FLSA's Statute of Limitations Equitably Tolled Because of Employer's Failure to Post Statutorily-required Notice: Fourth Circuit | Practical Law

FLSA's Statute of Limitations Equitably Tolled Because of Employer's Failure to Post Statutorily-required Notice: Fourth Circuit | Practical Law

This wage and hour update discusses Cruz v. Maypa, in which the US Court of Appeals for the Fourth Circuit addressed the equitable tolling doctrine as it applies to claims under the Fair Labor Standards Act (FLSA). The court extended the reasoning of Vance v. Whirlpool Corp., which involved equitably tolling the 180-day filing requirement under the Age Discrimination in Employment Act (ADEA), to plaintiff's FLSA claim.

FLSA's Statute of Limitations Equitably Tolled Because of Employer's Failure to Post Statutorily-required Notice: Fourth Circuit

by Practical Law Labor & Employment
Published on 03 Dec 2014 • USA (National/Federal)
This wage and hour update discusses Cruz v. Maypa, in which the US Court of Appeals for the Fourth Circuit addressed the equitable tolling doctrine as it applies to claims under the Fair Labor Standards Act (FLSA). The court extended the reasoning of Vance v. Whirlpool Corp., which involved equitably tolling the 180-day filing requirement under the Age Discrimination in Employment Act (ADEA), to plaintiff's FLSA claim.
On December 1, 2014, in Cruz v. Maypa, the US Court of Appeals for the Fourth Circuit reversed the district court's dismissal of the plaintiff's FLSA claim and remanded for discovery to determine whether the plaintiff's FLSA claim was timely under the equitable tolling doctrine. The court extended its reasoning of Vance v. Whirlpool Corp., which involved equitably tolling the ADEA's 180-day EEOC filing requirement, to the plaintiff's FLSA claim. (No. 13-2363, (4th Cir. Dec. 1, 2014).)

Background

Cristina Fernandez Cruz was employed as a maid by the defendants who from 2002 to 2008 kept her a virtual prisoner in their home, paid her well below the minimum wage, and denied her basic medical and dental care. Cruz spoke little English and did not know that US law required a minimum wage. Defendant Maypa did not dispute that she was an employer under the FLSA.
On July 16, 2013, Cruz filed a lawsuit against the defendants in the US District Court for the Eastern District of Virginia seeking compensatory and punitive damages for the defendants' violations of various state and federal laws, including the FLSA. Cruz alleged that the defendants willfully violated the FLSA by failing to pay her the required minimum wage.
Ruling on the defendants' motion to dismiss, the district court dismissed all of Cruz's claims as time-barred.
Cruz appealed to the US Court of Appeals for the Fourth Circuit and argued, among other things, that her FLSA claim should be equitably tolled under the actual notice rule articulated in Vance v. Whirlpool Corp., a case in which the Fourth Circuit tolled the 180-day filing requirement under the ADEA due to the employer's failure to post notice of workers' rights as required under the Act. (716 F.2d 1010 (4th Cir. 1983).)

Outcome

The Fourth Circuit:
  • Applied its analysis in Vance to the FLSA's notice requirement.
  • Reversed the dismissal of Cruz's FLSA claim and remanded to the district court to allow discovery to determine when Cruz learned of her FLSA rights.
In reaching its decision, the Fourth Circuit concluded that:
  • The district court correctly applied the three year statute of limitations for willful violations under the FLSA.
  • The ADEA and FLSA have nearly identical language requiring employers to post notices about employees' rights under each Act.
  • Employers do not face a statutory penalty for failing to comply with the ADEA and the FLSA notice requirements and therefore employees are vulnerable to an employer who might hide violations from employees until the statute of limitations expires.
  • While Vance tolled an administrative filing deadline rather than a statute of limitations, the FLSA deadline to sue is, like the ADEA's administrative filing deadline, the point at which a claimant's rights are preserved or lost.

Practical Implications

The FLSA does not provide a private right of action for its statutory posting requirements, but the purpose of these requirements is to ensure that employees are aware of and able to assert their rights. A tolling rule removes the incentive for employers to hide violations from employees until their claims expire. Although this case arose amid allegations of human trafficking, all employers who are subject to the FLSA’s posting requirements should ensure that their employees understand their rights under the FLSA.