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The Virginia Overtime Wage Act (“VOWA”) requires employers to pay covered employees overtime compensation. In some ways, the VOWA is similar to the overtime provisions of the federal Fair Labor Standards Act. In other ways, including the calculation of overtime rates for salaried employees, the availability of triple damages, and the time period for which damages can be recovered, VOWA is more powerful and beneficial to employees than the FLSA. For example, if the court finds that an employer knowingly fails to pay overtime wages to an employee in accordance with the VOWA, the court must award the employee triple the amount of overtime wages due and reasonable attorney fees and costs.
Employ DefinedLike the FLSA, the VOWA defines “employ” broadly, as “to permit or suffer to work.” VA Code § 40.1-29.2(A). 
Employee Defined and Misclassification of Salaried EmployeesThe VOWA also defines “employee” broadly, as “any individual employed by an employer[.]” VA Code § 40.1-29.2(A). This definition specifically includes employees of derivative carriers within the meaning of the federal Railway Labor Act, 45 U.S.C. § 151 et seq. Id.
There are a few exceptions, however, to the definition of “employee.” These exceptions cover some, but not all, categories of workers who are exempt from (i.e. not covered by) the overtime provisions of the federal FLSA. For purposes of the VOWA, “employee” does not include:
(i) any individual who volunteers solely for humanitarian, religious, or community service purposes for a public body, church, or nonprofit organization that does not otherwise employ such individual; and
(ii) any person who is exempt from the [FLSA] federal overtime wage pursuant to 29 U.S.C. § 213(a). 
Workers who truly fall into one of these “not an employee” categories are not covered by VOWA, but employers often make mistakes in how they classify employees. The carve-out in § 40.1-29.2(A)(ii) includes the FLSA exemptions commonly referred to as the “white collar” exemptions for workers who meet the criteria for administrative, executive, or professional exemptions. The criteria for these exemptions can be tricky, delving into the application of abstract rules to specific job duties, and employers often wrongly classify workers as meeting these exemptions simply because they are paid a salary. The notion that salaried employees are not entitled to overtime pay, merely because they receive a salary, is incorrect.
Employers who misclassify workers as “exempt” can cost the workers a great deal of income in the form of unpaid overtime compensation. Workers who believe they may be incorrectly classified as “exempt” from the overtime laws because they receive a salary should contact an employment attorney to review their situation. 
(iii) any person who meets the exemptions set forth in 29 U.S.C. § 213(b)(1) or 213(b)(11).
The exemption in § 40.1-29.2(A)(iii) includes the FLSA exemptions for motor carriers (29 U.S.C. § 213(b)(1)) and drivers and driver’s helpers making local deliveries who are paid under plans approved by DOL (29 U.S.C. § 213(b)(11)). Workers who believe they may be misclassified as exempt under any of these exemptions should contact an employment attorney. 
Employer DefinedThe VOWA also defines “employer” broadly, as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” VA Code § 40.1-29.2(A).
There are a few exceptions, however, to the definition of “employer.” Under the VOWA, “employer” does not include:

• any labor organization, other than when acting as an employer; 
• anyone acting in the capacity of officer or agent of such labor organization; or 
• any carrier subject to the federal Railway Labor Act, 45 U.S.C. §§ 151 through 188, except derivative carriers within the meaning of the federal Railway Labor Act.

VA Code § 40.1-29.2(A). Notably, under this definition, employers whose operations do not satisfy the enterprise coverage requirements of the FLSA may still be “employers” subject to the VOWA. Thus, the scope of “employer” covered by the VOWA is broader than that covered by the FLSA. 
Person Defined and Waiver of Sovereign ImmunityRelevant to the definition of “employer,” the VOWA defines “person” as:
an individual, partnership, association, corporation, business trust, legal representative, any organized group of persons, or the Commonwealth, any of its constitutional officers, agencies, institutions, or political subdivisions, or any public body. This definition constitutes a waiver of sovereign immunity by the Commonwealth.
VA Code § 40.1-29.2(A). Two aspects of this definition are especially notable. 

1. It means that the VOWA can apply to individuals, such as business owners, and not just to companies. 

1. It also means that the VOWA applies to the Commonwealth. This definition explicitly constitutes a waiver of sovereign immunity by the Commonwealth, so that state or local government employees who are not paid overtime consistent with the VOWA’s requirements may bring suit to recover their damages. 

