Employment Law Alert: Informant’s Privilege Upheld In FLSA Suit

In Perez v. USDC (State of Washington Department of Social and Health Servs.) (April 18, 2014), the 9th Circuit panel granted the Secretary of the United States Department of Labor’s (“DOL”) petition for a writ of mandamus, and vacated the district court’s order compelling the Secretary’s response to interrogatories, which would disclose the identities of employees who supported the FLSA claims, in an action against the Washington State Department of Social and Health Services (“DSHS”) alleging violations of the Fair Labor Standards Act (“FLSA”). The writ of mandamus was issued to protect the identities because: 1) the timing of employees’ statements did not affect their status as informants; and 2) knowledge of their identities would not significantly aid DSHS in its defense.

A social worker employed by the DSHS filed a complaint with the DOL alleging that she was not paid overtime despite working 45-65 hours per week. During the initial investigation, 50 other social workers made similar claims. The Secretary of the DOL, Thomas Perez, filed suit against DSHS alleging violations of overtime and recordkeeping provisions of the FLSA. The DOL sent 1,500 employees a questionnaire asking about working conditions and assuring confidentiality. The DOL received 350 responses, 250 of which were employees that wanted to remain anonymous.

In litigation, the DSHS served interrogatories seeking the identities of all individuals. The DOL objected, invoking the government’s informant privilege to protect against disclosing the identities of the individuals that wished to remain anonymous. Still, Perez disclosed all statements of the 50 pre-litigation and the 250 employees who wished to stay anonymous, but redacted their identifying information.

The DSHS filed a motion to compel. In response, the DOL filed a motion for a protective order. The District Court found that the informant privilege protected only the 50 employees who gave their statements before the suit was filed, and ordered responses as to the other 250 employees. The DOL petitioned the 9th Circuit for a writ of mandamus. In concluding that a writ was the appropriate remedy, the court acknowledged that once the informants’ identities were disclosed, they could not be protected again. Moreover, the court recognized that the FLSA relies on information received from employees seeking to vindicate their rights for enforcement purposes. Further, “the timing of the employee’s disclosure is unlikely to temper the reaction of an employer who feels he has been betrayed by his employee,” and the privilege “is a particularly effective means of preventing retaliation.”

The court also determined that the employees’ identities would not significantly aid DSHS. The DOL’s sample would come from the 150 employees who authorized disclosure of their identities. Through their testimony, it could establish that their duties and hours worked were a fair approximation for any other social worker employed by DSHS, and that all affected employees’ work conditions were substantially similar so as to merit class-wide relief. As to the remaining 250 statements, the only information withheld was identifying information. While such information may be relevant, the appeals court was not convinced that its probative value was so great that it was “essential” to DSHS’s defense.

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April 25, 2014