPW Superintendent (or Selectperson) contacted the chief complaining about an officer who objected to working paid details for other town departments at less than the officer’s FLSA overtime rate.
The following are among the activities protected by the FLSA’s anti-retaliation provisions:
· Filing a suit against one’s employer;
· Filing a complaint with the U.S. Department of Labor; and
· Cooperating with a DOL Wage and Hour Division investigator.
Most courts have found that informal complaints regarding FLSA violations, even just to supervisors, are covered by the Act’s anti-retaliation provisions. In 2004, a Federal District Court case from Illinois refused to dismiss a retaliation case brought under the FLSA, stating it was unclear whether the law protects workers who make FLSA complaints on behalf of co-workers.
The Court explained that the FLSA has “two clauses setting out protected expression under the statute – the complaint clause and the testimonial clause.” The employee alleged she engaged in protected activity when she told her employer that it was violating the FLSA by failing to pay some of her co-workers proper overtime wages.
In refusing to dismiss the suit, the Court cited a 10th Circuit case in which the Court noted that the FLSA’s anti-retaliation provisions are “sufficiently broad to encompass conduct taken on behalf of others.”
Chiefs should not avoid taking appropriate employment actions simply because of FLSA complaints by employees. However, any adverse actions taken shortly after an employee makes an FLSA complaint, testifies or is otherwise involved in a protected activity, will require clear justification. Involving the municipality’s labor counsel may help in evaluating the likelihood that discipline will be viewed as retaliatory.
The various Circuit Courts have interpreted the availability of emotional damages differently. In Travis v. Gary Community Mental Health Center, the Court ruled that workers whose employers discriminate against them for raising FLSA claims may be awarded compensation for emotional distress and punitive damages. Several years later the same Circuit refined the standard for proving emotional distress in an FLSA case. “The distress need not cross some threshold of severity to be a basis for damages.”
In Moore v. Freeman, a case in which a city worker proved he was fired for complaining about his wages, the court approved emotional or mental distress damages.
Other courts have let emotional damage awards stand. In Lambert v. Ackerly, the court said it would only reverse the jury’s award if the amount was “grossly excessive or monstrous.”
Some courts allow punitive damages for FLSA retaliation even if there is no award for actual, compensatory damages in a case. However, the 11th Circuit stated that any award for damages suffered by a worker must “put the plaintiff in the place she would have been absent the employer’s misconduct.”
In lieu of reinstatement, “front pay” is designed to compensate plaintiff’s by putting them in the same financial position that they would have been were they to be reinstated. Some courts may refuse to award front pay in FLSA cases where the plaintiff also receives liquidated (double) damages.
There is some disagreement among the Circuits as to whether or when injunctive relief is available in FLSA retaliation cases. Some limit it to cases brought by the Department of Labor, not private individuals. Surprisingly, in light of its ruling in Snapp, the 11th Circuit interpreted the FLSA’s anti-retaliation language expansively, holding that preliminary injunctive relief is available to address violations of the Act’s anti-retaliation provisions.
There is some disagreement among the Circuit courts as to how much discretion courts have in awarding liquidated damages (an amount equal to the improperly withheld wages) in retaliation cases. The 5th and 7th found liquidated damages mandatory unless there is an explicit finding that the employer acted in good faith.
On the other hand, the 6th and 8th Circuits treat liquidated damages as discretionary.
Municipal employers may face enforcement actions in the form of civil suits initiated by one or more employees, as well as by the U.S. Department of Labor, for any violations of the Fair Labor Standards Act (FLSA). In addition, the U.S. Justice Department may initiate criminal prosecutions against municipal officials, including chiefs, that commit willful violations of the FLSA. Lastly, the DOL may sue to collect civil monetary penalties.
The bulk of FLSA enforcement efforts focus on investigating alleged or potential violations and are resolved short of litigation. Rarely is criminal prosecution involved.