Wages Defined and Impact on Overtime RatesThe definition of “wages” is important to the calculation of an employee’s overtime pay rate. The VOWA defines “wages” the same as that term is defined in the Virginia Minimum Wage Act, VA Code § 40.1-28.9. The VMWA defines “wages” broadly, as
legal tender of the United States or checks or drafts on banks negotiable into cash on demand or upon acceptance at full value. “Wages” includes the reasonable cost to the employer of furnishing meals and lodging to an employee if such board or lodging is customarily furnished by the employer and used by the employee.
VA Code § 40.1-29.2(A);  VA Code § 40.1-28.9(A). Wages may include tips. VA Code § 40.1-28.9(B). 
In short, the VOWA’s broad definition of wages means that nearly all forms of compensation, from salaries, bonuses, and commissions, to lodging and tips, must be included in calculating an employee’s regular and overtime rates of pay. The VOWA excludes from the calculation of regular and overtime rates the same forms of compensation that are excluded from the regular rate by the federal FLSA, 29 U.S.C. § 201 et seq., and its implementing regulations. VA Code § 40.1-29.2(B).
Workweek DefinedThe VOWA defines “workweek” as “a fixed and regularly occurring period of 168 hours or seven consecutive 24-hour periods.” VA Code § 40.1-29.2(A). A workweek does not have to coincide with the calendar week and may begin on any day and at any hour. The VOWA provides that the beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of this section. Id.
Overtime Compensation Requirement The VOWA’s substantive overtime provision parallels that of the FLSA:
For any hours worked by an employee in excess of 40 hours in any one workweek, an employer shall pay such employee an overtime premium at a rate not less than one and one-half times the employee’s regular rate, pursuant to 29 U.S.C. § 207. 
VA Code § 40.1-29.2(B).
Importantly, however, the VOWA differs from the FLSA in its requirements for calculation of the regular rate of certain employees, and thus, the employees’ overtime pay rate.
Calculation of Regular Rate and Prohibition of Fluctuating Workweek MethodThe VOWA provides that an employee’s regular rate shall be calculated as follows:
1. For employees paid on an hourly basis, the regular rate is the hourly rate of pay plus any other non-overtime wages paid or allocated for that workweek, excluding any amounts that are excluded from the regular rate by the federal Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and its implementing regulations, divided by the total number of hours worked in that workweek.
2. For employees paid on a salary or other regular basis, the regular rate is one-fortieth of all wages paid for that workweek.
VA Code § 40.1-29.2(B). These VOWA requirements prohibit employers from calculating a salaried employee’s overtime pay rate using the “fluctuating workweek” method. The fluctuating workweek method, also called “Chinese overtime” or “diminishing half-time,” involves dividing all compensation for the week by the total hours worked to get a regular rate, then paying the employee half of that regular rate for each hour of overtime. This method, which is permissible for salaried employees under the FLSA, results in salaried employees being paid less overtime compensation per hour the more hours they work. This method is outlawed by the VOWA, because the VOWA requires employers to calculate regular rates using a 40-hour workweek and to pay overtime equal to 1.5 times the regular rate. Thus, under the VOWA, the overtime rate for salaried employees does not diminish as more hours are worked. 
Virginia’s Gap Pay Act for Fire Protection and Law Enforcement EmployeesThe VOWA references the FLSA’s special work period rules for fire protection and law enforcement employees, located at 29 U.S.C. § 207(k). In general, those rules allow fire departments or police departments to establish a work period ranging from 7 to 28 days in which overtime need be paid only after a specified number of hours in each work period. See this prior post for a detailed explanation of those rules. Paying overtime based on these work periods can create a “gap” of uncompensated working time between the hours covered by the employee’s salary, and the hours the employee has to work to receive overtime compensation under § 207(k) of the FLSA. 
For this reason, the VOWA also references Virginia’s Gap Pay Act, VA Code § 9.1-701. That state law provides, generally, that certain fire protection and law enforcement employees must be paid overtime compensation for the “gap,” that is, “for all hours of work between the statutory maximum permitted under 29 U.S.C. § 207(k) and the hours for which an employee receives his salary, or if paid on an hourly basis, the hours for which the employee receives hourly compensation.” VA Code § 9.1-701(A). 
