The Supreme Court has granted review on these issues:

“(1) Whether deference is owed to the Secretary of Labor’s interpretation of the Fair Labor Standards Act’s outside sales exemption and related regulations; and (2) whether the Fair Labor Standards Act’s outside sales exemption applies to pharmaceutical sales representatives.”

The petition for certiorari may be viewed here.

The plaintiff, an employee at Saint-Gobain, complained verbally several times about the placement of the time clock at Saint-Gobain being unlawful.  The time clock was placed beyond the area where workers were required to dress in protective clothing thus they were not paid for the time they donned and doffed their protective work gear.  A lower court ruled in a related case that the placement of the time clock was indeed a violation of the Fair Labor Standards Act.  In this case, the Court considered the use of the phrase “filed any complaint” and whether it allowed for a complaint about a violation to be filed orally or if it strictly limited complaints to be filed in writing.  Justice Breyer thoroughly defined the word “file” and “filed” only to conclude that what really mattered was the spirit of the text.  Breyer found that the intended purpose of the FLSA was to protect employees many of which, at the time the law was written, were illiterate and incapable of filing complaints in writing.  The Court concluded that employees may file complaints orally if the complaint is “sufficiently clear and detailed [enough] for a reasonable employer to understand it.”  The Court, however, did not address an equally important issue about whether a complaint must be filed with a government agency, not simply an employer, to fall within the standards of the FLSA anti-retaliation provision.

This case is a partial win for employees, granting them further protection against employment discrimination under the FLSA.  (More coverage here.)

UPDATE: Jonathan Harkavy’s commentary on this case can be found here from his overview of the Supreme Court’s employment law decisions during their 2010 session.

More from the opinion below:

The primary question presented in this appeal is whether the district court erred in holding that the contents of a particular letter from defense counsel to counsel for the plaintiffs, as clarified by a follow-up letter from defense counsel thirteen days later, rendered moot the plaintiffs’ claims for unpaid overtime wages in a collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, such that a live case or controversy no longer existed with respect to such claims, requiring their dismissal for lack of subject matter jurisdiction. We answer this question in the affirmative, and therefore, vacate the district court’s dismissal of the plaintiffs’ FLSA claims and remand for further proceedings consistent with this opinion.

In sum, the fact that the Defendants’ offer to settle the Plaintiffs’ FLSA claims (as contained in the letter dated May 16, 2008, and as clarified by the follow-up letter thirteen days later) did not offer for judgment to be entered against the Defendants, was ambiguous as to the amounts of actual and liquidated damages to be recovered, and was conditioned upon an agreement by the Plaintiffs to keep the settlement confidential, prevented the mooting of the Plaintiffs’ FLSA claims. Accordingly, we hold the district court erred by dismissing the Plaintiffs’ FLSA claims for lack of subject matter jurisdiction, vacate the district court’s order dismissing such claims and corresponding judgment, and remand such portion of this action for further proceedings consistent with this opinion. We also vacate the district court’s order denying the Plaintiffs’ motion for conditional collective action certification of their FLSA claims and their amended version of such motion, because the district court denied these motions upon its erroneous belief that the Plaintiffs’ FLSA claims had already been rendered moot. On remand, we direct the district court to reconsider these motions in light of our holding that the May 16, 2008 letter, as clarified by the May 29, 2008 letter, did not render the Plaintiffs’ FLSA claims moot.

Continue for details from the opinion:

In their third amended complaint, plaintiffs allege that defendant failed to compensate them for time spent engaged in donning and doffing protective equipment (including, for purposes of this motion, protective clothing) and related activities (collectively “donning and doffing activites”). The specific activities for which they allege they were not compensated include: (1) obtaining their required protective equipment from designated areas in the plant; (2) walking to and from the work station, processing line, or both; (3) donning and doffing protective items and hygiene-related equipment before their shift, during their shift, and after their scheduled shift ends; (4) waiting for a shift to begin or for relief to arrive; (5) washing and cleaning tools and other equipment; and (6) other pre- and post-shift activities required by defendant. Plaintiffs seek unpaid back wages, unpaid benefits, liquidated damages, attorneys’ fees, and other relief.

The FLSA allows for the commencement of an action for unpaid minimum wages and overtime pay against an employer by “any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” … In order to determine if the proposed class is similarly situated at this stage of the proceeding, courts must consider: (1) the factual and employment settings of the individual plaintiffs; (2) whether defendant has presented individualized defenses; and (3) fairness and procedural issues presented.  “Variations in damages . . . do not warrant decertification.”

To be sure, trial of a collective action of this type and magnitude is no small undertaking. But other courts have managed similar litigation involving donning and doffing in the meat and poultry processing industry, and objections on this basis are accordingly unfounded. … For these reasons, a collective action would be a fair and efficient means of resolving plaintiffs’ claims, and this third and final factor therefore favors certification. Because he other two factors do as well, defendant’s motion to decertify the conditionally certified class should be denied.

Reading the FLSA in this way, the Court held that because the servers in this case (who had brought a class and collective action case) were receiving a base pay that was already greater than the minimum wage, the employer was not taking advantage of the “tip credit,” and therefore did not have follow the tip-pooling regulations.  Of course, if the servers’ base pay had been less than minimum wage, the outcome would be entirely different.  (Also note that different analysis may apply under the North Carolina Wage and Hour Act.)

