Kendall Hoechst, Amy McLaughlin, Editors
Dinse, Knapp & McAndrew, P.C., Burlington
by Lauren Sampson
Can a state employee use 21 V.S.A. § 384(b)(7) or Article Four of the Vermont Constitution to sue his employer and enforce his minimum wage and hour rights? The Vermont Supreme Court recently affirmed that state employees are not covered by § 384(b)(7), and Article Four does not create property interests in claimed employment rights.
What the law says
In relevant part, § 384(b) states that an employer “shall not pay an employee less than one and one-half times the regular wage rate for any work done by the employee in excess of 40 hours during a workweek.” The subsection “shall not” apply to “state employees who are covered by the federal Fair Labor Standards Act” (FLSA).
The FLSA did not cover most state government employees when it was passed in 1938. However, when the federal law was amended in 1974, its coverage, including the minimum wage and maximum hour provisions, was “extended . . . to virtually all of the remaining State and local government employees who were not [previously] covered.” There are two key exceptions: elected officials and their appointees, and employees of legislative branches.
In Garcia v. San Antonio Metro. Transit Authority, the U.S. Supreme Court affirmed in 1985 that the FLSA generally covers state employees. In Alden v. Maine, however, the Court concluded in 1999 that state employees do not have a private right of action to enforce the FLSA’s provisions because Article I of the U.S. Constitution doesn’t permit individuals to sue nonconsenting states for damages in state courts.
Chapter I, Article Four, of the Vermont Constitution provides:
Every person within this state ought to find a certain remedy, by having recourse to the laws, for all injuries or wrongs which one may receive in person, property, or character; every person ought to obtain right and justice, freely, and without being obliged to purchase it; completely and without any denial; promptly and without delay; conformably to the laws.
The Vermont Supreme Court has ruled that Article Four is “equivalent to the federal Due Process Clause.” The court has also emphasized that Article Four “does not create substantive rights,” but rather is intended to “ensure access to the judicial process.”
Facts and procedural history
An employee worked for the Vermont Department of Labor (VDOL) from 2010 to 2014. After he was terminated, he sued the VDOL, claiming he had worked 704 hours of overtime over the course of his employment but hadn’t been paid time and a half. He brought claims under 21 V.S.A. § 384(b)(7) and the FLSA, but withdrew the FLSA claim when the state filed a motion arguing it was protected against the federal claim by sovereign immunity. The state then filed a motion asking the court to dismiss the state-law claim. The trial court granted the motion, finding that § 384(b)(7) “plainly exempts State employees” and that Article Four does not give state employees a private right of action to seek damages for unpaid overtime. The former employee appealed to the Vermont Supreme Court.
The employee argued that before 1994, when § 384 was amended, state employees were “statutorily excluded” from coverage under Vermont’s minimum wage and overtime law. He suggested that the fact that § 384 was amended in 1994 demonstrated that the legislature “intended for the State to be accountable to its employees for minimum wage and overtime wages.” That intent, according to the employee, was thwarted by the U.S. Supreme Court’s decision in Alden. He further argued that the FLSA is insufficient as a remedy because “for wronged state employees seeking the wages to which they are entitled by state statute, [the] FLSA effectively does not exist.” To that end, he maintained that despite its plain language, § 384( b)(7) provides state employees a private right of action to enforce the minimum wage and overtime law.
Second, the former employee argued that he could enforce his rights against the state through Article Four of the Vermont Constitution because it provides due process relief for plaintiffs with statutory rights, and state employees have a statutory property right to payment under the minimum wage and overtime law. Further, he stressed that he has no private right of action under the FLSA, and the “only other remedy”—that is, the wage complaint process through the U.S. Department of Labor (DOL)—is insufficient and doesn’t meet Article Four standards for due-process protection. In other words, there must be an Article Four right of action because he has a property right under the minimum wage and overtime law, but no adequate means of enforcing it.
Decision of the Vermont Supreme Court
In a unanimous decision, the Vermont Supreme Court rejected the former employee’s arguments for three reasons. First, the court declined to interpret § 384(b)(7) in a way that would contravene its plain language. The court noted that it’s illogical to convert an express exemption of state employees to an implied waiver of sovereign immunity, particularly since waivers of sovereign immunity must be express.
Second, the court disputed the former employee’s interpretation of the legislature’s intent in 1994, concluding that if lawmakers wanted to ensure state employees had a private right of action to enforce minimum wage and hour rights, they could have explicitly included language to that effect in the law. The court also noted that the legislature could have added such language following the U.S. Supreme Court’s decision in Alden or after Vermont federal courts concluded that § 384(b)(7) doesn’t waive the state’s sovereign immunity. Indeed, the U.S. 2nd Circuit Court of Appeals (whose rulings apply to all Vermont employers) has determined that although the exception for state employees “implicitly acknowledges” a legal obligation to follow the FLSA, § 384 “says nothing about how that obligation may be enforced.”
Third, the court concluded that the former employee’s characterization of the FLSA as “insufficient” without a private right of action doesn’t provide a legal basis to supplement § 384. The court observed that supplementing or creating a new remedy for the former employee would “infringe on the lawmaking responsibilities” granted to the Vermont Legislature.
Finally, the court rejected the former employee’s contention that state employees have a statutory property right to compensation under the minimum wage and overtime law. To that end, the court emphasized that Article Four doesn’t “create” property interests in alleged employment rights; instead, it affords an employee a remedy only if he “can show that he has a pre-existing property interest in those employment rights.” Because the court concluded that § 384 provides no such right, the former employee had no recourse under Article Four.
Significance for employers
There are a couple of important takeaways from the Vermont Supreme Court’s opinion in this case:
(1) The court unequivocally held that state employees are generally “covered by” the FLSA and that § 384(b)(7) doesn’t provide employees any minimum wage and hour rights or a statutory private right of action to enforce those rights. The court specifically noted the distinction between being covered by the FLSA and having the right to sue the state as an employer under the FLSA. In other words, although the state has a legal obligation to abide by the FLSA, it’s insulated from being sued for alleged violations under § 384. Instead, an FLSA-protected employee may file a complaint with the DOL, which has the discretion to investigate the complaint and bring an enforcement action against the state. To that end, an employee cannot simply resort to citing coverage by or inclusion in a federal or state statute when challenging an employer; he must also show that the legislature intended to afford him a private right of action.
(2) The court clarified that an employee cannot use Article Four to create a property interest or remedy based on an alleged employment right. There must be a stand-alone statutory or common-law cause of action enabling him to bring a claim.
Lauren Sampson can be reached at email@example.com or 802-864-5751.