The VOWA provides:
For fire protection or law-enforcement employees of any public sector employer for whom 29 U.S.C. § 207(k) applies, such employer shall pay an overtime premium as set forth in this section for (i) all hours worked in excess of the threshold set forth in 2[9] U.S.C. § 207(k) and (ii) any additional hours such employee worked or received as paid leave as set forth in subsection A of [VA Code] § 9.1-701.
VA Code § 40.1-29.2(C). Thus, the VOWA requires that fire protection and law-enforcement employees receive overtime compensation for both:
(i) all hours worked in excess of the threshold set forth in 29 U.S.C. § 207(k), and
(ii) any additional hours the employee worked or received as paid leave as set forth in subsection A of Virginia’s Gap Pay Act, VA Code § 9.1-701(A).
VA Code § 40.1-29.2(C). 
The VOWA further provides that compliance with 207(k) and the Gap Pay Act is compliance with VOWA’s overtime requirements. It states:
No agency, institution, political subdivision, or public body that complies with the requirements of 29 U.S.C. § 207(k) and § 9.1-701 shall be deemed to have violated subsection B [of VOWA] with respect to fire suppression or law-enforcement employees covered by such statutes.
VA Code § 40.1-29.2(E).
Exemptions and Affirmative DefensesThe VOWA allows employers to assert some, but not all, of the exemptions available under the federal FLSA. 
An employer may assert an exemption to the overtime requirement of this section for employees who meet the exemptions set forth in 29 U.S.C. § 213(a)(1) or for employees who meet the exemptions set forth in 29 U.S.C. §§ 213(b)(1) or 213(b)(11).
VA Code § 40.1-29.2(D). As discussed above, 29 U.S.C. § 213(a) includes the FLSA exemptions commonly referred to as the “white collar exemptions” for workers who meet the criteria for administrative, executive, or professional exemptions. The criteria for these exemptions are complicated, delving into the application of abstract rules to specific job duties, and employers frequently mistakenly classify workers as meeting these exemptions simply because they are paid a salary. The notion that salaried employees are not entitled to overtime pay, merely because they receive a salary, is incorrect. 
The exemption in 29 U.S.C. § 213(b)(1) applies to motor carriers regulated by the Secretary of Transportation. The exemption in (29 U.S.C. § 213(b)(11) covers drivers and driver’s helpers making local deliveries who are paid under plans approved by DOL.
Employers who misclassify workers as “exempt” can cost the workers a great deal of income in the form of unpaid overtime compensation. Workers who believe they may be misclassified as exempt under any of these exemptions should contact an employment attorney. 
Remedies for Employees, Private Cause of Action, and Hybrid CasesImportantly, the VOWA incorporates the remedies provisions of the Virginia Wage Payment Act, VA Code § 40.1-29(J). The VOWA provides:
Any employer that violates the overtime wage requirements of this section shall be liable to the employee for all remedies, damages, or other relief available in an action brought under subsection J of § 40.1-29.
VA Code § 40.1-29.2(F). Thus, the VOWA authorizes employees to file suit in court against an employer who fails to pay overtime wages, and to recover the same categories of remedies, damages, and other relief available for violations of the VWPA.
Like the VWPA, the VOWA authorizes both individual and group lawsuits. If an employer fails to pay overtime wages in accordance with the VOWA, the employee may bring an action, individually, jointly with other employers, or on behalf of similarly situated employees as a collective action consistent with the collective action procedures of the Fair Labor Standards Act, 29 U.S.C. § 216(b), to recover payment of the wages. 
An employee who has experienced violations of both the FLSA and the VOWA may bring a hybrid collective action and class action in federal court. So long as the requirements of Rule 23 of the Federal Rules of Civil Procedure are met, in addition to the collective FLSA claims, an employee may be able to assert a class action in federal court covering the state law VOWA claims. Class actions have some advantages over collective actions, such as tolling of the limitations period for putative class members during the pendency of the action. See, e.g., Am. Pipe & Const. Co. v. Utah, 414 U.S. 538, 554 (1974).
If the employee or employees prevails on the VOWA claims, the court must award:

• The wages owed;
• An additional amount as liquidated damages; 
• Prejudgment interest at an annual rate of eight percent from the date the wages were due; and 
• Reasonable attorney fees and costs. 

Triple damages are also possible. If the court finds that the employer “knowingly” failed to pay wages to an employee in accordance with the VOWA, the court must award the employee an amount equal to triple the amount of wages due and reasonable attorney fees and costs. VA Code § 40.1-29(J)&(G); VA Code § 40.1-29.2(F).
