May 21, 2008

Ruling that an employee cannot circumvent the federal Fair Labor Standards Act by pleading causes of action under state common law, the U.S. 4th Circuit Court of Appeals in Richmond rejected an attempt to invoke North Carolina state laws to obtain relief that is only available under the FLSA. Anderson, et al. v. Sara Lee Corp., et al., No. 05-1091 (4th Cir. Nov. 19, 2007). The court, which has appellate jurisdiction over Virginia, Maryland, North Carolina, South Carolina and West Virginia, affirmed a district court's dismissal of several state law claims and remanded the remaining state law claims to the lower court with instructions to dismiss them without prejudice, to give the plaintiffs an opportunity to pursue claims under the FLSA.

The plaintiffs and class members were current and former employees of a Tarboro, North Carolina, bakery. In the state court complaint, the plaintiffs claimed that the employer had violated the applicable wage and hour law by failing to compensate workers for time spent complying with the company's Dress and Undress Rule. The complaint did not plead claims directly under the FLSA, but rather, pled claims under North Carolina law for breach of contract, negligence, fraud, conversion (unlawful taking) and unfair trade practices. The employer removed the case to federal court in the Eastern District of North Carolina.

The plaintiffs' claims focused on the company's Dress and Undress Rule. They claimed that the Dress and Undress Rule required employees to spend time donning and doffing uniforms and/or protective gear, time for which they were not compensated.

The appellate court affirmed the district court's dismissal of the plaintiffs' conversion and unfair trade practices claims. It further determined that the district court should have dismissed the contract, negligence and fraud claims as preempted by the FLSA.

The court noted, first, that the Supreme Court of North Carolina does not recognize causes of action for conversion or unfair trade practices in employer-employee disputes over unpaid wages. Then the court considered the issue of whether the remaining claims for breach of contract, negligence and fraud were preempted by the FLSA.

Based on an analysis of conflict or obstacle preemption (a doctrine requiring state law to yield to federal law where state law may stand as an obstacle to federal legal interests), the court noted that the causes of action were related to the unpaid time spent donning and doffing work garments associated with the plaintiffs' employment. The court determined that the state claims depended on establishing that the employer violated the FLSA and required essentially the same proof as claims asserted under the FLSA. Because of this duplication of proof, the court held that the state law claims were preempted by the federal law. The court noted that Congress prescribed the exclusive remedies under the FLSA. The North Carolina laws invoked by plaintiffs did not entitle them to any substantive right to unpaid wages, but rather, only provided a source of remedies for the alleged underlying FLSA violations. Because the FLSA provides several avenues of remedies, attempting to obtain remedies via state law claims produced an irreconcilable conflict between state and federal law, the court concluded.

It should be noted that the circuit courts are split on the issue of preemption of state law claims by the FLSA.

Jackson Lewis attorneys are available to answer inquiries regarding this case and to assist in achieving compliance with state and federal wage and hour laws and regulations.

For More Information Contact:

Richard S. McAtee
Managing Partner
Raleigh-Durham Office
1400 Crescent Green
Suite 320
Cary, NC 27518
Email: [email protected]
Phone: 919-854-0044
Fax: 919-854-0908

Jacqueline C. Tully
Associate
Washington DC Region Office
8614 Westwood Center Dr
Suite 950
Vienna, VA 22182
Email: [email protected]
Phone: 703-821-4321
Fax: 703-821-2267

© 2007 Jackson Lewis LLP.  Reprinted with permission.  Originally published at www.jacksonlewis.com.  Jackson Lewis LLP is a national workplace law firm with offices nationwide