Paulette Wedding v. Madisonville Health & Rehab.

JANE B. STRANCH, Circuit Judge. This is the second lawsuit that Paulette Wedding has filed against her former employer Madisonville Health and Rehabilitation, LLC (Madisonville Health), asserting violations of the Fair Labor Standards Act (FLSA) and the Kentucky Wages and Hours Act (KWHA). In the first suit (Wedding I), Wedding alleged collective and class action FLSA and KWHA claims based on Madisonville Health’s alleged failure to include her sign-on bonus compensation in calculating her overtime pay. Madisonville Health responded by filing counterclaims against Wedding for breach of contract and unjust enrichment, alleging that Wedding had agreed to repay her sign-on bonus and failed to do so. While the first action was pending, Wedding filed this action (Wedding II), asserting that Madisonville Health filed its counterclaims to retaliate against her in violation of the FLSA’s and the KWHA’s antiretaliation provisions.

The district court granted Madisonville Health’s motion to dismiss Wedding’s retaliation claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state claims on which relief can be granted and denied as futile her motion for leave to amend her complaint under Rule 15(a)(2). Wedding appeals. For the reasons that follow, we AFFIRM.

BACKGROUND¹1. Courts presented with a Rule 12(b)(6) motion to dismiss “may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). Because Wedding’s amended complaint in this action incorporates by reference her original complaint and its exhibits, including copies of her Wedding I complaint and Madisonville Health’s Wedding I counterclaims, we may consider those record documents in reviewing Madisonville Health’s motion to dismiss.

I.

It is undisputed that Wedding began working at a Kentucky nursing home on February 14, 2023, and that she was eligible to earn a sign-on bonus if she remained employed long enough. But the parties’ pleadings tell different stories about the terms of Wedding’s sign-on bonus and the length of her employment.

Wedding alleges that Madisonville Health promised to pay her a $7,000.00 sign-on bonus in stages if she worked at the nursing home for a full year. She alleges, and Madisonville Health does not dispute, that Madisonville Health promised to pay her half the bonus ($3,500.00) after 90 days of employment, another quarter ($1,750.00) after six months, and the remaining quarter ($1,750.00) after one year. Wedding states that although many other employees signed written agreements to repay similar sign-on bonuses if they did not remain employed for one year, she never signed such an agreement. Madisonville Health placed Wedding on suspension on February 11, 2024, for allegedly being rude to a coworker. Three days later, on February 14, Madisonville Health’s Director of Nursing Carla Benson called Wedding and told her that her employment was being terminated.

In April 2024, Wedding filed a collective and class action complaint against Madisonville Health, Clearview Healthcare Management Ky LLC (Clearview), Simcha Hyman, and Naftali Zanziper (collectively, the Wedding I Defendants), alleging that these Defendants failed to include employees’ sign-on bonus compensation in their overtime pay rate calculations in violation of the FLSA, 29 U.S.C. §§ 201–219, and the KWHA, Ky. Rev. Stat. Ann. §§ 337.275–337.410.

The Wedding I Defendants answered Wedding’s complaint, and Madisonville Health also filed counterclaims against Wedding for breach of contract and unjust enrichment. Madisonville Health’s counterclaims allege that, “[u]pon being hired, Wedding entered into an agreement for a Sign on Bonus (‘the Agreement’) with Madisonville Health worth a total of $7,000.00.” R. 1-8, Am. Answer & Countercls., PageID 91, ¶ 6. Madisonville Health alleges that the Agreement provided, “Employee must remain employed for one year at the facility. Failure to do so will result in the employee being required to reimburse the total amount of sign on bonus.” Id., ¶ 8. It alleges that Madisonville Health terminated Wedding’s employment on February 12, 2024, two days before her one-year employment anniversary, at which time the employer had paid her three- quarters of the sign-on bonus ($5,250.00), but Wedding did not repay the bonus.

Wedding moved to dismiss Madisonville Health’s counterclaims under Federal Rule of Civil Procedure 12(b)(6), arguing that the counterclaims were barred by judicial estoppel and, alternatively, failed on the merits because the Agreement was ambiguous about how long she had to work to receive the bonus and because Madisonville Health admitted that it did not notify Wedding that her employment was terminated until one full year after her first day of work. The district court denied Wedding’s motion to dismiss the counterclaims. Wedding’s collective and class action claims and Madisonville Health’s counterclaims in Wedding I remain pending.