“Knowingly” DefinedFor purposes of the triple damages provision, the VWPA and the VOWA provide that a person acts “knowingly” with respect to information if the person: 
(i) Has actual knowledge of the information;
(ii) Acts in deliberate ignorance of the truth or falsity of the information, or 
(iii) Acts in reckless disregard of the truth or falsity of the information. 
Notably, establishing that a person acted “knowingly” does not require proof of specific intent to defraud. VA Code §§ 40.1-29(J) & (K); VA Code § 40.1-29.2(F).
Statute of LimitationsThe VOWA provides that an action for overtime violations must be commenced within three years after the cause of action accrued. VA Code § 40.1-29.2(G). 
This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to [email protected].

In Groff v. DeJoy, 600 U.S. 447, 143 S.Ct. 2279 (2023), the Supreme Court held that for an employer to deny a religious accommodation for an employee as an undue hardship under Title VII, the employer must show that granting an accommodation would result in substantial increased costs for its particular business. The case is important because it moved away from prior cases allowing employers to deny accommodations that imposed more than a “de minimus” or minimal cost on the employer, thereby strengthening the rights of employees to religious accommodations. 
Statutory and Regulatory BackgroundTitle VII of the Civil Rights Act of 1964 made it unlawful for covered employers “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges [of] employment, because of such individual’s … religion.” 42 U.S.C. § 2000e–2(a)(1).
In 1972, following EEOC regulatory guidance on religious discrimination, Congress amended Title VII to clarify that employers must “reasonably accommodate… an employee’s or prospective employee’s religious observance or practice” unless the employer is “unable” to do so “without undue hardship on the conduct of the employer’s business.” 42 U.S.C. § 2000e(j).
In Groff, the Supreme Court addressed the meaning of “undue hardship” under this section. 
FactsGroff was an Evangelical Christian. For religious reasons, he believed that Sunday should be devoted to worship and rest. Groff had a mail delivery job with the United States Postal Service. For many years, Groff’s position generally did not involve Sunday work. That changed after USPS agreed to handle Sunday deliveries for Amazon. To avoid the new requirement to work some Sundays, Groff transferred to a rural USPS station that did not make Sunday deliveries. 600 U.S. 447, 454-55.
After the rural station began doing Sunday deliveries as well, Groff remained unwilling to work Sundays, resulting in USPS redistributing his Sunday deliveries to other USPS staff. Groff received “progressive discipline” for failing to work on Sundays. He eventually resigned. 600 U.S. at 454-55.
Groff filed suit under Title VII, asserting that USPS could have accommodated his Sunday Sabbath practice “without undue hardship on the conduct of [USPS’s] business.” 600 U.S. 447, 456 (quoting 42 U.S.C. § 2000e(j)). The Third Circuit affirmed summary judgment for USPS, citing the Supreme Court’s decision in Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977). 600 U.S. at 456. The Third Circuit interpreted Hardison to mean “that requiring an employer ‘to bear more than a de minimis cost’ to provide a religious accommodation is an undue hardship.” 600 U.S. at 456 (quoting 35 F.4th 162, 174, n. 18 (quoting 432 U.S. at 84)). The Third Circuit found the de minimis cost standard met in Groff’s case, concluding that exempting him from Sunday work had “imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale.” 600 U.S. at 456 (quoting 35 F.4th at 175).
The Court’s Decision: In Religious Accommodation Cases, Undue Hardship Entails Substantial Increased Costs in Relation to the Conduct of the Employer’s Business. The Groff Court reversed. It held that Title VII requires an employer that denies a religious accommodation to an employee as an undue hardship show that granting an accommodation would result in substantial increased costs in relation to the conduct of the employer’s particular business. 600 U.S. at 456-73.
The Court held that showing “more than a de minimis cost,” as that phrase is commonly used, does not suffice for an employer to show an “undue hardship” under Title VII’s religious accommodation provisions. 600 U.S. at 468. Rather, the Court interpreted Hardison to mean that an “undue hardship” is shown “when a burden is substantial in the overall context of an employer’s business. Id. This is a fact-specific inquiry. Id.
To apply this “substantial burden” test, the Court indicated that courts should take into account all the relevant factors in the case at hand, including “the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.” 600 U.S. at 470-71 (cleaned up, internal quotes and cite omitted).
