The Ninth Circuit recently issued an important decision in Hollis v. R&R Restaurants, Inc., clarifying the reach of the Fair Labor Standards Act’s (FLSA) anti-retaliation protections. The ruling broadens potential liability for employers—and individuals acting on their behalf—when taking adverse employment action against an employee after they have brought a wage claim.
Hollis v. R&R Restaurants, Inc. Case Overview
Zoe Hollis, a dancer at Sassy’s, a Portland, Oregon exotic dancing club, filed a class action lawsuit alleging that the club’s owners misclassified dancers as independent contractors and violated wage and hour laws under the FLSA. Following the lawsuit, Frank Faillace—an owner and manager of both Sassy’s and another venue, Dante’s—canceled Hollis’s scheduled performances at Dante’s and barred Hollis from future opportunities, citing Hollis’s lawsuit against Sassy’s.
Hollis then amended their complaint to include a retaliation claim. The district court initially sided with the defendants, reasoning that Hollis could not pursue an FLSA retaliation claim because Hollis was not an employee of Dante’s, where the alleged retaliatory act took place.
The Ninth Circuit’s Decision on FLSA Protections
The Ninth Circuit reversed, holding that the FLSA’s anti-retaliation provision applies broadly to “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The court made clear that:
- The key employment relationship for FLSA retaliation purposes is the one implicated in the underlying wage complaint.
- The retaliator need not be the plaintiff’s direct employer, and could include anyone acting in the interest of the employer, even indirectly and without an agency relationship.
- The plaintiff need not be an employee of the retaliator at the time of the adverse action.
To prevail on the retaliation claim, Hollis would still have to be an employee of Sassy’s but the court remanded the case back to the trial court to determine whether Hollis qualified as an employee of Sassy’s under the FLSA’s “economic realities” test.
The Ninth Circuit rejected arguments that retaliation claims require an underlying wage claim to be timely or successful, emphasizing that the FLSA safeguards individuals who simply “file a complaint.” The court further held that a defendant cannot justify retaliation as a legitimate attempt to protect its business interests, explaining that employers may not take adverse actions intended to deter or punish an employee from asserting FLSA rights.
The Ninth Circuit relied on its prior holding in Arias v. Raimondo, to reach this conclusion. In that case, the court held that the plaintiff could bring an FLSA retaliation claim against his former employer’s attorney for seeking to have him deported to thwart his wage and hour lawsuit against the employer. The Hollis v. R&R Restaurants, Inc. case shows the Ninth Circuit pushed the FLSA’s retaliation protections further than in the Arias case.
Implications for Employers
This decision underscores the expansive scope of potential FLSA retaliation liability. Both employers and individuals acting in their interest, such as owners or managers, may be held responsible for retaliatory acts, even if these acts occur in related businesses or through indirect means.
Employers should carefully review their practices to ensure that no one with managerial authority takes actions that could be construed as retaliation against employees or former employees engaged in protected activity. Common pitfalls include canceling work opportunities, terminating contracts, demotion, loss of work hours, or otherwise reducing or eliminating paid work in response to FLSA complaints.
Employers should also ensure that independent contractors are properly classified. If not, improperly classified individuals may be entitled to wages and benefits under the FLSA and state or local wage and hour laws, including protection under the FLSA’s anti-retaliation provision.
Key Takeaways and FLSA Best Practices for Employers
- Review all independent contractor relationships to ensure compliance with applicable laws, or if the worker should be considered an employee.
- Train management and supervisors to identify and avoid behavior that could be perceived as retaliatory. If a complaint, claim, or lawsuit is lodged, caution is advised before any adverse employment action is taken.
- Consult counsel before taking any adverse employment action against individuals who have engaged in protected activity, particularly in cases involving affiliated businesses.
- Document decisions carefully, ensuring that written communications, such as emails and notices, are not based on and do not reference pending or past legal complaints.
- Review classification policies and practices regularly to confirm that workers are appropriately categorized, as misclassified workers may still be protected under the FLSA’s anti-retaliation provisions.
How Miller Nash Can Help Guide Decisions to Avoid Retaliation Claims
If you have questions about whether you can legally take a certain action with respect to an employee or prior employee, our employment team can help.
The legal issues impacting this topic are and will continue to be ever-changing (Employment Law in Motion!), and since publication of this blog post, new or additional information not referenced in this blog post may be available.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
