– Judge Robert Rolfe, Winterbottom v. Wright, 1842.” For the want of a nail … the Kingdom was lost”.
– Unknown.About a year earlier, the United States Court of Appeals for the Fourth Circuit held in Cruz v. Maypa, 773 F. 3d 138 (4th Cir. 2014), a choice that has received little interest, that an employer covered by the Fair Labor Standards Act of 1938 (” FLSA”) who cannot maintain a published notice describing to covered workers their statutory right to minimum earnings and premium overtime pay might, as a result, surrender the right to assert an affirmative defense based upon the FLSA’s statute of constraints (or “SOL”).
The realities of Cruz are admittedly remarkable, however the holding invites an argument that a company whose just transgression is the failure to post or preserve the needed notice has actually lost the right to the defense that an FLSA claim, despite when the claim is submitted, is unfortunate and for that reason disallowed by law. That an SOL can be “tolled” based on equitable principles is barely news. Many litigators, however, might be shocked to learn that a defense as elementary (and occasionally crucial) as one based on an SOL can be lost by something as simple as the employer’s failure to post or preserve a statutorily-required notification of employee rights.
The FLSA needs nearly all companies to provide minimum per hour salaries and premium overtime pay to “nonexempt” staff members. 29 U.S.C. 206 and 207. The FLSA policies also require covered companies to “publish and keep posted a notice explaining the [FLSA] as recommended by the Wage and Hour Division [of the United States Department of Labor], in noticeable locations in every establishment where such staff members are employed so regarding permit them to observe easily a copy.” 29 C. F. R. 516.4 (2015).
FLSA enforces specific time limits by which aggrieved employees should submit match. These limits have been in location for so many years that attorneys who deal with FLSA claims, even knowledgeable legal representatives, rarely think about that complainants who bring such claims might be able to circumvent an applicable SOL and recuperate earnings that were due more, perhaps a lot more, than 3 years back.
Well, based upon Cruz, they might.
The Facts in Cruz.
The plaintiff, Cristina Cruz (a native of the Philippines), took legal action against Nilda Maypa and others, claiming that Maypa had actually required Cruz to work in the United States for wages less than those recommended by the FLSA from 2002 up until 2008. Prior to Cruz signed the agreement, Maypa told Cruz that she would pay her only $250 per month rather than the promised hourly wage. Cruz did not know that the FLSA requires a much greater minimum hourly wage.
According to the viewpoint, Cruz was required to work 7 days a week for 17 to 18 hours per day, and she was expected to remain on call at night. Cruz was never permitted to take a day off in the six years she stayed under Maypa’s control, even when ill.
As if that were not enough:
Cruz was reliant on them to help her call home to the Philippines and they would not pay for Cruz’s calls. When Cruz was able to call her household, the defendants monitored her conversations. The defendants likewise restricted Cruz from leaving their home alone other than to walk their aggressive pet dog.
In late 2007, Cruz’s worry of being caught with the defendants for the rest of her life started to exceed her worry of the repercussions of leaving. She called a pal living in the United States, who offered her the contact info for somebody who could assist her escape. On January 17, 2008, Cruz gathered all the papers she might find related to her work and migration status, lacked the home, and entered a waiting van.
Cruz (understandably) sued Maypa and others, however did refrain from doing so till more than five years after her escape. The accused (not remarkably) transferred to dismiss the case pursuant to Rule 12( b)( 6) of the Federal Rules of Civil Procedure on the basis that all of Cruz’s claims were timed-barred. The district court granted the defendants’ motion.
The Equitable Tolling Argument.
Cruz appealed and said that her FLSA claim should be equitably tolled under the real notice guideline stated in Vance v. Whirlpool Corp ., 716 F. 2d 1010 (4th Cir. 1983). The district court had actually rejected Cruz’s equitable tolling argument in the context of granting a motion to dismiss, so the Fourth Circuit evaluated the district court’s decisions de novo.
Cruz’s argument based upon Vance found a more receptive audience in the Fourth Circuit. The Fourth Circuit had formerly discovered in Vance that the district court had actually correctly held that the 180-day filing requirement of the Age Discrimination in Employment Act (” ADEA”) — where filing a charge of discrimination with the EEOC is a prerequisite to filing match– was told by reason of the complainant’s company’s failure to post statutory notification of workers’ rights under the ADEA.
