Refusal to work more than five hours of unpaid overtime was protected under FLSA

By Joy Waltemath

By Brandi O. Brown, J.D.

Halting the demise of a Kansas Bureau of Investigation employee’s FLSA lawsuit, the Kansas Supreme Court ruled that the employee’s refusal to work more than five hours of unpaid overtime would have been understood by a reasonable employer as an assertion of a protected right under the FLSA. Contrary to a state court of appeals’ conclusion, the Kansas high court ruled that the employee’s statement was not too equivocal, even though he had agreed to work some hours unpaid, when considered in light of the culture of expected unpaid overtime in which he worked. Judge Stegall dissented and Judge Biles filed a separate concurrence (Lumry v. State of Kansas, December 16, 2016, per curiam).

Protested, fired, sues. In October 2007, tired of working 10 to 20 overtime hours per week without compensation, a frustrated special agent of the Kansas Bureau of Investigation informed his supervisor that he would no longer underreport his hours. He told the supervisor, “I’ll work an extra 5 hours a week and give you that extra time; but I’m not going to work 10 and 20 hours a week anymore, or more, of unclaimed overtime.’ A few months later the supervisor purportedly found irregularities his timesheets, which ultimately resulted in the employee’s discharge. Thereafter, the employee filed suit in federal district court against the State and the KBI, among others. The federal court dismissed, basing its holding on the Eleventh Amendment.

State suit. Subsequently, the employee filed a separate lawsuit in state court, naming the KBI and three individual defendants in their individual capacities. In that lawsuit he alleged retaliatory discharge under the FLSA, retaliatory discharge under the First Amendment, and, after amendment, retaliatory discharge in violation of the state wage and hour law. The trial court granted defendants summary judgment, holding among other things that sovereign immunity barred the FLSA claim against the KBI and that two of the three defendants were not an “employer” for FLSA purposes. With regard to the third defendant, the Director of the KBI, the court agreed that he was an employer but rejected the employee’s claim against him because it believed his refusal to work more than five hours of uncompensated overtime would not have put a reasonable employer on notice that the employee was asserting protected rights under the FLSA.

The employee appealed some of the rulings, but the individual defendant did not cross-appeal the ruling that he was an “employer.” The court of appeals affirmed, although with partly different reasoning. The panel members, however, split on the question of whether the employee’s protest was a protected statement, with the majority concluding that it did not meet the standard. It also divided on other aspects of the employee’s claims. Both sides sought review. The Kansas Supreme Court reversed the panel majority, vacated the trial court’s judgment on the issues subject to its review, and remanded.

The first, and easiest, question for the court was the one posed by the KBI Director in his appeal, i.e., whether he was an “employer” under the FLSA. The court explained that the trial court’s ruling (that he was) could not be disturbed because the defendants failed to cross-appeal as required by K.S.A. 2015 Supp. 60-2103(h). That failure, the court explained, created a jurisdictional bar preventing review.

Protest put employer on notice. From there, the high court concluded that a reasonable employer would have understood the employee’s flat refusal to work more than five hours of overtime per week as an assertion of a protected right under the FLSA, regardless of the fact that it included acquiescence to working some amount of unpaid overtime. The high court agreed with the reasoning offered by the dissenting judge of the court of appeals, who argued that the complaint made by the employee was “precisely the type of right protected by the FLSA.”

Examining the content of the employee’s statement in light of the context in which it was made, the high court concluded that a reasonable employer would have understood it as an assertion of a protected FLSA right. The employee testified that he regularly accrued overtime hours for which he was not paid, a practice he alleged was expected by the employer. Thus, it was unsurprising that in his assertion of rights he still agreed to work a certain number of unpaid overtime hours—the employer’s “culture demanded it.” In fact, it was clearly taken that way by his supervisor, who flippantly dismissed his complaint by saying, “50 hours a week still isn’t shit.” A reasonable employer, the court concluded, would have understood his refusal to work more than five hours of overtime as an assertion of a protected FLSA right, the court concluded, holding that the trial court and appeals court majority erred in ruling as a matter of law that his refusal was not a protected activity.

Common law claim. The court also concluded that Kansas law recognizes retaliatory discharge as a common-law tort when an employee is fired for invoking rights under either the FLSA or its Kansas law equivalent, the KMWMHL. The latter, the court explained, “clearly manifests” the state’s public policy supporting workers’ rights to seek redress for wage and hour violations and to oppose retaliation for exercise of those rights. That policy is important, the court explained, because of the public policy exception to the state’s at-will employment doctrine. The question then becomes whether a substitute remedy—under a state or federal statute—would preclude the claim and, related to that, which party bears the burden of showing that an adequate alternative remedy exists. Before those questions can be reached, however, the court explained that the district court had to rule whether sovereign immunity prevented the employee from suing the KBI under the FLSA. All of those questions, the court concluded, were “best left to the district court on remand.”

Dissent, concurrence. Judge Stegall dissented, arguing that the claim against the KBI Director was in actuality a claim against the State and, thus, should be barred by the state’s sovereign immunity. Judge Biles, agreeing with the majority’s outcome and its rationale, wrote separately in response to the dissent, arguing that Judge Stegall offered up an Eleventh Amendment immunity test that had never been used previously in the state’s jurisprudence and that was not even argued by the parties.

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