Hunton Employment & Labor Perspectives

The Fair Labor Standards Act, 29 U.S.C. 215(a)(3) ("FLSA") forbids an employer from retaliating against an employee for making prior FLSA complaints.  Simple concept, one would think.  But with most employment related legal issues, the "devil" is often in the details.  What is an "employee," exactly, under the FLSA?  Does it include an applicant for employment, who is retaliated against by a prospective employer?  A divided panel of the U.S. Court of Appeals for the Fourth Circuit recently ruled that the answer is "no," rejecting a claim that a prospective employer violated the FLSA by rescinding an employment offer to an applicant after learning about a FLSA lawsuit the applicant filed against her prior employer.  Dellinger v. Sci. Applications Int'l Corp., 2011 U.S. App. LEXIS 16635 (4th Cir. Aug. 12, 2011).

The plaintiff, Natalie Dellinger, alleged that she was offered a job with the defendant, Science Applications International Corp. ("SAIC"), in August 2009.  The offer was contingent on Dellinger passing a drug test, completing a number of forms, and transferring a security clearance from her former employer, CACI, Inc.  Dellinger disclosed on one of the forms that she had filed a FLSA lawsuit pending against CACI.  SAIC subsequently rescinded its job offer, and Dellinger sued SAIC for retaliation.  She claimed that SAIC withdrew its offer based on her revelation that she had engaged in FLSA protected activity, and that such action violated the FLSA's prohibition against retaliation by an employer against any "employee."
 
The U.S. District Court for the Eastern District of Virginia granted SAIC's motion to dismiss, and Dellinger appealed.  In a two-to-one decision, the Fourth Circuit affirmed, noting that the FLSA's anti-retaliation provision was governed by the FLSA's definition of "employee."  The Court declined to extend the FLSA's reach to prospective employees, noting that the statutory term "does not exist in a vacuum" but is in fact defined elsewhere in the statute as "any individual employed by an employer."  By defining "employee" in this way, the Court observed, "Congress was referring to the employer-employee relationship, the regulation of which underlies the act as a whole, and was therefore providing protection to those in an employment relationship with their employer."  Given this limited construction of the statutory text, the Court concluded that it was "not free to broaden the scope of a statute whose scope is defined in plain terms, even when 'morally unacceptable retaliatory conduct' may be involved."
 
Circuit Judge Robert King dissented, arguing that the majority failed to apply the logic of the U.S. Supreme Court's opinion in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), in which the Supreme Court unanimously ruled that the term "employee" in Title VII of the Civil Rights Act of 1964 included former employees.  The majority responded that Robinson involved a claim by a former employee against his former employer, not by an applicant (like Dellinger) who had never worked for the defendant employer.
 
While the Dellinger decision is precedent setting, it is not clear what, if anything, employers (especially those outside of the Fourth Circuit) can take from it.  It goes without saying that an employer takes a sizable risk if it denies employment, or rescinds an employment offer, based on an applicant's prior assertion of federally protected rights.  We will be watching closely whether other Circuit Courts address this issue and, if so, how they rule.