Darveau v. Detecon, Inc.

Darveau v. Detecon, Inc.

Opinion

 [*336] 

DIANA GRIBBON MOTZ, Circuit Judge:

After Detecon, Inc., a small wireless telecommunications consulting company, discharged one of its officers, Larry Darveau, he brought this action, alleging that Detecon had not paid him overtime in violation of the Fair Labor Standards Act of 1938 ("FLSA" or the "Act"), 29 U.S.C. § 207 (2000). Fifteen days later, Detecon filed a fraud suit in state court  [**2] against Darveau. Darveau then amended his complaint in this case to allege that Detecon's lawsuit constituted an illegal retaliatory action under 29 U.S.C. § 215(a)(3) (2000) of the FLSA. The district court dismissed Darveau's retaliation claim for failure to state a cause of action, and the court granted summary judgment to Detecon on Darveau's remaining claims. We affirm in part and reverse and remand in part.

Larry Darveau initially worked as an independent contractor for Detecon. On  [*337]  April 1, 2003, Detecon hired Darveau as Director of Sales, North America, with an annual salary of $150,000, a commission on all revenue Darveau generated, and a bonus for meeting specified sales goals. Eight months later, Detecon promoted Darveau to--or, more accurately, "retitled" him as--Vice President of Sales, North America, a position in which he earned essentially the same pay. Throughout this period, Darveau's employment duties appear to have changed little from his work as an independent contractor, except that, when made Vice President of Sales, Darveau became a member of Detecon's Executive Team.

On December 27, 2004, Detecon notified Darveau that it was eliminating his position and terminating  [**3] his employment agreement effective January 31, 2005. A month later, Detecon and Darveau entered into a "Commission Settlement and Release Agreement," which provided that Detecon would pay Darveau $50,000 in return for Darveau's agreement not to sue Detecon regarding "commission claims." The agreement did not, however, specify any release from possible claims under the FLSA, and no party contends on appeal that the agreement bars any of the claims at issue in this case.

On August 1, 2005, Darveau filed a complaint against Detecon in federal district court, seeking, inter alia, compensation for unpaid overtime under the FLSA. Two weeks later, Detecon filed an action in the Circuit Court of Fairfax County, Virginia, against Darveau, alleging fraud and fraudulent concealment arising out of a sales contract whose termination Darveau assertedly hid in order to meet his annual bonus of $50,000. Detecon later amended its complaint in state court to substitute claims for breach of contract and constructive fraud related to these same incidents. In response, Darveau amended his own federal complaint to include both a breach of contract and retaliation claim, contending that Detecon's action constituted  [**4] retaliation under the FLSA in violation of 29 U.S.C. § 215(a)(3). Darveau then removed Detecon's state court action to federal court; that action was consolidated with Darveau's suit and treated as a counterclaim.

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