Can An Employee Sue For Reduced Overtime?

Key do’s and don’ts

A supervisor in your company just told one of his direct reports that she can no longer work voluntary overtime. She’s always put in 4 hours of work before the start of her scheduled shift. As most of you know, the Fair Labor Standards Act (FLSA) requires that when an employee works more than 40 hours in a given week, s/he is to receive 1.5 times his/her regular hourly rate for all time exceeding that 40-hour threshold.
 

You can guess that a significant portion of this employee’s income therefore came from voluntary overtime. Now you learn that this employee has sued your company. “Now, wait just one minute”,

 

 

I can hear some of you saying. “An employee is not entitled to overtime hours. If an employee works extra hours I have to pay overtime, but I know I’m allowed to forbid an employee from doing so, because you’ve told me I am.” That’s true.
 
I know the suspense is killing you, so, here’s the answer: If you take away the overtime after the employee has complained of harassment or discrimination or has reported activity s/he in good faith believes is illegal or unethical, or has assisted someone else with such a complaint, report or investigation, it may be retaliation and that is illegal under many laws. Some states have specific whistleblower protection laws. Even when no such law exists however, retaliation, as you know is illegal under Title VII and similar anti-discrimination laws. Just to show you how it can actually work in real life, here’s a real case where that did happen.
 
The case is Tamika Ray v International Paper Company No. 17-2241 (4th Circuit, November 28, 2018). Here is the bare-bones version of the facts: Ray complained that her supervisor sexually harassed her for several years. (Assuming her allegations are true, they do outline blatant sexual harassment). She reported the behavior to two higher-up supervisors. She didn’t want them to act on her complaint, but company policy requires supervisors to report such complaints to HR Neither of the supervisors did so.
 
Ray’s supervisor eventually found out that she complained of his behavior and forbade her from continuing to work voluntary overtime. Ray regularly worked for 4 hours prior to the start of her shift each day, resulting in significant additional income for her. Other employees with the same job title were still permitted to work voluntary overtime. Only Ray was forbidden from doing so. (While Ray did at times, work mandatory overtime to cover when other employees did not show up for their shifts. Taking away the voluntary overtime significantly reduced her income).
 
Ray sued IPC for the supervisor’s harassment and for retaliation. The reduction in overtime was relevant to both claims. How so? The U.S. Supreme Court in Vance v. Ball State University 571 U.S. 421, 424 (2013) held  that an employer is strictly liable for a supervisor’s harassment or discrimination when the supervisor’s harassment “culminates in a tangible employment action”. Is the reduction of overtime a “tangible employment action”? The District Court said, “No” and granted summary judgment to IPC, but the 4th Circuit reversed on appeal.
 
Here’s why: The court cited prior cases where it recognized that a reduction in hours, if it decreases an employee’s take-home pay, could be a tangible employment action and that a reasonable jury could determine that Ray suffered a tangible employment action. The court further reasoned that, “A reasonable jury could determine that … [the supervisor’s] ongoing harassment of Ray and his direct involvement in the decision to deny her voluntary overtime work were sufficiently linked.”
 
What about the retaliation claim? The court’s reasoning was similar here, though it did note that the standard of proof is a bit less stringent. A retaliation claim requires proof that: 
 

1. The plaintiff was engaged in protected activity,
2. She suffered an adverse employment action, and
3. There was a causal connection between the protected activity and the adverse action. 

 
There was no dispute that Ray met the first element. The 4th Circuit held that there was a sufficient dispute of material fact as to whether the loss of voluntary overtime was sufficiently severe to be an adverse employment action. 
 
Was there a causal connection? The supervisor forbade the voluntary overtime shortly after he learned of Ray’s complaint. The 4th Circuit therefore held: “Based on the record before us, a jury reasonably could determine that …[the supervisor] retaliated against Ray after learning that she had complained about him to other IPC supervisors.” The case is, therefore, still alive and will proceed to trial if the parties do not settle.
 
So, what should an employer do? Well, I have a few do’s and don’ts for you:
 

 
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
 
This article originally appeared here.