A Colorado employer’s hope of avoiding an employee’s collective action under the Fair Labor Standards Act (“FLSA”) has gone up in smoke at the United States Supreme Court.
The Justices declined to hear the employer’s argument that it should not have to comply with the federal wage and hour law because it was engaged in Colorado’s legal marijuana industry, which remains illegal under federal law.
The case involves Helix TSC, Inc. (“Helix”), which provides armed security guards, inventory control, and compliance services to the state-sanctioned marijuana industry in Colorado. The named Plaintiff, Robert Kenney, worked as a security guard for Helix, and filed suit claiming that the company misclassified him and other employees as exempt, and failed to pay overtime when they worked more than 40 hours in a work week.
In the trial court, Helix filed a Motion to Dismiss on the basis that the federal District Court lacked jurisdiction. Helix argued that because Kenney was employed in the marijuana industry, which is an industry "entirely forbidden" by the Federal Controlled Substances Act, Kenney was not entitled to the protections of the FLSA, and thus, the Court does not have subject matter jurisdiction over Plaintiff's claim. According to Helix, "[t]he protections of federal law ... are simply unavailable to an individual or business choosing to participate in an industry that is criminalized under federal law."
In the District Court’s Opinion denying Helix’s Motion, the Court held that the law was clear that “that employers are not excused from complying with federal laws, such as the FLSA, just because their business practices may violate federal law” and gave the example of finding FLSA violations where an employer employed illegal immigrants, which also was in violation of federal law. Helix then appealed the ruling to the U.S. Court of Appeals for the 10th Circuit.
The 10th Circuit’s Opinion affirmed the District Court’s decision, and rejected Helix’s “illegality defense”, noting that “just because an Employer is violating one federal law, does not give it license to violate another.”
In its petition to the United States Supreme Court for a writ of certiorari, Helix argued that "the Tenth Circuit's decision confers the same rights on a mule trafficking methamphetamine for a cartel in Oklahoma as it does on a driver ferrying marijuana through the streets of Denver."
However, the Supreme Court was not convinced, and its October 5, 2020 denial of Helix's petition returns the case back to the District Court where Helix will have to defend against Kenney’s claims that he and other similarly situated employees were wrongly treated as exempt under the FLSA and not properly paid overtime.
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