7th Circuit: State immune from FLSA suit

April 6, 2016

The 7th Circuit affirmed that Indiana was immune from a Federal Labor Standards Act lawsuit brought by two Department of Child Services Employees. The court said the state did not give consent for the suit, and thus had 11th Amendment immunity under the U.S. Constitution.

Arlene Nunez and Veronica Martinez worked for the DCS’ Gary office. They sued for violations of the overtime provisions of the FLSA and alleged DCS required them to work during lunch and remain on call after their shifts, despite being paid only 40 hours per week. They were seeking injunctive and declaratory relief, damages and attorney fees.

The 11th Amendment protects states from these suits, but the U.S. Supreme Court said there could be exceptions to the rule if states give consent. Judge Jon E. DeGuilio for the Northern District Court at Hammond ruled Indiana had not given consent, and the 7th Circuit upheld that decision.

Nunez and Martinez said Indiana waved its immunity and gave consent to suit in federal court. They argued the consent was given in Indiana Code 34-13-1-1 under the statute of limitations for contract claims against the state. However, the court said that code was not specific enough to grant the waiver.

Nunez and Martinez also claim since the Tort Claims Act is not a waiver of the 11th Amendment, the fact the state did not withhold consent explicitly for contract claims means there should be federal jurisdiction. However, the 7th Circuit said this logic does not hold up. “Under plaintiff’s logic, one express disclaimer of waiver for one category of cases would be transformed by canons of statutory interpretation into a sweeping implied waiver of immunity for every other category of cases,” Judge David Hamilton wrote.

Finally Nunez and Martinez said since Indiana allows suits to be brought against the state for contracts, an employment relationship is a contract, and the FLSA’s requirements are embedded in all employment relationships, and thus in contracts. Because of that, Indiana consented to federal FLSA suits. However, Hamilton said the state statute refers only to state law, and the fact that a state incorporates federal FLSA standards into state contracts does not transform it to federal law.

The case is Arlene Nunez and Veronica L. Martinez v. Indiana Department of Child Services, 15-2800.


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