news
Options
newsnews-publications

"Fifth Circuit Joins Sister Circuits in Holding That Employees May Recover Emotional Distress Damages in FLSA Retaliation Suits"
Nicole Eichberger, Minia Bremenstul
www.lawandtheworkplace.com
December 21, 2016

Fifth Circuit Joins Sister Circuits in Holding That Employees May Recover Emotional Distress Damages in FLSA Retaliation Suits

By Nicole Eichberger and Minia Bremenstul on December 21, 2016
 

On December 19, 2016, the Fifth Circuit joined the Sixth and Seventh Circuits in holding that “employees” under the FLSA may recover emotional distress damages in FLSA retaliation actions, finding that the district court erred by refusing to instruct the jury on the availability of emotional distress damages for an employee’s retaliation claim. In so holding in Pineda, et al. v. JTCH Apartments, L.L.C., et al., the Fifth Circuit did affirm the district court’s ruling that only an “employee” may bring a retaliation claim under the FLSA.

Santiago Pineda lived in an apartment owned by JTCH Apartments, L.L.C. and leased by his wife, Maria Pena. Pineda did maintenance work for the apartment complex, and JTCH discounted Pena’s rent as part of his compensation. Pineda filed suit against JTCH and its owner and manager, Simona Vizireanu, seeking unpaid overtime under the FLSA. Three days after serving JTCH with the summons, Pineda and Pena received a notice to vacate the apartment for nonpayment of rent and a demand for an amount equal to the rent reductions Pena received during Pineda’s employment. Pena then joined the suit. The amended complaint included FLSA retaliation claims under 29 U.S.C. § 215(a)(3) based on the back rent JTCH demanded after Pineda filed suit.

During the jury trial, the district court granted the defendants’ motion for judgment as a matter of law on Pena’s retaliation claim, finding she was not protected because she was not an “employee” under the FLSA. The district court denied Pineda’s request for an instruction to the jury on the availability of emotional distress damages for his retaliation claim. The jury found for Pineda on his overtime wage and retaliation claims. Pineda and Pena both appealed. Pineda argued the district court should have instructed the jury on emotional distress damages, and Pena argued she was “within the zone of interests protected by the FLSA retaliation provision and thus should have also been able to seek such damages from the jury.”

On appeal, the Fifth Circuit held that the FLSA’s broad damages provision allows an employee to potentially recover for emotional injuries suffered as a result of an employer’s retaliation. The Fifth Circuit’s holding is consistent with two sister courts that have analyzed this question and with a number of other circuits that, although not directly considering this issue, have upheld jury awards for emotional damages in FLSA retaliation cases.

This holding resolves disagreement among district courts in the circuit, which differed in the interpretation and application of the Fifth Circuit’s prior decisions that stated the remedies provisions of the FLSA and ADEA “should be interpreted consistently.” Based on this instruction, some district courts concluded that the Fifth Circuit’s holding in Dean v. American Security Insurance Co., a 1977 case holding that emotional distress damages are not available under the ADEA, necessarily meant such damages were also unavailable under the FLSA.

In Pineda, the Fifth Circuit explained that its prior case law interpreting the ADEA’s remedies provision “[was] no obstacle” to its holding with respect to the question posed under the FLSA. First, Dean was decided before the FLSA was amended to allow private retaliation suits and to include “such legal or equitable relief as may be appropriate” for retaliation claims. Second, Dean focused on a standalone provision in the ADEA, which similarly allows “such legal or equitable relief” but contains the phrase “as may be appropriate to effectuate the purposes” of the statute. Dean concluded that allowing emotional distress damages under the ADEA would frustrate its purposes, emphasizing the ADEA’s preference for administrative dispute resolution procedures. This phrase is not present or incorporated into the FLSA. The Fifth Circuit stated that the absence of this phrase “warrant[s] a different result when it comes to the FLSA retaliation provision.” In support of its decision, the Court juxtaposed the ADEA’s “administrative conciliation and mediation scheme” with the FLSA’s authorization for employees to immediately file suit “to provide compensation and deterrence.

The Fifth Circuit also addressed Pena’s argument that she, too, should be entitled to emotional damages because, although she was not an employee of JTCH, “she was nonetheless protected by the FLSA because as the spouse of an employee retaliated against for his complaints, she was within the zone of interests the statute protects.” In support, Pena cited Thompson v. North American Stainless, LP, which used a “zone of interests” test to determine standing to sue for retaliation under Title VII. The Fifth Circuit stated Pena’s attempt to use Thompson in support of her argument “ignores a critical distinction” between the FLSA’s substantive anti-retaliation provision and the remedies provision of Title VII: the FLSA provides it is only unlawful “to discharge or . . . discriminate against any employee because such employee has filed any complaint,” 29 U.S.C. § 215(a)(3) (emphasis added), whereas Title VII allows a “person claiming to be aggrieved” to file a civil suit. 42 U.S.C. § 2000e-5(f)(1). Thus, the FLSA’s anti-retaliation provision extends only to individuals who are “employees” under the statute.

Based on this decision, employers should take heed that awards for employee retaliation claims under the FLSA may be drastically increased by the inclusion of possible emotional distress damages, at least in the Fifth, Sixth, and Seventh Circuits. Employers can take some comfort, however, in the Fifth Circuit’s confirmation that only “employees” may assert FLSA retaliation claims. Employers thus should not be hesitant to seek dismissal if a plaintiff asserting an FLSA retaliation claim is not an “employee” under the statute.