Wedding filed this suit on September 16, 2024, and filed her amended complaint (Complaint) as a matter of course under Federal Rule of Civil Procedure 15(a)(1) on October 4, 2024. The Complaint names Madisonville Health, Clearview, Hyman, Zanziper, and an unknown individual as defendants (collectively, the Wedding II Defendants). It alleges that Hyman, Zanziper, Clearview, and an unknown individual caused and directed Madisonville Health to file the counterclaims in retaliation for the filing of Wedding I and in violation of the FLSA and KWHA’s antiretaliation provisions. Wedding asserts that the counterclaims are based on “an alleged written agreement” between her and Madisonville Health, R. 8, PageID 136, ¶ 22, even though the Wedding II Defendants knew before filing the counterclaims that she never signed a written agreement to repay the sign-on bonus, id., PageID 138, ¶¶ 36, 37. She also alleges that, even though other former employees have signed written repayment agreements, accepted bonus pay, worked for less than one year, and never repaid the bonus, the Wedding II Defendants never filed repayment claims against other former employees.

The Wedding II Defendants moved to dismiss Wedding’s Complaint under Rule 12(b)(6), arguing that her retaliation claims fail on the merits. Specifically, Madisonville Health argued that its First Amendment right of access to the courts precludes Wedding from holding it liable for filing the counterclaims in Wedding I because Wedding has not plausibly alleged that the counterclaims lack a reasonable basis in fact or law and are motivated by an unlawful purpose. Wedding filed a response in opposition to the motion to dismiss, a motion for leave to amend her Complaint under Rule 15(a)(2), and a proposed amended complaint. The Wedding II Defendants responded that granting Wedding leave to amend would be futile because her proposed amended complaint would be subject to dismissal under Rule 12(b)(6) for the same reasons argued in their motion to dismiss.

The district court granted the Wedding II Defendants’ motion to dismiss and denied as futile Wedding’s motion for leave to amend. Wedding timely appeals.

II. STANDARD OF REVIEW

“We review a district court’s grant of a [Rule 12(b)(6)] motion to dismiss de novo.” Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012). Although we generally review the denial of a Rule 15(a)(2) motion for leave to amend under the abuse of discretion standard, we review denials based on futility de novo. Orton v. Johnny’s Lunch Franchise, LLC, 668 F.3d 843, 850 (6th Cir. 2012) (citing Inge v. Rock Fin. Corp., 281 F.3d 613, 625 (6th Cir. 2002)).

III. ANALYSIS

A. Rules 12(b)(6) and 15(a)(2)

In determining whether a complaint fails to state a claim for relief under Rule 12(b)(6), courts must “construe the complaint in the light most favorable to the plaintiff, accept all well- pleaded factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff.” Courtright v. City of Battle Creek, 839 F.3d 513, 518 (6th Cir. 2016). We do not accept as true “conclusory legal allegations that do not include specific facts necessary to establish the cause of action.” Linden v. City of Southfield, 75 F.4th 597, 601–02 (6th Cir. 2023) (quoting Bickerstaff v. Lucarelli, 830 F.3d 388, 396 (6th Cir. 2016)). Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). But the complaint’s factual allegations must be sufficient to notify the defendant of the plaintiff’s alleged claims, “and the plaintiff must plead ‘sufficient factual matter’ to render the legal claim plausible, i.e., more than merely possible.” Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“Factual allegations must be enough to raise a right to relief above the speculative level[.]”). “To establish the ‘facial plausibility’ required to ‘unlock the doors of discovery,’ the plaintiff must plead ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Wilburn v. United States, 616 F. App’x 848, 852 (6th Cir. 2015) (quoting Iqbal, 556 U.S. at 678–79).

Rule 15(a)(2) provides that courts should “freely” grant a motion for leave to amend a pleading “when justice so requires.” Fed. R. Civ. P. 15(a)(2). This mandate flows from the principle that courts ought to afford plaintiffs an opportunity to test their claims on the merits where “the underlying facts or circumstances relied upon . . . may be a proper subject of relief . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962). Leave to amend may nonetheless be denied if there is “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.” Brown v. Chapman, 814 F.3d 436, 443 (6th Cir. 2016) (quoting Foman, 371 U.S. at 182). A proposed amendment is futile when it would not survive a motion to dismiss under Rule 12(b)(6). Miller v. Calhoun Cnty., 408 F.3d 803, 817 (6th Cir. 2005).

B. The FLSA and the KWHA

The FLSA “sets forth employment rules concerning minimum wages, maximum hours, and overtime pay” and “contains an antiretaliation provision that forbids employers ‘to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to the Act.’” Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 4 (2011) (citation modified) (quoting 29 U.S.C. § 215(a)(3)).

