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Sixth Circuit: Complaints About Unpaid Reimbursements Are Protected Too

by | Jul 11, 2024 | Employment Law, Federal Law Update, Retaliation, Wage: Minimum Wage, Wage: Overtime, Wage: Tipped Employees, Wrongful Termination |

In a win for employees everywhere, in Caudle v. Hard Drive Express, Inc., the United States Court of Appeals for the Sixth Circuit recently found that an employee’s complaints about unpaid reimbursements could constitute “protected activity” under the Fair Labor Standards Act (“FLSA”) Fair Labor Standards Act (“FLSA”) and thus, his employer could not retaliate him for making these complaints.

As a refresher, it is illegal for employers to retaliate against employees who make complaints about not being paid all wages due. This includes complaints about not being paid at least the minimum wage, not being paid overtime, or not being paid for all hours worked. Importantly, under both the FLSA and the Ohio Minimum Fair Wage Standards Act (“OMFWSA”) the employee does not need to be correct that a violation has occurred, so long as their complaint is made in good faith.

Of note, as our wrongful termination lawyers have previously blogged, complaints about pay issues are also protected under the National Labor Relations Act (“NLRA”), even if they don’t constitute “protected activity” under the FLSA or the OMFWSA.

Best Minimum Wage Attorney Blogs On Point:

What is the National Labor Relations Act and How Does It Affect Your Case?

How Broad Are The FLSA Antiretaliation Provisions?

Caudel Complains, Gets Fired:

Stephen Caudle, a former truck driver for Hard Drive Express, Inc., encountered various issues during his employment, including disputes over pay and reimbursement for truck maintenance he performed on his dime. This all boiled over on February 15, 2019, when Caudle got into an argument with his boss (and Hard Drive’s owner) via text message:

Caudle: How does that vacation pay work I need to take some time off here soon

*  *  *

Caudle: Never mind buddy I’m not gonna play any games with you I had text first two weeks of March off my wife’s getting operated on.

Boss: However you want to use it. It will not be paid until you work 2 full weeks after. Not letting anyone pull any tricks. According to the labor department, I’m giving this as a gift and I do not have to pay if an employee tries to pull a fast one.

Caudle: I understand man don’t worry about it people only treat people they work for the way they treat

Boss: Another word, I make loans with no interest and still expect to pay to have something done for the truck.

Caudle: That’s right your truck your company I’ll get my money don’t worry about it I’m not gonna argue with you I’ll go to the proper channels I’ve been down this road before I’ve let it go because things are going pretty good but you’re the want to change not me

Boss: Your the one that doesn’t understand. I help all the people that work for one way or another. Like make loans. Then not charge them any interest like a bank would. Then ask someone to take a truck to get something taken care of and they want paid for it. It has made me very bitter. I don’t mind helping anyone, but get the s*** I get after I have help them not going to happen anymore. I’m no longer a bank.

Boss: Can I call you later?

Caudle: I give you 10 minutes buddy I’m on my way to the labor board I’m done playing with you you call me will work this out and Pandora’s box won’t open very disappointed and you.

Boss: Bud, I have nothing to be scared of, go ahead. You can threaten me all you want doesn’t bother me one bit. Their [sic] is absolutely nothing in the laws that says I have to give you paid days off. Why do you think I sat it up the way I did, so employees can’t screw me. You have been paid every nickel that you earn. You what you think is best. Park the truck and make sure it is in the same shape you receive it, because I can hold your checks until I check out the truck. It is in the driver’s handbook. I will be coming to get the truck at the beginning of the week.

Boss: Also, Michigan is an at will state. That means I can get rid of someone for any reason.

*  *  *

Boss: Michigan is an (At Will) state. This means I can terminate anyone for no reason. In your case, you were and have several times been argumentative with me and the office. I decided you no longer needed to be employed with Hard Drive Express

After being fired, Caudle sued Hard Drive, contending he had been fired in retaliation for making protected wage complaints, in violation of the FLSA and the Michigan Wage Protection Act (“WPA”). However, the trial court later granted summary judgment to Hard Drive and dismissed Caudle’s claims, finding that “Caudle’s complaint immediately prior to being terminated related only to his entitlement to vacation pay, a fringe benefit not protected under the FLSA.” In other words, because the trial court viewed Caudle’s complaint as being just about paid time off, and not about the minimum wage or overtime, it concluded that he had not engaged in protected activity.

Unsatisfied with the trial court’s conclusion, Caudle appealed. Specifically, Caudle argued that the trial court had gotten it wrong because the broader context of his complaints put Hard Drive and his boss on notice that he intended to make a report to the government about unpaid wages in the form of reimbursements. The Sixth Circuit Court of Appeals agreed and overturned the trial court’s judgment:

Although the district court’s interpretation of the exchange is a plausible reading, other messages in the text chain cut the other way. For example, when [Boss] initially brought up the reimbursement issue, Caudle responded: “That’s right your truck your company I’ll get my money don’t worry about it I’m not gonna argue with you I’ll go to the proper channels I’ve been down this road before.” Defendants argue that by “I’ll get my money” and “I’ll go to the proper channels,” Caudle was referring to vacation pay and his objections to the paid-time-off policy; Caudle argues he was referring to repair costs. Given the muddled nature of the back-and-forth between the two, the message could support either reading. Additionally, Caudle’s statement that he was on his way to the labor board came in response to a message from [Boss] complaining that he was asked to reimburse truck maintenance even though he made no-interest loans to drivers.

*  *  *

Because a reasonable jury could find that these messages put Defendants on notice that Caudle intended to report them for their asserted failure to compensate drivers for repairs, summary judgment should not have been granted.

While the opinion does not explicitly say so, the reason the complaints about reimbursements are protected and complaints about paid time off are not turns on how each issue ultimately affects wages. Paid time off is pay for time not worked, and therefore not being paid for this time will not impact the regular rate an employee is paid for hours that are worked. Unpaid reimbursements, on the other hand, can impact the regular rate, and potentially drop the employees hourly rate below the minimum wage once the amount they paid out of pocket (and need to be reimbursed for) is taken into account.

Of course, Caudle is still a long way off from winning his case. On remand, he must now go forward to trial and convince a jury that what he was really complaining about was not getting reimbursed or paid properly, and that Hard Drive fired him for these complaints, and not his complaints about unpaid time off or because of his tone in the text messages.

Best Minimum Wage Attorney Blogs On Point:

What Damages Can I Get For Wage Violations And Retaliation Under FLSA?

Can My Job Retaliate For Pay Violation Complaints?

What Should I Do If I Have A Pay Issue At Work?

If you are having issues at work related to pay, you should contact the experienced wage and hour lawyers at Spitz, the Employee’s Attorney for guidance before making any complaints. As the Caudel case demonstrates, not all complaints are protected, and sometimes a single word (or text message) can make the difference between whether your complaint is protected or not. Spitz, The Employee’s Law Firm stands out as a top choice for employees facing minimum wage and overtime problems and our employment lawyers can guide you on ensuring that your complaints are protected before you make them. Spitz offers free initial consultations to discuss the specifics of your case. Moreover, Spitz operates on a no-fee guarantee basis, ensuring that clients only pay if their attorneys win. This commitment to client satisfaction and success makes Spitz the go-to option for individuals seeking focused legal representation in wage and hour cases.

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