The DOL is authorized to investigate employment records and practices. A subpoena is not required for DOL representatives to inspect records. However, it occasionally issues a subpoena to bring records for their compliance officers to review. In such cases, municipal counsel may file objections in federal district court if the request is overly broad or burdensome.
Most investigations are triggered by a complaint from a current or former employee. However, the DOL will occasionally target a certain type of employer or industry segment for investigation. The existence of repeated complaints in one area, as well as the potential for large scale remedial and/or enforcement action, plays a role in where DOL assigns its resources. Traditionally, this has focused more on private sector employers.
Complainants are treated confidentially and DOL need not (and will not) reveal their names.
A “conciliation” option is often used by DOL, rather than an investigation, where a complaint alleges only minor violations affecting only one or a few employees. A phone call often resolves the matter. However, when additional violations are uncovered, or the facts are unclear, the matter may be converted to an investigation.
A DOL investigator may conduct an on-site visit. After presenting his or her credentials, the investigator will explain the procedure to the employer and seek permission to confer in private with certain employees. (Employers or their representatives are not permitted to sit in on employee interviews.) Making work space and conference area available, and supplying requested records, is generally involved.
Investigators normally look back over a two (2) year period. However, especially where DOL anticipates that litigation will result, and the investigator has received prior approval from an area director and a regional solicitor, the investigation may go back three (3) years.
Should an employer have discontinued any monetary violations and made whole any employee’s back wages before the start of an investigation, these will not be treated as violations.
At the end of the investigation, the compliance officer will offer to meet with the chief and other municipal officials about the investigative findings. One of three outcomes is likely:
· No violations – no action;
· Violations – explain how to correct; and
· Back wages owed – ask to compute and pay amount.
Obviously, the best way to avoid a DOL investigation is to comply with the FLSA. Listening to employee concerns may avoid having them file a DOL complaint. Even if a complaint is filed, chances are that a speedy, of not informal, resolution will result where a cooperative employer promptly documents compliance.
Since many FLSA requirements are technical, periodic “self-audits” are worthwhile. Municipal officials, accountants, labor counsel or outside consultants may be able to provide such service. The DOL may issue an “opinion” if properly requested, but this is rarely necessary.
Primary areas of concern to municipal police departments are the classification of supervisory personnel (“exempt”) and the calculation of overtime pay.
Should a chief be contacted by a DOL investigator, the mayor, manager, selectmen, etc., should be notified. While it is not necessary to have municipal counsel overly involved, it is worthwhile engaging in some level of consultation before the investigator arrives.
Investigators follow a prescribed set of guidelines. However, they retain some flexibility on how they go about their work. Cooperation is strongly recommended! They are entitled, without a subpoena, to inspect all existing payroll records, job descriptions and related documents. The employer need not, however, prepare summaries or otherwise review its own records to point out instances of violations.
Posting required DOL notices of employee rights under the FLSA may seem like inviting complaints. However, failure to do so, while not directly subjecting the employer to a fine, may result in a court extending the amount of time employees have to file FLSA complaints.
The FLSA provides employees with the option of suing their employers in federal or state court for violations of the Act’s minimum wage and overtime provisions. Requested remedies may include back pay and/or overtime, liquidated (i.e., double) damages, interest, legal fees and costs. They may also sue for employer retaliation in the form of discrimination or discharge for filing a complaint testifying, supplying information, or initiating a suit to enforce their FLSA rights.
A municipality is included in the Act’s definition of an employer. Of particular interest to chiefs, and other supervisors, is their inclusion as well, since an “employer” includes:
Any person acting directly or in the interest of an employer in relation to an employee and includes a public agency.
If the DOL files a suit for back pay or overtime, or seeks injunctive relief, this cuts off an employee’s rights to sue for the same things individually. However, where an individual files suit before the DOL does so, the employee’s suit may continue.
While “class action” lawsuits cannot be brought under the FLSA, a similar option is available. A suit in which similarly situated individuals give written consent to participate may be initiated.
