by Matthew H. Parker, Whelan Corrente & Flanders LLP

Judge William Smith of the U.S. District Court for the District of Rhode Island recently entered a decision granting parts, but not all, of an employer’s request for dismissal. The court allowed the former employee’s retaliation charge to survive but dismissed her claims for unpaid wages under the Fair Labor Standards Act (FLSA) and the state’s wage payment statute as well as her defamation claim. The decision provides a reminder that employees must tie their FLSA claims to unpaid minimum wages or overtime, and that private individuals (as opposed to the government) lack standing to sue for alleged violations of the state’s Sunday and holiday pay statute.

Facts

Plaintiff, a nail and wax technician for a national salon chain, was terminated after allegedly walking off the job. She disputed that she had resigned voluntarily and claimed her termination was actually retaliation for taking a medical leave and complaining about wages. She alleged:

  • She had complained about tips going missing from her tip envelope and the company not releasing the tips until she completed certain chores, requiring her to work through breaks; and
  • She wasn’t paid time and one-half for working on Sundays and holidays.

Court’s decision

Unpaid wages under FLSA. The court first tackled Plaintiff’s unpaid wages claim under the FLSA.  Noting the Act requires only the payment of minimum wage and overtime, the court dismissed her claim because she never actually alleged she had worked (1) without pay or (2) more than 40 hours in a week without receiving premium pay.

Although the FLSA does have rules governing when employers can claim tip credits against their employees’ minimum wages, Plaintiff never alleged Defendant salon had claimed such a credit. Nor did she charge that working during breaks caused her to work overtime.

Rhode Island wage claims. Plaintiff’s claims under Rhode Island’s wage payment statute fared no better. Although state law does require certain employers to pay employees one and one-half times their regular rates of pay for work performed on Sundays and holidays, the court noted the Rhode Island Sunday Pay Act doesn’t grant private individuals the right to enforce the statute.

Unless a law specifically allows an individual to enforce it through a lawsuit, enforcement is typically limited to governmental actors. In dismissing Plaintiff’s claims for allegedly unpaid Sunday and holiday premiums, Judge Smith cited two earlier decisions (including one he had authored) holding that only the Rhode Island Department of Labor can sue employers for violating the Sunday pay statute.

Employer retaliation. In light of Plaintiff’s allegations that Defendant had reduced her hours, singled her out for a performance review, and told clients she no longer worked for the company, Judge Smith concluded she had pleaded the minimum elements to let her retaliation claims survive. Generally speaking, at the motion to dismiss stage, the litigant need only allege (and not prove) enough facts to set forth a “plausible” entitlement to relief.

Judge Smith concluded Plaintiff’s allegations—if true—constituted enough of a “materially adverse employment action” to entitle her to explore the claims further in discovery (pretrial fact-finding).

Defamation. Plaintiff’s defamation claim wasn’t so fortunate. She alleged Defendant had defamed her by falsely informing clients she no longer worked for the company, causing her to lose business.

Parsing the required elements of a defamation claim, Judge Smith noted that to be defamatory, a statement must be “false and malicious, imputing conduct which injuriously affects a man’s reputation or which tends to degrade him in society or bring him into public hatred or contempt.” Of particular significance is what the person hearing the allegedly defamatory statement makes of it.

Defendant had allegedly said only that Plaintiff no longer worked at the chain salon, and there was no claim it had told people she was fired. Therefore, the judge found no “underlying implication of a defamatory fact, as the customers could have believed she voluntarily left.” To put it another way, he concluded the employer’s alleged statements weren’t bad enough.

Bottom line

Although Judge Smith did not completely dismiss Plaintiff’s lawsuit, his decision provides a good summary of the pleading requirements for wage, retaliation, and defamation claims. It also illustrates the strategic value of a strong request for dismissal.

While the Plaintiff may still get to test her retaliation claims in discovery, those are individual charges (i.e., inappropriate for class certification), and the documents and testimony potentially related to them are far narrower than if her entire lawsuit had survived. The company will save money during discovery and strengthen its position if and when settlement negotiations occur.

Matthew H. Parker is a partner with Whelan Corrente & Flanders LLP in Providence, Rhode Island, specializing in employment law and business litigation.  You can reach him at 401-270-4500 or mparker@whelancorrente.com.

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