The KWHA is “Kentucky’s analogue to the Fair Labor Standards Act[.]” City of Louisville Div. of Fire v. Fire Serv. Managers Ass’n ex rel. Kaelin, 212 S.W.3d 89, 92 (Ky. 2006). Like the FLSA, it sets forth rules for employers regarding employees’ wages, hours, and overtime pay. See, e.g., Ky. Rev. Stat. Ann. § 337.275 (minimum wages); id. § 337.285 (hours and overtime). It also provides for the assessment of civil penalties against “[a]ny employer who discharges or in any other manner discriminates against any employee . . . because the employee has caused to be instituted . . . any proceeding under or related to [the Act.]” Id. § 337.990.

C. Wedding’s Retaliation Claims

The district court analyzed the Wedding II Defendants’ Rule 12(b)(6) dismissal arguments and their Rule 15(a)(2) futility arguments simultaneously. The court explained that it applied FLSA standards to Wedding’s FLSA and KWHA retaliation claims because the parties briefed the FLSA standards and did not “suggest[ ] that a different result would follow under the KWHA.” R. 23, Op. Regarding Dismissal, PageID 520, n.5. The parties have not challenged the district court’s application of FLSA standards to Wedding’s KWHA claims on appeal.

The district court ruled that Wedding’s Complaint was subject to dismissal under Rule 12(b)(6) because it failed to allege the prima facie elements of FLSA retaliation claims and also failed to allege that Madisonville Health’s Wedding I counterclaims were both objectively baseless and subjectively motivated by an unlawful purpose. The district court determined that Wedding’s proposed amended complaint was futile for the same reason.

The prima facie case is part of the familiar burden-shifting framework that the Supreme Court established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973), for proving employment discrimination and retaliation claims based on indirect evidence. It is an evidentiary standard, not a pleading requirement, and does not set the standard for alleging plausible federal employment discrimination claims. Washington v. First Nat’l Bank of Pa., 179 F.4th 1008, 1012– 17 (6th Cir. 2026). Instead, when courts address Rule 12(b)(6) motions to dismiss federal employment discrimination claims, “the ordinary rules for assessing the sufficiency of a complaint apply.” Id. at 1013 (quoting Swierkiewicz v. Sorema N. A., 534 U.S. 506, 511 (2002)). It was therefore incorrect for the district court to suggest that Wedding must plead a prima facie case of FLSA retaliation to withstand the Wedding II Defendants’ Rule 12(b)(6) motion to dismiss.

As we explained in Washington, the elements relevant to stating plausible claims for relief under antidiscrimination statutes like the FLSA’s antiretaliation provision “are found in the statutes themselves.” Id. at 1013–14. The usual inquiry with respect to an FLSA retaliation claim is whether a complaint, construed in the light most favorable to the plaintiff employee, contains sufficient facts to support a reasonable inference that “any person” “discriminate[d] against” the plaintiff because she “filed any complaint or instituted or caused to be instituted any proceeding under or related to” the FLSA. 29 U.S.C. § 215(a)(3). Interpreting a similar federal antiretaliation provision in Title VII, the Supreme Court has explained that “the term ‘discriminate against’ refers to distinctions or differences in treatment that injure protected individuals.” Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 59 (2006) (quoting 42 U.S.C. § 2000e-3(a)). To prevail on retaliation claims under Title VII, plaintiffs therefore “must show that a reasonable employee would have found the challenged action materially adverse, ‘which in this context means it well might have “dissuaded a reasonable worker from making or supporting a charge of discrimination.”’” Id. at 68 (citation omitted).

The district court ruled that, because Wedding founded her FLSA retaliation claims on Madisonville Health’s filing counterclaims and because the First Amendment protects Madisonville Health’s right to access the courts, Wedding must also plead and prove that the counterclaims are “objectively baseless and subjectively motivated by an unlawful purpose” to prevail on her retaliation claims. R. 23, PageID 520 (emphasis omitted) (first quoting BE & K Constr. Co. v. N.L.R.B., 536 U.S. 516, 531 (2002); and then citing Bill Johnson’s Rests., Inc. v. N.L.R.B., 461 U.S. 731, 748 (1983)). Wedding has not challenged the district court’s conclusion that she must allege that Madisonville Health’s counterclaims in Wedding I lack a reasonable basis in fact or law and are motivated by an improper purpose to withstand the motion to dismiss her FLSA and KWHA retaliation claims.²2. The Supreme Court has left open the question of whether First Amendment protections extend to lawsuits or counterclaims that are “reasonably based” but “would not have been filed but for a motive to impose the costs of the litigation process, regardless of the outcome, in retaliation for [federally] protected activity[.]” BE & K Constr. Co., 536 U.S. at 536–37; cf. Kim v. Lee, No. 22- 61, 2023 WL 2317248, at *3 n.5 (2d Cir. Mar. 2, 2023) (order) (declining to address “whether and under what circumstances a non-frivolous counterclaim may constitute unlawful retaliation under” the FLSA). The parties in this case have not briefed that question, and we do not address it. Nor do we address whether and under what circumstances a compulsory counterclaim under Federal Rule of Civil Procedure 13(a) can be retaliatory under the FLSA. Instead, she argues that her allegations that the counterclaims are baseless and retaliatory should be deemed true at the pleading stage.