“From the beginning, the named plaintiffs in this case have sought to recover rightly-earned wages and overtime pay not just for themselves, but also for the other Junior Asset Managers who worked for defendants. Congress, recognizing the need for FLSA plaintiffs to be able to combine their individual claims for lost wages into a single action, created the collective action process for that very purpose. Under this process, named plaintiffs must promptly file their FLSA claims, be joined by opt-in plaintiffs, and then seek conditional certification of the collective action so that other potential opt-ins can be notified of the action. That is the only effective means to remedy defendants’ multiple violations of the FLSA.

“Following the established process, the named plaintiffs here filed their complaint with collective action allegations, amended their complaint to include proper defendants, and filed consent notices as opt-in plaintiffs joined the case. Because the district court might have rejected their motion for conditional certification of the collective action without the presence of opt-in plaintiffs, the named plaintiffs waited for several opt-in plaintiffs to join the case before filing their motion. While defendants characterize plaintiffs as inappropriately dilatory, plaintiffs were in fact diligently and prudently pursuing their collective action claims.

“Rather than contest plaintiffs’ collective action claims or motion for certification on the merits, defendants have sought to abort the statutory process. Relying on inapposite cases, mischaracterizing plaintiffs’ motives and actions, and ignoring the realities of collective action litigation, defendants ask the Court to validate their strategy of preempting certification of a FLSA action. The Court
must reject defendants’ tactics and allow FLSA plaintiffs a reasonable opportunity to file a viable motion for collective action  certification.

“With respect to plaintiffs’ NCWHA claims, the Federal Rules of Civil Procedure require only that plaintiffs make allegations that give rise to the reasonable inference that defendants have acted unlawfully, and do not require the exact language on which defendants insist. Here, the complaint alleges that plaintiff Pruitt was routinely required to work overtime hours during her entire employment, that she worked through February 2007, and that she did in fact work overtime hours without receiving overtime pay. The  allegations are sufficient to set forth claims that fall under the NCWHA’s exception to FLSA preemption. Because the pleading stage is not a forum for hyper-technical parsing of language, the district court erred in dismissing plaintiffs’ NCWHA claims.

“Finally, in seeking to abort plaintiffs’ claims, defendants tendered an ambiguous and indefinite offer, and then failed to clarify some of the offer’s patent ambiguities before filing a motion to dismiss. While defendants now characterize their ambiguous offer as a “blank check,” plaintiffs could not reasonably have assumed that defendants’ offer was so generous at the time. The Court cannot give
effect to a plainly inadequate offer based on defendants’ self-serving, post-hoc interpretation.

Here is a summary of our argument to the Court:

“The four named plaintiffs in this case brought suit to vindicate their rights and the rights of their fellow Junior Asset Managers to receive the full amount of compensation and overtime pay to which they are entitled under federal and North Carolina law. To do so, plaintiffs diligently pursued their FLSA claims as a collective action under the FLSA and their NCWHA claims as a Rule 23 class action. These procedural vehicles are designed to make it judicially and economically feasible for many plaintiffs to litigate common claims that otherwise could not practicably be brought as small individual cases. As the Supreme Court and several circuits have recognized, the objective of collective and class actions would be thwarted if defendants are allowed to “pick off” class  representatives by making an offer of judgment to named plaintiffs and mooting the case before plaintiffs can seek certification of the class or collective action. The District Court erred in permitting defendants to use just this tactic, and in finding the case moot based on defendants’ purported offer of judgment.

“Following the other circuits that have addressed this issue, the Court should instead conclude that because plaintiffs promptly and without undue delay moved for conditional certification of their claims under the FLSA, defendants’ settlement offer – even if deemed a proper offer of judgment for full relief – cannot moot this action because plaintiffs’ motion “relates back” to the date plaintiffs’ filed their complaint.

“This principle applies with equal force to plaintiffs’ class action claims under the NCWHA. Plaintiffs were unable to seek certification of the NCWHA class because the District Court erroneously dismissed their NCWHA claims. Even though the court acknowledged that plaintiffs would have stated valid NCWHA claims if they had worked for defendants in 2007 or 2008, the court ignored the allegations of plaintiff Pruitt’s work during this period, and then inexplicably did not allow plaintiffs to amend their complaint with more detailed allegations regarding Pruitt and additional named plaintiffs who worked in the relevant time period. This Court should conclude that plaintiffs have alleged viable claims under the NCWHA, and that they should be allowed a reasonable period to seek certification of the NCWHA Class before the claims can be mooted by defendants’ settlement offer.

“Finally, defendants’ settlement offer did not constitute a proper offer of judgment for full relief because the offer was not for a  definite sum, was ambiguous as to its terms, was not left open for at least ten days, and was not clarified before plaintiffs filed their motion for conditional certification of the collective action. Therefore, the District Court erred in concluding that the settlement offer mooted the case.”

In other FLSA news, the Health Care Reform legislation (technically the Patient Protection and Affordable Care Act) contained a little-noticed provision that requires employers to provide breaks for nursing mothers.  The amendment will require all employers subject to the FLSA to provide rest breaks to mothers who wish to express breast milk.  The new law states that employers with fewer than 50 employees are not required to provide the breaks “if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.”  DOL regulations explicating the provision are sure to follow.