The Court further addressed the language in 42 U.S.C. § 2000e(j) requiring that the undue hardship be “on the conduct of the employer’s business.” Id. The Court emphasized that Title VII requires an assessment of a possible accommodation’s effect on “the conduct of the employer’s business.” 600 U.S. at 472. Thus, the impacts of an accommodation on co-workers are relevant only to the extent they “affec[t] the conduct of the business.” 600 U.S. at 472 (citation omitted).
Similarly, the Court further observed that “a hardship that is attributable to employee animosity to a particular religion, to religion in general, or to the very notion of accommodating religious practice cannot be considered ‘undue.’” 600 U.S. at 472. Similarly, “bias or hostility to a religious practice or a religious accommodation” cannot provide a defense to a religious accommodation claim. Id. 
Turning to the situation in Groff’s case, the Court observed that “Title VII requires that an employer reasonably accommodate an employee’s practice of religion, not merely that it assess the reasonableness of a particular possible accommodation or accommodations.” 600 U.S. at 473. Thus, when an employer is “[f]aced with an accommodation request like Groff’s, it would not be enough for an employer to conclude that forcing other employees to work overtime would constitute an undue hardship.” Id. Rather, “[c]onsideration of other options, such as voluntary shift swapping, would also be necessary.” Id.
AnalysisIn sum, Groff held that for an employer to deny a religious accommodation for an employee as an undue hardship, the employer must show that granting an accommodation would result in substantial increased costs for its particular business. The case is important because it moved away from prior cases allowing employers to deny accommodations that imposed more than a “de minimus” or minimal cost on the employer, thereby strengthening the rights of employees to religious accommodations. 
This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to [email protected].

In Darveau v. Detecon, Inc., 515 F.3d 334 (4th Cir. 2008), the Fourth Circuit held that an employee could be protected by the anti-retaliation provision of the Fair Labor Standards Act when a former employer responded to the employee’s overtime lawsuit by filing a counterclaim against the employee without a reasonable basis in fact or law. The case is important because, inter alia, it shows that (1) an employee does not have to currently employed to be protected by the FLSA’s anti-retaliation provision, and (2) an unreasonable counterclaim can constitute an actionable adverse action within the meaning of the FLSA’s anti-retaliation provision.
Statutory BackgroundThe FLSA requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. 29 U.S.C §§ 206-207. The FLSA also imposes recordkeeping requirements on employers. 29 U.S.C. § 211. The FLSA allows employees to file suit for violations of their rights under the FLSA. 29 U.S.C. § 216(b).
The FLSA also contains a provision that protects employees from retaliation for asserting their rights under the FLSA. That provision states that it is unlawful for “any person” to:
(3) to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee[.]
29 U.S.C. § 215(a)(3). 
In Darveau, the Fourth Circuit addressed whether this provision applies to retaliatory actions after the employment relationship ends, and whether it prohibits a former employer from filing counterclaims without reasonable basis in law or fact in response to a suit by the employee’s asserted FLSA claims.
FactsDetecon was a small wireless telecommunications consulting company. Darveau worked for Detecon as a Director of Sales, and was paid a salary and commissions. After Detecon terminated him, Darveau filed suit against Detecon in federal court, alleging claims of unpaid overtime in violation of the FLSA. Fifteen days later, Detecon sued Darveau in state court, alleging claims against him relating to a sales contract.  515 F.3d 334, 336-37.
In response, Darveau amended his federal complaint to assert that the company’s claims against him violated the FLSA’s anti-retaliation provision, alleging that the claims had no reasonable basis in law or fact. Detecon’s claims were later removed to federal court, consolidated with the FLSA case, and treated as counterclaims. Id.
The district court granted a motion by Detecon’s to dismiss Darveau’s retaliation claim. The court granted summary judgment to Detecon on Darveau’s overtime and breach of contract claims, and to Darveau on Detecon’s counterclaims for constructive fraud and breach of contract claims. 515 F.3d 334, 337.
Darveau appealed on the overtime issue and the retaliation issue. The Fourth Circuit upheld the grant of summary judgment on the overtime claim, but reversed the dismissal of the retaliation claim. Id. This post focuses on the discussion of the retaliation claim. 