The Fourth Circuit, doubtlessly moved by Cruz’s alleged “virtual jail time,” concluded that” [i] t makes great sense to extend our reasoning in Vance to the FLSA,” because:
Vance tolled an administrative filing due date rather than a statute of limitations, the FLSA lacks an equivalent management filing requirement; therefore, the FLSA’s due date to sue is, like the ADEA’s administrative filing deadline, the crucial juncture at which a complainant’s rights are maintained or lost. Neither the ADEA nor the FLSA inflicts statutory charges for failure to comply with the notification requirements. For all of these reasons, this Court’s analysis in Vance applies with equivalent force to the notice requirement of the FLSA.
773 F. 3d at 146-147 (internal quotation marks and citations left out, focus provided).
The Vance Analysis.
Exactly what is the Vance analysis? According to the Fourth Circuit, fair tolling, which is admittedly “a rare solution available just where the complainant has actually ‘exercised due diligence in maintaining her legal rights,'” is available just when “(1) the plaintiffs were prevented from asserting their claims by some kind of wrongful conduct on the part of the offender or (2) extraordinary circumstances beyond complainants’ control made it impossible to submit the claims on time.” Id. at 145-146. The court noted that Cruz’s “virtual jail time prevented her from looking for legal remedy,” which sounds as though the court had determined amazing scenarios beyond her control that made it impossible for her to submit her claims on time. You may find affordable trademark attorney here.
The Cruz court chose that such a reward is past due and that it needs to fill in the space. The Fourth Circuit therefore held that the tolling rule it had actually used to an ADEA claim in Vance uses simply as well to an FLSA claim of the kind made in Cruz.
The Fourth Circuit did not specifically state whether the company’s failure to adhere to the notification requirements of the FLSA totaled up to “wrongful conduct” on the part of the company, hence satisfying the very first trigger of the Vance test or “amazing scenarios beyond a plaintiff’s control,” therefore pleasing the second trigger of the Vance test. No matter which argument brings the most weight, the opinion plainly holds that an employer’s failure to post the required FLSA notice, standing alone, may require application of the extraordinary doctrine of equitable tolling, which might gut an otherwise readily available (and often dispositive) affirmative defense. See, e.g., Mata vs. G.O. Contractors Group, Ltd., 2015 WL 6674650, * _____ n. 1 (D. Md. 2015) (pointing out Cruz for the proposition that “the statute of constraints might be equitably tolled in cases in which an offender fails to post indications recommending staff members of their wage rights”).
Ramifications of Cruz.
Yes, but that may offer companies little convenience. If a complainant never ever retains counsel, or if the date of engagement is uncertain, then the employer will have to prove when the worker gotten actual knowledge of the staff member’s rights, which might be a considerable obstacle and might require a trial. The Cruz court showed that the factual record it was evaluating was restricted to the modified grievance, and it failed to determine when Cruz first kept a legal representative or found out of her rights under the FLSA.
Fourth Circuit remanded the case to the district court to enable discovery to figure out whether Cruz’s FLSA claim was time-barred despite being equitably tolled.
What does Cruz mean for lawyers handling FLSA claims and their customers in the Fourth Circuit? Attorneys representing companies in FLSA cases will definitely argue that Cruz needs to be limited to cases including realities as extraordinary as those present in that case, but the decision suggests a minimum of the following:
Complainants bringing FLSA claims for overdue salaries that were due more than three years before fit was filed may be able to get rid of the SOL by depending on equitable tolling if they can reveal that the company took part in “wrongful conduct” through nothing more than the failure to post or keep published the notice of worker rights needed by the FLSA.
An employer whose reliance upon an SOL has actually been brought into question based upon its failure to publish or preserve the needed notification might be required to show when the plaintiff maintained counsel or (more difficult) when the complainant gotten “real knowledge” of the plaintiff’s FLSA rights, which may in some cases scuttle any hope of getting termination of untimely claims on summary judgment, therefore increasing the potential settlement value of the case; and,
Companies had much better “post and keep published” the needed FLSA notification, or run the risk of the assertion of claims for unsettled incomes and equal liquidated damages, going back for many years, and lawyer’s charges.
The realities of Cruz appear to have made it an especially difficult case in which to reject relief to the plaintiff. In the words of Judge Rolfe, this might have resulted in “bad law” for all companies and their counsel in FLSA “failure to publish” cases.