Last week, EmployNews reported a North Carolina Court of Appeals decision concluding that internal complaints to management were not protected activity under the state workplace retaliation law absent some complaint or at least threat of complaint to a government agency. Earlier this year, the Fourth Circuit Court of Appeals (which includes North Carolina and South Carolina) made clear that this reasoning does not apply to retaliation claims under some federal laws such as the Fair Labor Standards Act.

In Jafari v. The Old Dominion Transit Management Co., the plaintiff was terminated shortly after complaining about the employer's pay practices. In response to his FLSA retaliation claim, the employer sought to dismiss the suit, noting that the statute only prohibits retaliation against employees who "file a claim." The district court agreed, finding that this language only prohibits retaliation when an employee files a complaint with a government agency.

The Fourth Circuit disagreed, remanding the matter for further proceedings. In its Kasten decision, the U.S. Supreme Court expansively interpreted the FLSA's retaliation language, but left open the question of whether an internal complaint was "filed." Subsequent appellate court decisions, including those in the Fourth Circuit interpreted this language to include internal complaints.

Despite the North Carolina state court decision, employers should consider internal complaints to raise the potential for later retaliation claims. Any adverse action taken against such employees should be justified by documented evidence that the employee is being treated consistently for legitimate business reasons.