Can Employers Outsource Retaliation to Their Lawyers? The Ninth Circuit Says No

Hillary Black

Hillary Black is a student at Harvard Law School and a member of the Labor and Employment Lab.

This January, undocumented dairy worker José Arias secured a million-dollar settlement in a Fair Labor Standards Act retaliation suit against the dairy’s lawyer. The settlement follows a 2017 ruling from the Ninth Circuit that extended the scope of retaliation liability to lawyers who are not “employers.” In an employment landscape where immigration-based retaliation is rampant, Arias’s case illustrates the need for broad retaliation liability under the FLSA.

Arias worked as a milker for Angelo Dairy in northern California. In 2006, he sued the dairy under California law for failure to provide overtime pay and rest and meal breaks. Weeks before trial in 2011, the dairy’s lawyer, Anthony Raimondo, reported Arias to Immigration and Customs Enforcement. Fearing deportation, Arias agreed to settle the lawsuit and released his claims against the dairy.

Like Arias, many undocumented workers cannot vindicate their rights because their employers threaten deportation. While immigration-based retaliation is difficult to quantify, some California numbers from the Trump era are bleak: from 2017 through 2018, workers filed at least 172 immigration-based retaliation claims with the state’s Labor Commissioner’s Office, compared to 29 complaints from 2014 through 2016. With immigration arrests 55% higher in 2018 than they were in 2016, undocumented workers would sooner endure workplace abuses than risk their employers’ tipping off ICE.

In theory, the FLSA’s anti-retaliation provision should deter employers from calling ICE on immigrant workers who assert their rights—but there’s a catch. Because the FLSA regulates “employers,” bosses try to evade retaliation liability by having their lawyers retaliate for them. Raimondo’s practice suggests that this form of retaliation may happen frequently. Arias alleged that on at least five additional occasions, Raimondo reported his clients’ employees to ICE when they tried to assert their rights, and Raimondo confirmed that he had helped orchestrate deportations in the past. In 2013, the California legislature passed a law that subjects lawyers to discipline or even disbarment if they report or threaten to report the immigration statuses of litigants in employment cases. The law’s proponents had argued to the California Senate’s Committee on Labor and Industrial Relations that “unscrupulous attorneys representing…law-breaking employers” were threatening immigrant workers, acknowledging that outsourced retaliation had become a problem.

The Ninth Circuit’s decision in Arias v. Raimondo, 860 F.3d 1185 (2017)—which, by settling this year, Arias and Raimondo have cemented as good law for the time being—should warn lawyers not to retaliate on their clients’ behalves. As a preliminary matter, the decision raises important questions about the attorney-client relationship, which this post will not endeavor to answer. More relevant to undocumented workers is the court’s expansion of retaliation liability, which makes it at least a little bit easier for undocumented workers to assert their rights.

The Ninth Circuit broadly interpreted the FLSA’s complicated language and held that Arias’s retaliation suit against Raimondo could proceed, reversing the district court’s dismissal (Arias’s retaliation claim against the dairy settled). Writing for the court, Judge Trott first distinguished wage-and-hour violations from retaliation, calling them “as different as chalk is from cheese.” Because employers alone control wages and hours, the court reasoned, only actual employers may face liability for wage-and-hour violations. The purpose of anti-retaliation protection, on the other hand, “is to enable workers to avail themselves of their statutory rights in court.” People who are not employers may thwart this purpose, so limiting retaliation liability to actual employers makes little sense.

The court also contrasted the language in the FLSA’s various sections. The wage and hour provisions in §§ 206 and 207 impose obligations on an “employer.” The anti-retaliation provision, § 215(a)(3), speaks more broadly, prohibiting “any person” from retaliating. Seemingly, “any person” who retaliates—“employer” or not—violates the FLSA.

The statute gets tricky in § 216(b), which creates a private right of action against retaliators, and which the court spent little time addressing directly. Unlike in the anti-retaliation provision itself, this subsection provides that “[a]ny employer” who violates the anti-retaliation provision is liable. Reading this provision together with the anti-retaliation provision, the statute seems to say that any person who retaliates has violated the FLSA, but only employers who retaliate may face liability.

The court resolved this discrepancy in Arias’s favor by looking to the definition section, § 203(d). The FLSA defines “employer” as including “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The court concluded that Congress intended to extend retaliation liability beyond actual employers and that Raimondo falls within this definition. Though § 216(b) also creates a private right of action against wage-and-hour violators, the broad reading of “employer” does not apply in that context because, according to the court, “[t]he wage and hour provisions focus on de facto employers.” In light of the “any person” language in § 215(a)(3), as well as the FLSA’s “remedial and humanitarian” purpose, the court refused to interpret retaliation narrowly.

While Arias was a major victory for undocumented workers in the Ninth Circuit, advocates may find it difficult to convince courts nationwide to adopt a similarly expansive reading of the FLSA. In October of 2018, the Sixth Circuit declined to extend FLSA retaliation liability to an employer’s lawyer. Although the retaliation did not involve immigration, the court analyzed the same statutory provisions as in Arias and reached the opposite conclusion. It distinguished Arias as a case of “bad facts make bad law,” rejecting the notion that retaliation liability is broader than wage-and-hour liability. The Sixth Circuit’s opinion was unpublished but suggests that a circuit split may emerge, with two plausible readings of the statute.

Despite the textual complications, courts should adopt the Ninth Circuit’s view. Many courts have held that undocumented workers may sue for wage-and-hour violations under the FLSA. Undocumented workers may also bring wage-and-hour claims under state law, as Arias did. But the availability of wage-and-hour claims to undocumented workers is merely theoretical when the threat of deportation looms over any immigrant who invokes these rights. Whether the worker’s boss contacts ICE directly or does so through a lawyer, immigration retaliation incentivizes undocumented workers to remain silent. When an employer can, in the words of Judge Trott during oral argument, “just get the mafia to threaten people,” the FLSA’s purpose—to prevent employers from underpaying and overworking employees—goes unrealized, and workers suffer. Holding lawyers accountable for retaliation helps enforce wage-and-hour law and protects undocumented workers from abuse.

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