In a new decision that will impact Carolinas employers, the Fourth Circuit Court of Appeals recognized the validity of a plaintiff’s retaliation claim based on a lawsuit filed by his former employer. In Darveau v. Detecon, Inc., the employee filed a complaint against his former employer seeking compensation for unpaid overtime under the Fair Labor Standards Act. Two weeks later, the employer filed suit against the former employee, arising out of a terminated sales contract that the employee allegedly hid to meet his goal for an annual bonus. In response to this action, the employee amended his own complaint to include a retaliation claim, contending that the employer’s lawsuit constituted retaliation under the FLSA.
The employer argued that it could not have retaliated against the plaintiff because he was no longer its employee when it filed the lawsuit against him. The Fourth Circuit, however, rejected this argument. Relying on Title VII retaliation cases to interpret similar provision of the FLSA, the court held that the scope of the anti-retaliation provision of the FLSA extends beyond workplace-related or employment-related retaliatory acts and protects both former and current employees from retaliation. Thus, a plaintiff asserting a retaliation claim under the FLSA need only allege that his employer (or former employer) retaliated against him by engaging in an action that could have well dissuaded a reasonable worker from making or supporting a wage claim. The Court determined that the employee’s claim should be permitted because he alleged that his employer filed a lawsuit against him with a retaliatory motive and without a reasonable basis in fact or law.
The decision whether to file a claim against an employee or ex-employee should be made with caution. An employer should carefully consider whether the goals sought to be achieved from filing suit are worth the risk of defending against a potential retaliation claim or the perception by a court that the countersuit is retaliatory. Additionally, this case serves as a reminder that retaliation does not end when employment ends, and that action taken against a former employee can result in retaliation claims under federal law.