Fourth Circuit Rejects FLSA’s “Manager Rule” in Title VII Cases

Darrell VanDeusen
Darrell VanDeusen
08/12/2015

Neil DeMasters was an employee assistance program (EAP) consultant for the Carilion Clinic’s behavioral health unit. His job was to listen to an employee’s concerns and suggest ways in which the employee might try to resolve them.   After five years in this job, DeMasters was fired in the aftermath of advising (and supporting) an employee who complained about sexual harassment by another employee. DeMasters sued, claiming that he was fired in violation of Title VII’s anti-retaliation provision. The district court dismissed the complaint, holding that DeMasters was in a position in which he could not avail himself to the protections of Title VII’s opposition clause.

Reversing the district court’s dismissal of the claim, the Fourth Circuit held that DeMasters’s claim could proceed to trial. In so doing, the appellate court rejected the Clinic’s effort to use the “manager rule” accepted by some Circuits in FLSA cases, and on which the district court relied. Demasters v. Carilion Clinic, 2015 U.S. App. LEXIS 13962 (4th Cir. Aug. 10, 2015).

According to his complaint, employee “John Doe” was referred to EAP for help. Doe told DeMasters that his (male) manager had been asking him to engage in various sexual activities, “and described how his manager had masturbated in front of him twice on hospital grounds, asked Doe for oral sex, and asked Doe to display his genitals.” DeMasters suggested that Doe was a victim of sexual harassment and formulated a plan with Doe to report the harassment and facilitate the investigation of Doe’s complaint.

Once the allegations were reported, things did not go well for Doe. He returned to tell DeMasters that his co-workers’ behavior toward him was hostile, that he was dissatisfied with management’s reaction to his complaint, and that he feared his harasser would come looking for him with a gun. In response, DeMasters offered his opinion that the Clinic’s management and HR department had been mishandling Doe’s complaints. DeMasters also reached out to the HR manager (repeatedly) to say that he felt that the Clinic was not handling the case properly.

Eventually Doe’s case was settled after the filing of an EEOC charge and a lawsuit. It was during the settlement discussions that DeMasters’s involvement with, and support of, Doe came to light.   Within a few weeks of the Doe settlement, DeMasters was called to a meeting with several Clinic managers and corporate counsel. DeMasters asked if he could have counsel present and was told that if he persisted he would be considered insubordinate and would be terminated.

In this meeting, DeMasters acknowledged sharing his view that Doe was a victim of sexual harassment. The managers asked DeMasters “why he had not taken ‘the pro-employer side’ and if he understood the magnitude of the liability the company could face if one of its supervisors had engaged in harassment.” The managers also told DeMasters that he had not protected the Clinic’s interests and that he had left the Clinic “in a compromised position.” Two days later, DeMasters was fired.

DeMasters sued. The district court dismissed his complaint, applying the FLSA’s “manager rule,” which has been adopted by the First, Fifth and Tenth circuits in the context of Fair Labor Standards Act retaliation claims.   The rule requires that an employee “step outside his or her role of representing the company” to engage in activity protected by the FLSA.

On appeal, the Fourth Circuit joined the Sixth Circuit, holding that the FLSA “manager rule” “has no place” in Title VII, and that the proper test for analyzing oppositional conduct requires consideration of the employee’s conduct as a whole.  Nothing in the text of Title VII, said the court, which covers a broader range of activity than the FLSA, indicates that its provisions rely on an employee’s job description or that “Congress intended to excise a large category of workers from its anti-retaliation protections.”

In so doing, the court looked to the various Supreme Court cases over the past 10 years that have expanded the scope of coverage of Title VII’s retaliation provision. It stressed that DeMasters’s conversations and complaints should have been viewed as a “continuous course of oppositional conduct,” given that nothing in the text, purpose or interpretations of Title VII “supports a myopic analysis under which an employee’s opposition must be evaluated as a series of discrete acts.”

The Fourth Circuit found that DeMasters’s complaint plausibly alleged that he “clearly and effectively” conveyed to Clinic management over several weeks his belief that the Clinic was violating Title VII by subjecting Doe to unlawful conduct” and that a causal link exists between that protected activity and his eventual termination – even though DeMasters was fired two years after the harassment.

What’s the takeaway here?   Employees who work in Human Resources, in an “ombuds” or an EAP position are frequently viewed by other employees as being no more than “management hacks,” not really interested in the truth or a way to help a troubled employee. If DeMasters’s allegations prove true (remember, the court’s decision was based only on his complaint, not fact) it would support such skepticism. And that would be profoundly disappointing. All employees have an obligation to help eradicate discrimination and harassment in the workplace. An employer who fires an employee for attempting to do just that should indeed be called to task.

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