United States: Texas Court Finds Overtime Restrictions Could Be A Materially Adverse Employment Action In FLSA Retaliation Claim

Last Updated: March 20 2017
Article by Tiffany L. Cox

The Texas Court of Appeals for the Fourteenth District recently reversed and remanded a judgment in favor of an employer on an employee's claim of retaliation under the Fair Labor Standards Act (FLSA). The court found there to be a genuine issue of material fact as to whether a change in the employer's stated overtime policy, which was implemented after the employee filed an overtime lawsuit against the employer and applied only to that specific employee, constituted a materially adverse employment action. Tooker v. Alief Independent School District, No. 14-15-00124-CV (January 4, 2017).

Background

Rosemary Tooker filed suit against Alief Independent School District in January of 2013, alleging violations of the Texas Commission on Human Rights Act, the FLSA, the Family and Medical Leave Act (FMLA), and the Texas Whistleblower Act, among others. The trial court granted Alief's pleas to the jurisdiction and motion for summary judgment, ultimately rendering a take-nothing judgment against Tooker.

Court of Appeals Decision

The Texas Court of Appeals affirmed the lower court's judgment except for the FLSA retaliation claim. As to that claim, the appellate court found there to be a genuine issue of material fact precluding summary judgment and warranting reversal and remand.

The FLSA makes it unlawful for any person to "discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter." To establish a prima facie case of retaliation under the FLSA, a plaintiff must show that: (1) he or she participated in a protected activity under the FLSA; (2) he or she was subjected to an adverse employment action; and (3) the existence of a causal link between the protected activity and the adverse employment action. In this case, the district court found that Tooker failed to establish a prima facie case of retaliation, primarily due to the absence of a materially adverse employment action.

In a 2006 case, the Supreme Court of the United States effectively lessened the burden of proof for retaliation claims by holding that adverse employment actions need not be limited to ultimate employment actions such as demotions and discharges. Rather, a plaintiff can establish a prima facie case of retaliation by showing that he or she was subjected to a lesser employment action that a reasonable employee would have found to be materially adverse, meaning that the action might have dissuaded a reasonable employee from engaging in the protected activity.

The Texas Court of Appeals held that Tooker had presented sufficient evidence to raise a genuine issue of material fact as to whether she had been subjected to an adverse employment action when Alief imposed a more restrictive overtime policy on her. Specifically, less than one month after Tooker sued Alief for, among other things, unpaid overtime compensation, Tooker received a memorandum from her supervisor, Jeff DeLisle, which read as follows:

. . . it has come to my attention that you have alleged that you have not been properly compensated for overtime work. You are hereby directed not to work any overtime unless specifically asked to do so by Wilton Curry [another supervisor] or me.

Failure to follow these directives will be viewed as insubordination and/or misconduct; therefore, resulting in disciplinary action up to and including a recommendation for termination.

Alief's general overtime policy simply required non-exempt employees to obtain supervisory approval before working overtime. In other words, prior to DeLisle's memorandum, Tooker was allowed to work overtime provided a supervisor had approved it. DeLisle's memorandum changed the overtime policy for Tooker only in that she was no longer allowed to work overtime unless the individuals named in the memorandum asked her to do so. Moreover, if she failed to comply with this new policy as stated in the memorandum, Tooker faced a potential recommendation for discharge.

The Texas Court of Appeals concluded that Tooker's evidence raised a genuine issue of material fact as to "whether a reasonable employee, who had worked overtime in the past and been compensated for it, would have found DeLisle's memorandum to be materially adverse conduct due to DeLisle's change in policy, apparently only as to that one employee, from a requirement of prior approval to a requirement that Curry or DeLisle specifically ask the employee to work overtime." While employers are permitted to adopt policies regulating overtime hours, Alief's action of making an existing policy more restrictive for one particular employee might, in the court's opinion, constitute an unlawful retaliatory action.

Key Takeaways

Employers may want to adopt policies requiring non-exempt employees to obtain supervisory approval in advance of working overtime. While employees who violate such policies must be paid for their overtime hours, they may also face disciplinary action to deter future policy violations. As with any policy, enforcement must be consistent, as courts will likely consider evidence of differential treatment in evaluating a retaliation claim involving a claimed adverse employment action falling short of an ultimate employment action. An employer's sudden enforcement of its overtime policy or, as in Tooker, an employer's abrupt modification of its policy may constitute an actionable adverse employment action for purposes of an FLSA retaliation claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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