In last year's Kasten decision, the U.S. Supreme Court concluded that oral complaints about wage payment violations are protected behavior under the Fair Labor Standards Act's anti-retaliation provisions. For procedural reasons, the Supreme Court declined to consider the employer's argument that the FLSA's anti-retaliation protections only apply to complaints to a governmental agency, and not to internal grievances.

Last month, the Fourth Circuit Court of Appeals (which includes North Carolina and South Carolina) joined a number of other federal appellate courts in concluding that employers may not retaliate against employees who complain about unpaid overtime or other FLSA violations. In Minor v. Bostwick Labs, Inc., the plaintiff alleged that she was terminated after complaining to management that her supervisor was altering her timesheets to remove overtime hours. The district court dismissed the complaint, reading the FLSA's anti-retaliation provisions to apply only to complaints filed with a governmental agency.

The Fourth Circuit reversed this decision, remanding the case for further proceedings. While noting that Kasten does not directly control the issue of coverage, the court expansively read the FLSA to cover internal complaints. The Fourth Circuit noted the Supreme Court's broad reading of anti-retaliation provisions in the FLSA and other federal labor laws, refusing to adopt a restrictive literal interpretation of the statutory language. The court stated that failure to protect internal complaints would incentivize employers to fire employees before they could file a complaint with a governmental agency.

The Fourth Circuit joined eight other federal appellate circuits in finding protection for internal complaints. Employers should recognize that any employee complaints, formal or informal, can serve as the basis for a later claim of retaliation.