Summary: This article gives a brief overview of the problems that the “manager rule” can cause high-level employees trying to raise concerns about pay issues, as well as the limits of that rule.
Categories: At-will; Wrongful termination; Retaliation Claims; Fair Pay; Wage and Hour; Tipped Employees
If your employer turns on you and starts taking actions against you because you raised a complaint protected by law, you may be suffering unlawful retaliation. However, not all laws treat all complaints—and all whistleblowers—the same. As a result, even clear retaliation might not always cross over the line into actually being illegal.
In particular, what if you are a high-level management or human resources employee in Texas and you discover and report that your employer is violating the Fair Labor Standards Act—for example, by not paying overtime or the minimum wage properly? Ordinarily, that would be protected from retaliation. See 29 U.S.C. § 215(a)(3). But if you did not “step outside” of your role with the employer in making your report, you might not have legal protection from retaliation after all. This article is meant to give a basic overview of this so-called “manager rule” of the FLSA, and to explore the limits of when employers can use it as a shield.
An employee’s complaint that their employer is violating the law, including the FLSA, is itself usually protected by law. To be protected, first and foremost that complaint should give the employer “fair notice” of an actual or potential legal violation. Otherwise, the employer can fight against a later retaliation claim by saying it had no idea that what was being reported was illegal. However, in cases like Starnes v. Wallace, the Fifth Circuit Court of Appeals (which covers Texas) has added an extra requirement. It has held that a protected complaint under the FLSA should also involve “an employee step[ping] outside of his normal job role and assert[ing] a right adverse to the company.”
The key impact of this rule is that if you are a manager or HR employee, courts may conclude that a report you make that merely “expresses concern” about a pay issue does not have legal protection. In that situation, even if your employer decides to go after you to “kill the messenger,” you might not have legal recourse. Just doing your job and running an issue up the chain of command would not have legal protection in that situation because, the argument goes, your action is mainly about protecting your employer.
This rule is most often used against HR employees or managers because their job can require them to be “mindful of the needs and concerns” of the company as well as employees. Therefore, a complaint where you are not just acting as a messenger, but more of an advocate—either for yourself or other employees—is more likely to have legal protection. Similarly, a complaint about a situation that is outside of your power to resolve is also more likely to be protected.
Fortunately, despite employers’ efforts, the Fifth Circuit has not applied this “manager rule” outside of complaints about employers violating the FLSA. This is likely because, as district court cases like Donald v. Plus4 Credit Union have noted, that rule’s focus on job duties is inappropriate for anti-discrimination laws like Title VII of the Civil Rights Act of 1964.
As a 2021 Sixth Circuit case, Jackson v. Genesee County Road Commission, held, Title VII’s anti-retaliation protections are much broader than those the FLSA and cover many forms of opposition to discrimination. In that case, the Sixth Circuit held that an HR employee’s investigation of employees’ complaints of race discrimination was legally protected because the HR employee genuinely believed the complaints and took steps within her job duties to stop the discrimination. The Fifth Circuit should take heed from Jackson and similar cases out of the First and Second Circuits, and should move to protect employees by limiting the manager rule.
If you believe you have been retaliated against and are unsure whether you are protected by an anti-retaliation law, you should talk to an employment attorney like those at Rob Wiley, P.C.