The 3rd U.S. Circuit Court of Appeals has reversed a district court’s ruling against an employee who was not hired for a job because the employer, natural gas company GDS, suspected he might plan to participate in a class-action Fair Labor Standards Act lawsuit against his former alleged joint employers, Cabot Oil and Gas Corp. and Carrie’s Transport and Rental, LLC (Uronis, et al. v. Cabot Oil and Gas Corp., et al, No. 21-1874 (3rd Cir. Sept. 14, 2022)).
The plaintiff applied for a job with GDS, a subsidiary of Cabot, and had not yet informed anyone that he planned to participate in the class-action lawsuit concerning overtime pay, according to court documents. However, he received a text message from a GDS manager explicitly informing him the company could not hire him or other workers due to the lawsuit.
“Unfortunately I found out the day after I talked to you that no one who worked for [... the owner of Carrie’s] is supposed to be on a Cabot location. Pretty much because of the lawsuit that’s going on,” the text message read. “Maybe once the lawsuit deal dies out it might be a possibility again. I wish I could get you in, believe me you’d be better than some of the guys we’ve been interviewing. Also turning a lot down for the same reasons.”
After being turned down, the worker filed a lawsuit against Cabot and GDS, alleging he was discriminated against under the Fair Labor Standards Act. Section 15(a)(3) of the act prohibits employers from discriminating against a worker who “has testified or is about to testify” in an FLSA case.
"The [3rd Circuit] makes some significant interpretive leaps."
Partner, Epstein Becker Green
While the district court argued that being “about to testify” requires being scheduled or subpoenaed to do so, the appeals court disagreed. “We hold Section 15(a)(3)’s ‘about to testify’ language protects employees from discrimination because of an employer’s anticipation that the employee will soon file a consent to join a collective action,” the 3rd Circuit wrote in its analysis, citing two precedential cases.
“This is a really interesting and potentially troubling opinion,” Jeff Ruzal, who specializes in wage and hour disputes at Epstein Becker Green, told HR Dive. While the 3rd Circuit does cite prior cases, the decision is still “one where the circuit court makes some significant interpretive leaps” of Section 15(a)(3), Ruzal said. “It … seems to be a departure from what the statute permits or protects.”
Ruzal noted that the case deals in “a very specific set of facts” that make it unlikely to be a major source of concern for employers. In this case, for example, there is explicit documentation of refusal to hire due to potential participation in the existing lawsuit, and the hiring company is a subsidiary of the company involved in the class-action suit. The joint employer aspect — the plaintiff was hired by Carrie’s, but contends he was jointly employed by Carrie’s and Cabot, which the latter denies — further complicates the case.
But employers should be aware that it’s possible the scenario of hiring putative, or potential, participants in class-action suits involving their company could still come up. “FLSA collective actions are very prevalent,” Ruzal said. He advised employers to be vigilant in their hiring practices. As always when it comes to HR compliance, documentation is key.
On the whole, Ruzal said, the case could “potentially pave the way for other lawsuits that likewise broadly interpret Section 15(a)(3).”