On April 20, 2015, in Greathouse v. JHS Security, Inc. et. al., the US Court of Appeals for the Second Circuit held that an employee's internal, verbal complaint to an employer that he did not receive pay due him can support a retaliation claim under the FLSA. Relying on a 2011 US Supreme Court decision, the Second Circuit overruled its own precedent and vacated the district court's dismissal of the case that had been based on that precedent. (No. 12-4521-cv, (2d Cir. April 20, 2015).)

Darnell Greathouse worked as a security guard for JHS Security, Inc. from September 2006 to October 14, 2011. During his employment, there were numerous instances in which JHS failed to pay Greathouse his full wages, paid him late or made improper deductions to his pay. On October 14, 2011, Greathouse complained to JHS's company president about these pay issues, to which the company president replied, "I'll pay you when I feel like it" and then pulled out a gun and pointed it at Greathouse. Greathouse understood this response as effectively ending his employment. Greathouse filed a lawsuit in US District Court alleging that JHS violated the FLSA and New York Labor Law (NYLL) and that it retaliated against him in violation of the FLSA's anti-retaliation provision (29 U.S.C. § 215(a)(3)). After the clerk entered a default judgment against JHS and the company president, a magistrate judge recommended Greathouse be awarded back wages and liquidated damages, but also concluded that Greathouse's retaliation claim should be dismissed. Noting that Greathouse's pay-related complaint had been directed to the employer, not to a government agency, the magistrate judge relied on the Second Circuit's 1993 decision in Lambert v. Genesee Hospital which held that a retaliation claim under the FLSA must be premised on a complaint that is:

The magistrate judge acknowledged the US Supreme Court's 2011 decision in Kasten v. Saint‐Gobain Performance Plastics Corp., which held that an FLSA retaliation complaint can be premised on either oral or written complaints, provided the complaint is sufficiently clear that a reasonable employer would understand it as an assertion of the employee's FLSA rights (131 S. Ct. 1325 (2011)). However, the magistrate judge pointed out that Kasten did not overrule Lambert's requirement that a complaint must be filed with a government agency in order to serve as a predicate to an FLSA retaliation claim. The district court agreed with the magistrate judge's conclusion and dismissed Greathouse's FLSA retaliation claim. Greathouse appealed.

The Second Circuit vacated the district court's dismissal of Greathouse's FLSA retaliation claim, holding that:

The Second Circuit noted that:

Noting that oral complaints can be ambiguous, and that Kasten requires an objective, reasonable employer analysis to determine whether an oral complaint was sufficiently clear to assert the employee's FLSA rights, the Second Circuit remanded the case for a determination as to whether Greathouse's oral complaint provided a sufficient basis for an FLSA retaliation claim. One judge on the panel agreed with most of the decision, but dissented on a damages issue concerning the employer's interrelationship between the FLSA and the NYLL.

With Greathouse, the Second Circuit recognizes that its Lambert decision was effectively overruled by the Supreme Court's decision in Kasten. The Second Circuit joins the many other circuits that have held that internal, oral complaints can support an FLSA retaliation claim. Employers taking note of this decision should: