Employers Can Discriminate Against Potential Employees Who Have Sued Previous Employers

Employers stung by a claim or lawsuit by an employee – especially a baseless one by a particularly litigious employee —may want to minimize potential future liability by checking the litigation records of their potential new hires.  But, is this legal?  When it comes to the Fair Labor Standards Act (“FLSA”), which regulates issues such as minimum wage and overtime, the answer is “yes,” according to the United States Court of Appeals for the Fourth Circuit.  The case is Dellinger v. Science Applications. (1:10-cv-00025-JCC-JFA) (08/12/2011).  The Fourth Circuit covers Virginia, Maryland, West Virginia, and North Carolina.

In Dellinger, Science Applications International Corporation (“SAIC”) interviewed and made a job offer to a woman, conditioned on a successful background check and security clearance.  The security clearance required Dellinger to disclose an FLSA lawsuit that she filed against her prior employer, CACI, Inc.  SAIC promptly withdrew the job offer and Dellinger sued SAIC for retaliating against her for having filed the prior FLSA lawsuit.

The Court of Appeals ruled that the FLSA statute defined “employee” in a way that excluded job applicants who had not yet started working for their employer.  The 29 USC § 215 (a) (3) anti-retaliation protection applied only to actual employees, not mere job applicants.

The appellate court was sympathetic to the practical argument that this ruling permits companies to effectively discriminate against prospective employees for having exercised their rights under the FLSA in the past.  However, the court felt that it could not redefine the statutory definition of “employee” in the FLSA.

Employers should note, however, that not all “litigious employees” are the same.  Companies cannot discriminate against all potential employees who have filed employment lawsuits against their previous employers.  The ruling only permits employment discrimination on the basis of prior FLSA lawsuits.  There are many other types of lawsuits that protect potential employees from retaliation.  For example, Title VII, which prohibits discrimination based on race, color, religion, sex, or national origin, bans a prospective employer from refusing to hire an employee because the employee had filed a Title VII complaint in the past against a different employer.  Robinson v. Shell Oil Co., 519 US 337 (1997).  There are other federal laws that have the same retaliation provisions, such as National Labor Relations Act (“NLRA”) and the Occupational Safety and Health Act (“OSHA”).  There are other such laws.  However, according to the Fourth Circuit, in Dellinger v. SAIC, the FLSA is not one of them.