The Court’s Decision: Adverse Action Under the FLSA’s Anti-Retaliation ProvisionThe Fourth Circuit determined that the company’s allegedly unreasonable counterclaim against a former employee could constitute an “adverse action” within the meaning of the FLSA’s anti-retaliation provision. 
The Court observed that a plaintiff asserting a prima facie claim of retaliation under the FLSA must show:
(1) he engaged in an activity protected by the FLSA;
(2) he suffered adverse action by the employer subsequent to or contemporaneous with such protected activity; and
(3) a causal connection exists between the employee’s activity and the employer’s adverse action. 
515 F.3d 334, 340 (citations omitted).
Detecon primarily argued that Darveau failed to state a retaliation claim because its counterclaims were not “adverse actions” within the meaning of the FLSA. 
The Fourth Circuit rejected this argument, however, and agreed instead with Darveau, noting that “the Supreme Court has expressly held that a lawsuit filed by an employer against an employee can constitute an act of unlawful retaliation under another federal statute governing employment rights when the lawsuit is filed with a retaliatory motive and lacking a reasonable basis in fact or law.” 515 F.3d 334, 341 (citing Bill Johnson’s Rests. v. NLRB, 461 U.S. 731, 744 (1983)). 
The Fourth Circuit then turned to the district court’s rationale, in dismissing the claim, that Darveau had to demonstrate that he suffered a “materially adverse employment action involving an ultimate employment decision related to hiring, leave, discharge, promotion, or compensation.” Id. 
Therefore, the district court reasoned, because Darveau had left Detecon’s employment six months prior to filing his FLSA suit, “he could not possibly have suffered any employment action, adverse or otherwise, from Detecon.” Id. The Fourth Circuit noted that requiring a FLSA retaliation plaintiff to allege and prove a “materially adverse employment action” would have the “practical effect of declaring that the FLSA’s prohibition applies to retaliation exclusively against current, and not former, employees.” Id.
The Fourth Circuit then noted that this rationale rested on outdated precedent, as the Supreme Court had “explicitly held that for purposes of Title VII’s retaliation provision, “employee” encompasses former, as well as current, employees. 515 F.3d 334, 341 (citing  Robinson v. Shell Oil Co., 519 U.S. 337, 345–46 (1997)). 
Further, the Fourth Circuit noted that the Supreme Court had rejected Detecon’s proposed narrow view of “adverse action” within the meaning of Title VII’s anti-retaliation provision. For example, in Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, (2006), the Court held that a Title VII retaliation plaintiff need not allege or prove an ultimate adverse employment action, because “[t]he scope of the anti-retaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm.” 515 F.3d 334, 342 (quoting 548 U.S. at 67). The Burlington Court ruled that Title VII’s retaliation provision requires a plaintiff simply to allege and prove “that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” 515 F.3d 334, 342 (quoting 548 U.S. at 68).  
Applying these same principles to the FLSA’s anti-retaliation provision, the Fourth Circuit determined that a company’s counterclaim against an FLSA plaintiff and former employee, made with a retaliatory motive and without a reasonable basis in law or fact, could constitute an “adverse action” within the meaning of the FLSA:
[W]e hold that the district court clearly erred in requiring Darveau to allege that his employer retaliated against him with a “materially adverse employment action.” Rather, a plaintiff asserting a retaliation claim under the FLSA need only allege that his employer retaliated against him by engaging in an action “that would have been materially adverse to a reasonable employee” because the “employer’s actions … could well dissuade a reasonable worker from making or supporting a charge of discrimination.” [citing Burlington, 548 U.S. at 68].  Darveau has alleged such an action here, i.e., that his employer filed a lawsuit against him alleging fraud with a retaliatory motive and without a reasonable basis in fact or law. 
515 F.3d 334, 343.
AnalysisIn sum, Darveau held that an employee could be protected by the FLSA’s anti-retaliation provision when a former employer responded to the employee’s overtime lawsuit by filing a counterclaim against the employee with a retaliatory movie and without a reasonable basis in fact or law. The case is important because, inter alia, it shows that (1) an employee does not have to be a current employee of the company to be protected from the company’s retaliatory actions by the FLSA’s anti-retaliation provision, and (2) an unreasonable counterclaim can constitute an actionable adverse action within the meaning of the FLSA’s anti-retaliation provision.
This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to [email protected].

