Company could reject applicant who sued her previous employer

A company offered a woman a job pending a background check. But when the check revealed that she had filed a lawsuit against her previous employer for violating the federal minimum wage and overtime rules, the company withdrew the offer.

The woman then sued the new company as well.

The Fair Labor Standards Act is the federal law that governs minimum wages and overtime. The law protects workers from retaliation when they accuse their employers of wage-and-hour violations. So the woman claimed that the new company was illegally retaliating against her for pursuing her rights under the law against her old company.

But there was just one problem, according to a federal appeals court in Virginia that heard the case.

The law says that a company cannot retaliate against an “employee” for filing a complaint about wages and hours. But the woman was not yet an “employee” of the new company, because the company had made her employment contingent on the results of the background check.

Because the woman wasn’t yet an “employee,” the new company could retaliate against her, the court said.

The court described this result as “problematic,” because the law was meant to protect employees who complain, yet the decision meant that these employees would not be protected if they sought another job. Nevertheless, the court said the law was written the way it was written, and it had to be enforced.