The plaintiff
filed suit in April 2009 alleging that she had been paid less than a male
co-worker performing the same job and that she had been denied overtime pay for
jobs she held more than six months earlier (when she had been promoted to a new
job). “The statute of limitations for
the FLSA is two years for non-wilful violations and three years for wilful
ones. 29 U.S.C. § 255(a).” As long
ago as 1946, the Supreme Court had held
that “employees
may not, either prospectively or retrospectively, waive their FLSA rights to
minimum wages, overtime, or liquidated damages. “ The plaintiff’s employment
agreement in this case provided in relevant part that:
To the extent the law allows an employee to bring legal
action against Federal Express Corporation, I agree to bring that complaint
within the time prescribed by law or 6 months from the date of the event
forming the basis of my lawsuit, whichever expires first.
The employer argued that employers are allowed to shorten
the limitations period for claims brought under other statutes, like Title VII,
and should be able to shorten the limitations period for claims brought under
the FLSA. However, the Court rejected
that argument because, unlike the FLSA, employees are permitted to privately
settle and waive their claims under Title VII.
In addition, in a startling observation, the Court stated:
Second—and
relatedly—an employer that pays an employee less than minimum wage arguably
gains a competitive advantage by doing so. See
Citicorp Indus. Credit, Inc. v. Brock, 483 U.S. 27, 36 (1987). An employer
who refuses to hire African-Americans or some other racial group does not. The Court’s rationale for prohibiting
waiver of FLSA claims is therefore not present for Title VII claims.
The employer next argued that employees are allowed to waive
their right to a judicial forum under the FLSA by signing arbitration
agreements because the prohibition against private waivers has been held to
only apply to substantive rights and not procedural ones. However, the Court distinguished this
precedent by noting that waiving the judicial forum still allows for the
effective vindication of the employee’s claim, while the shortened limitations period
in the plaintiff’s employment agreement “at issue here does the opposite.” Therefore, because the limitations provision
in the employment agreement operated as a waiver of her claims, “it is invalid.”
The Court held that this reasoning applied with equal force
to the plaintiff’s EPA claims because Congress amended the FLSA in 1963 to
include the EPA. Moreover, in contrast
to what the Court said (above) about the anti-competitive effects of Title VII,
it made the following observation about the EPA:
Second, the Supreme Court’s rationale for barring waiver of
FLSA claims appears fully applicable to claims under the Equal Pay Act. An
employer who pays women less than a lawful wage might gain the same competitive
advantage as an employer who pays less than minimum wage. Indeed the Court has
said that “[t]he whole purpose of the [Equal Pay Act] was to require that the[]
depressed wages [of women] be raised, in part as a matter of simple justice to
the employees themselves, but also as a matter of market economics[.]” Corning
Glass Works v. Brennan, 417 U.S. 188, 207 (1974).
The Court also rejected other potential bases to affirm the
summary judgment. For instance, the
Court refused to credit the plaintiff’s deposition admission that she had been
an exempt employee:
An employee’s subjective belief that her position was exempt
from the FLSA, however, does not mean the position was exempt as a matter of
law. Cf. Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290,
300–01 (1985) (witnesses’ testimony that they were volunteers was not
dispositive of whether they were actually employees under the FLSA). Were it
otherwise, an employer could obtain waivers of FLSA claims merely
by having its employees sign a form stating that they are exempt. FedEx is therefore
not entitled to summary judgment on this ground.
The Court found material factual disputes in the employer’s
remaining arguments about comparative employees and affirmative defenses. Therefore, the case was remanded back to the trial
court.
NOTICE: This summary is
designed merely to inform and alert you of recent legal developments. It does
not constitute legal advice and does not apply to any particular situation because
different facts could lead to different results. Information here can change or
be amended without notice. Readers should not act upon this information without
legal advice. If you have any questions about anything you have read, you
should consult with or retain an employment attorney.