In general, suits for back pay and overtime must be brought by either the employee or the Secretary of Labor within two (2) years of an alleged violation. A three (3) year limit applies if the violation was “willful”. This means the employer knew or showed reckless disregard as to whether its conduct violated the FLSA.
While the FLSA does not mention interest on back pay, many courts have awarded it to employees to help compensate them for the loss of use of the money between the time of the violation and the court judgment. The interest percentage figure varies from court to court.
Where a court awards liquidated damages (see below), it should not also award pre-judgment interest. This is because the former is essentially a penalty for wrongdoing for delaying payments and the latter would essentially amount to awarding interest on interest. As the Supreme Court explained:
To allow an employee to recover the basic statutory wage and liquidated damages, with interest, would have the effect of giving an employee double compensation for damages arising from delay in the payment of the basic minimum wages.
The issue of an employer’s good faith does not enter into a court’s award of pre-judgment interest.
The FLSA authorizes the awarding of liquidated damages for violations of its minimum wage and overtime provisions. The amount of such award is typically equal to the amount of wages improperly withheld; thus the term “double back pay”. If, however, an employer demonstrates that it acted in good faith, having reasonable grounds for believing it was not violating the Act, a court has discretion in excusing part or all of the liquidated damages amount. Unless interest is awarded, courts will generally award some amount of liquidated damages, even where good faith was shown, in order to make employees whole for the delay in receiving back wages.
Public policy precludes employees from waiving their FLSA rights. This includes a waiver of liquidated damages, unless the DOL is involved and approves. Therefore, even where an employee cashes a “settlement” check or signs a release form, this will not prevent that person for subsequently suing for liquidated damages and back pay. To avoid such situations, municipal counsel should review any potential settlements with DOL personnel in advance.
The payment of an employee’s reasonable attorney’s fees (not an oxymoron!!) is required by the FLSA. In determining the amount of any award, the trial court considers such things as the time spent on the case, the complexity of the issues, and the amount of the back pay or overtime awarded.
It is possible to have attorney’s fees exceed the amount of the award or settlement.
Court costs, such as witness fees and various expenses of the suit, may be awarded to successful employee-plaintiffs.
Municipal counsel should be certain to resolve the question of attorney’s fees in any settlement negotiations. Otherwise, a separate motion for such fees may be filed. Also, where an employee rejects a settlement offer, and the ultimate recovery is lower, counsel should point this out to the court. It may result in a reduced attorney’s fees award.
Another thing to keep in mind is that attorney’s fees for appellate level work (following trial) are not necessarily included. This is in the discretion of the appellate court.
Under what is commonly referred to as the “American Rule”, an employer that prevails in an FLSA suit is not entitled to recover any of its legal fees. An exception may be possible if the suit was clearly frivolous, vexatious or in bad faith.
Where the employee brings the suit, rather than the DOL, municipal counsel might object to the inclusion of any witness fees for such individual.
Lastly, should an employee seek to initiate a “similarly situated” suit, the employer’s level of cooperation is not unlimited. An employer can challenge whether certain employees are, in fact, “similarly situated,” even they share the same job title. It can also seek to assure that notices from the court “soliciting” opt-in plaintiffs do not give the appearance that the court views the action as meritorious.
IV - Personal Liability of Chiefs and Supervisors
Violations of the Fair Labor Standards Act (FLSA) may expose “employers” to both monetary damages and criminal penalties. In certain instances, a chief or superior officer could be treated as an employer under the Act. Personal liability is a possibility in such cases. Fortunately, most FLSA claims involving police departments focus on the municipality, since the city or town treasury is the most readily available source for paying any judgment. However, chiefs or other supervisory personnel could be named as individual defendants, especially where a disgruntled employee perceives the alleged violation as “personal”.
Under § 203(d) of the FLSA, an employer is defined as:
Any person acting directly or indirectly in the interest of an employer in relation to an employee.
