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Labor: Can You “Un-Hire” A Lawsuit?

The 4th Circuit recently ruled that job rescission is legal and not prohibited retaliation under the FLSA.

Your company is hiring a new employee and everything is going according to plan. The company casts a wide net for applicants, receives and reviews many great resumes and selects the best candidates for interviews. One candidate, who held the same job at another company, stands out above the others. So she is offered the job, contingent on her passing the appropriate drug test and background screening that all company employees must pass before starting work. She is excited by the offer and everyone seems happy.

During the screening before she begins with your company, however, the employee reveals that she recently filed a lawsuit against her prior employer under the Fair Labor Standards Act (FLSA) alleging that she was not paid overtime she was due. You know that this type of FLSA claim is among the fastest-growing category of litigation in recent years. Further, the position she is being hired into is one that has been the subject of claims by employees at other companies alleging unpaid overtime or misclassification as being exempt from overtime. You believe the position is properly exempt under the FLSA and not entitled to hourly pay or overtime for working more than 40 hours per week.

The 4th Circuit majority expressed sympathy for the prospective employee’s claim, which was supported by amicus briefs filed by the U.S. Department of Labor and the U.S. Equal Employment Opportunity Commission. The majority recognized the potential problem of allowing employers to weed out and not hire applicants who have filed an FLSA lawsuit in the past. But, the majority held that to rule otherwise would expand the FLSA beyond its “explicit purpose.”

The dissenting judge pointed to the U.S. Supreme Court’s 1997 ruling in Robinson v. Shell Oil Co., which permitted former employees to sue for discrimination under Title VII of the Civil Rights Act even though the language of that statute also provides rights to “employees.”


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Evan Pontz

Evan Pontz is a partner in the Labor & Employment practice of Troutman Sanders. He specializes in employment and labor law matters, including employment discrimination...

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