Effective July 1, 2024, the Department of Labor’s new independent contractor rules provide guidelines for distinguishing between employees and non-employee independent contractors, for purposes of the overtime and minimum wage requirements of the Fair Labor Standards Act. As explained below, the DOL rules closely parallel the test that the Fourth Circuit has historically applied in FLSA cases. 
Statutory and Regulatory BackgroundThe FLSA requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. 29 U.S.C §§ 206-207. The FLSA also imposes recordkeeping requirements on employers. 29 U.S.C. § 211. These requirements raise questions about what it means to be an “employer” or an “employee,” and, more specifically, about the nature of the employment relationship that falls within the scope of the FLSA’s minimum wage and overtime requirements. 
The FLSA itself defines these terms broadly, but without great clarity. Section 203 of the FLSA defines “employer” to include “any person acting directly or indirectly in the interest of an employer in relation to an employee[.]” 29 U.S.C. § 203(d). The FLSA defines the term “employee” to generally mean “any individual employed by an employer.” 29 U.S.C. § 203(e). And it defines “employ” as “includes to suffer or permit to work.”  29 U.S.C. § 203(g). 
In FLSA cases, disputes often arise as to whether a worker is an “employee,” entitled to minimum wages and overtime under the FLSA, or a non-employee “independent contractor” to which the FLSA does not apply. Sometimes, workers are misclassified as independent contractors, when under the FLSA they are really employees. 
The Fourth Circuit’s Employee / Independent Contractor TestThe Fourth Circuit has historically assessed whether a worker is an employee or a non-employee independent contractor using a six-factor “economic realities” test. The factors are:
(1) the degree of control that the putative employer has over the manner in which the work is performed; 
(2) the worker’s opportunities for profit or loss dependent on his managerial skill; 
(3) the worker’s investment in equipment or material, or his employment of other workers; 
(4) the degree of skill required for the work; 
(5) the permanence of the working relationship; and 
(6) the degree to which the services rendered are an integral part of the putative employer’s business.
Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298 (4th Cir. 2006). “These factors are often called the ‘Silk factors.’ No single factor is dispositive; the test is designed to capture the economic realities of the relationship between the worker and the putative employer.” Id. (Derived from United States v. Silk, 331 U.S. 704, 67 S. Ct. 1463 (1947)).
The 2024 DOL Employee / Independent Contractor TestThe DOL’s 2024 employee / independent contractor regulations adopt a totality of the circumstances, economic realities test that is consistent with the historical Fourth Circuit test:
Of particular note, the regulations set forth in this final rule do not use “core factors” and instead return to a totality-of-the-circumstances analysis of the economic reality test in which the factors do not have a predetermined weight and are considered in view of the economic reality of the whole activity.
Employee or Independent Contractor Classification Under the FLSA, 89 Fed. Reg. 1638 (Jan. 10, 2024) (Amending 29 C.F.R. § 795).
The 2024 DOL factors closely parallel the Silk factors discussed above and historically applied by the Fourth Circuit. Shortened, they are:
(1) Opportunity for profit or loss depending on managerial skill, 
(2) Investments by the worker and the potential employer,
(3) Degree of permanence of the work relationship,
(4) Nature and degree of control,
(5) Extent to which the work performed is an integral part of the potential employer’s business, and 
(6) Skill and initiative. 
29 C.F.R. 795.110. “Additional factors may be relevant in determining whether the worker is an employee or independent contractor for purposes of the FLSA, if the factors in some way indicate whether the worker is in business for themself, as opposed to being economically dependent on the potential employer for work.” Id. Thus, like the Fourth Circuit, the DOL embraces an economic realities test that balances the relevant factors. 
And like the Fourth Circuit explained in Schultz, the ultimate inquiry in using the factors is still “whether the [workers] were, as a matter of economic reality, dependent on the business they served, or, conversely, whether they were in business for themselves.” Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298 (4th Cir. 2006). See also Employee or Independent Contractor Classification Under the FLSA, 89 Fed. Reg. 1638 (Jan. 10, 2024) (Amending 29 C.F.R. § 795) (“The ultimate inquiry is whether, as a matter of economic reality, the worker is economically dependent on the employer for work (and is thus an employee) or is in business for themself (and is thus an independent contractor).”)
Thus, the DOL’s 2024 FLSA independent contractor test is similar to the economic realities test historically applied in the Fourth Circuit. Both tests consider the same basic factors in their totality.
Special thanks to Hannah Wyatt for her work on this post!
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