While courts are generally reluctant to do so, according to a case from the 1st Circuit, this definition could expose any supervisor to personal liability for FLSA violations. Fortunately, must courts focus on the economic reality of a given supervisor’s position in an agency’s operation.
In determining a supervisor’s status as an employer under the FLSA, courts look at such things as their job description, financial interest in the operation, and the degree to which the supervisor is involved in the hiring and firing of employees. (Those chiefs, for example, who are the “appointing authority” might be more exposed than others.) The Supervisor’s role in defining terms or conditions of employment on a day to day basis, and the amount of pay or other compensation, also factor into a court’s analysis of whether the supervisor falls within the Act’s definition of an employer.
A court may decide that there is more than one employer (e.g., town, Town Manager and Police Chief), each of which may be separately liable for alleged FLSA violations.
The 1996 case of Bergstrom v. University of New Hampshire involved a claim that the school’s Director of Public Safety (Campus Police Chief) was an employer for FLSA purposes. The court ruled that supervisor met the definition of employer and could be personally liable for gender discrimination under the FLSA’s Equal Pay provisions. The employee alleged that her supervisor controlled her responsibilities and her status in the department’s rank structure. The Director also filled out an annual performance appraisal and had some discretion concerning her salary (within a range pre-set by university authorities.) Although the court acknowledged that the “chief” did not have “unfettered control” over the employee’s pay or duties, or any ownership interest in the University, it concluded that these were “not essential ingredients for individual supervisor liability.”
Chiefs that serve as the appointing authority are most at risk for personal liability under the FLSA. Even chiefs that are not the official appointing authority may find that, in practice, they are the de facto appointing authority since the Selectmen, Manager, etc. relies exclusively on the chief for all hiring and promotional decisions. This is most often the case when it comes to civilian clerks, dispatchers or other non-sworn employees.
Chiefs might consider asking the mayor, selectmen, or manager for an indemnification agreement to cover possible FLSA claims. While this would not prevent the chief from being sued, it could assure that legal fees and any award are paid by the municipality. This could be incorporated into a chief’s employment contract or be executed as a separate agreement.
In the private sector, suits against managers as “employers” are most likely to be filed when the company is bankrupt or in serious financial condition. In the governmental setting, even municipalities that “cry poverty” rarely lack the ability to satisfy FLSA judgments. Therefore, unless an employee has a grudge, there is little practical benefit in suing a chief or superior officer. However, an employee’s motivation is not grounds for dismissal of an individual defendant in an FLSA suit.
Over the past decade the Supreme Court, on two occasions has addressed the issues of the immunity of states from suits initialed by individual employees alleging FLSA violations. In the 1996 case of Seminole Tribe of Florida v. Florida,  the Supreme Court ruled that states were immune from such suits in federal court. And in the 1999 case of Alden v. Maine, the court held that the same immunity applied on state court actions.
While states themselves are immune from such individual suits (unless the states consent), the same protection does not extend to their officials. Where the claim alleges specific actions were taken by named officials, those officials may be named as defendants. In such cases, their personal assets are exposed to satisfy any judgment.
Similar personal exposure also extends to elected officials. In the 1991 5th Circuit case of Lee v. Coakoma County, Miss., the court ruled that an elected sheriff could be personally liable for FLSA claims filed by his deputies. In that case, the sheriff was the appointing authority. He also had the power to set deputies’ pay and to fire them.
Other courts have ruled that the individual members of a school board, as well as the Secretary of State, could also be personally liable, as employers, where their authority included control over compensation and personnel policies.
 Blackie v. State of Maine, 75 F.3d 716 (1st Cir. 1996).
 See McDonell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.E.2d 668 (1973).
 Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.E.2d 207 (1981).
 Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.E.2d 471 (1977); Hackney v. Arlington County Police Dep’t., 4th Cir. No. 96-2845, May 11, 1998.
 Soto v. Adams Elevator Co., 941 F.2d 543 (7th Cir. 1991).
 Reich v. Davis, 50 3d 962 (11th Cir. 1995).
 Avitia v. Metro Club of Chicago, Inc., 49 F.3d 1219 (7th Cir. 1995).
 Lambert v. Ackerley, 180 F.3d 997 (9th Cir. 1999), cert. Denied 528 U.S. 1116, 120 S.Ct. 936, 145 L.E.2d 814 (2000); EEOC v. White & Sons Enters., 881 F.2d 1006 (11th Cir. 1989), but see, Lambert v. Genesee Hosp., 10 F.3d 46 (2nd Cir. 1993) and O’Neill v. Allendale Mut. Ins. Co., 956 F.Supp. 661 (E.D. VA. 1997).
 Reed v. Monahan’s Landscape Co., N.D. Ill., No. 03-C-7081, March 4, 2004.
 McKenzie v. Renberg’s Inc., 94 F.3d 1478 (10th Cir. 1996).
 Travis v. Gary Community Mental Health Center, 921 F.2d 108 (7th Cir. 1990).
 Avitia v. Metropolitan Club of Chicago, 49 F.3d 1219 (7th Cir. 1995).
 Lambert v. Ackerly, 180 F.3d 997 (9th Cir. 1999).
 See Shea v. Galaxie Lumber & Constr. Co., Ltd., 152 F.3d 729 (7th Cir. 1998).
 Snapp v. Unlimited Concepts, Inc., 208 F.3d 928 (11th Cir. 2000).
 See Avitia, supra.
 Bailey v. Gulf Coast Transportation, Inc., 7 Wage & Hour Cas. 2d (BNA) 968 (11th Cir. 2002).
 Lowe. V. Southmart Corp., 998 F.2d 333 (5th Cir. 1993); Heidtman v. County of El Paso, 5 Wage & Hour Cas. 2d 385 (5th Cir. 1999); Shea v. Galaxie Lumber & Constr. Co., Inc., 152 F.3d 729 (7th Cir. 1998).
 Blanton v. City of Murfreesboro, 856 F.2d 731 (6th Cir. 1988); Braswell v. City of El Dorado, Ark., 187 F.3d 954 (8th Cir. 1999).
 Mitchell v. Roma, 265 F2d 633 (3rd Cir. 1959).
 29 U.S.C. § 203(d).
 McLaughlin v. Richland Shoe, 486 U.S. 128, 108 S.Ct. 1677, 100 L.E.2d 115 (1988).
 Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.E.2d 1296 (1945).
 29 U.S.C. §216(b).
 Portal-to-Portal Act, 29 U.S.C. §260.
 29 U.S.C. §216(b).
 Beovich v. C.G. Gredurg, Inc. D. Or., Civ. No. 92-920-FR, Nov. 10, 1994.
 Hopkins v. Gen. Elec. Co., 93 F.Supp. 424 (D. Mass. 1950).
 Haworth v. Nevada, 56 F.3d 1048 (9th Cir. 1995).
 Skrove v. Heiraas, N.D. , Civ. No. 9874, March 12, 1981.
 Brennan v. Heard, 491 F.2d 1 (5th Cir. 1974).
Notes to Part IV.
 Do No Van v. Agnew, 712 F.2d 1509 (1st Cir. 1983).
 See Bergstrom v. University of New Hampshire, 943 F. Supp. 130 (D.N.H. 1996).
 See Agnew, citing Falk v. Brennan, 414 U.S. 190 (1973).
 Bergstrom v. University of New Hampshire, 943 F. Supp. 130 (D.N.H. 1996).
 Seminole Tribe of Florida v. Florida,517 U.S. 44, 116 S.Ct. 1114, 134 LE.2d 252 (1996).
 Alden v. Maine, 527 U.S. 706, 119 S.Ct. 2240, 144 L.E.2d 636 (1999).
 Lee v. Coakoma County, Miss. 937 F.2d 220 (5th Cir. 1991).
 Delsignore, supra; Larson Sol Bd of Pinella’s County, Fl, 820 F. Supp. 596 (M.D. Fla. 1993).