The parties’ briefs on appeal assume that the Court’s “two-part” test used when interpreting the National Labor Relations Act applies in the same way to the FLSA’s retaliation provision. Bill Johnson’s Rests., Inc., 461 U.S. at 743–47. And Wedding argues that her Complaint and proposed amended complaint adequately pleaded both parts of this test. Although the parties’ briefing choices cannot force us to follow an improper view of the law, see Alexander v. S.C. State Conf. of the NAACP, 602 U.S. 1, 19 n.6 (2024), we have discretion to accept their legal assumptions on undecided issues when resolving the case before us, see Warner Chappell Music, Inc. v. Nealy, 601 U.S. 366, 371 (2024). Accepting both parties’ assumption that the two-part test applies and may be addressed at the pleading stage, the question before us is whether Wedding has plausibly alleged that Madisonville Health’s breach of contract and unjust enrichment counterclaims in Wedding I lack a reasonable basis in fact or law and are motivated by retaliatory intent. See Bill Johnson’s Rests., Inc., 461 U.S. at 744–45.

Wedding argues that the breach of contract counterclaim lacked a reasonable basis in fact. Because we do not accept conclusory legal allegations as true without specific facts to establish the cause of action, Linden, 75 F.4th at 601–02, we may set aside Wedding’s allegations that Madisonville Health’s breach of contract counterclaim was “baseless” and “frivolous[.]” R. 15-1, PageID 354, 356, 359, 360, 373, ¶¶ 10, 20, 41, 48, 132. A counterclaim has a reasonable basis in fact if it raises “a genuine issue of material fact that turns on the credibility of witnesses or on the proper inferences to be drawn from undisputed facts[.]” Bill Johnson’s Rests., Inc., 461 U.S. at 745. Under Kentucky law, the elements of a breach of contract claim are (1) the existence of a contract; (2) breach of that contract; and (3) damages flowing from that breach. Certified Restoration Servs., Inc. v. Fitzgerald, 739 S.W.3d 47, 60 (Ky. Ct. App. 2026). The contract can be express or implied. See Furtula v. Univ. of Ky., 438 S.W.3d 303, 308 & n.6 (Ky. 2014); Rider v. Combs, 256 S.W.2d 749, 749 (Ky. 1953). An express contract may be written or oral, see Veluzat v. Janes, 462 S.W.2d 194, 196 (Ky. Ct. App. 1970), while “[a]n implied contract is one neither oral nor written—but rather, implied in fact, based on the parties’ actions.” Furtula, 438 S.W.3d at 308 n.6 (alteration in original) (quoting Hammond v. Heritage Commc’ns, Inc., 756 S.W.2d 152, 154 (Ky. Ct. App. 1988)). The Kentucky Supreme Court has explained that, “[i]n the case of an implied contract[,] ‘some one or more of the terms and conditions are to be implied from the circumstances or conduct of the parties.’” Id. (quoting Dorton v. Ashland Oil & Refin. Co., 197 S.W.2d 274, 275–76 (Ky. 1946)).

There is no dispute that Madisonville Health agreed to pay Wedding a sign-on bonus in stages if she remained employed for one year. The disagreements are whether Wedding agreed to a repayment condition and whether her employment lasted a full year. In support of her retaliation claims, Wedding’s Complaint alleges that numerous other Madisonville Health employees signed written agreements to repay similar sign-on bonuses if they worked for less than one year, but Madisonville Health knew that she had never signed such an agreement. Wedding’s proposed amended complaint adds allegations that Madisonville Health’s sign-on bonus agreements with its employees were “normally” signed written documents and not oral agreements. R. 15-1, Proposed 2d Am. Compl., PageID 357, ¶ 25.

Yet Wedding’s own allegations (along with the judicially noticeable materials) plausibly suggest that a reasonable dispute of fact exists over the terms of the parties’ relationship. Wedding “concedes the accuracy of some of” Madisonville Health’s allegations: that the parties formed a contract with nearly all the terms in the written agreement that other employees normally signed. Castillo v. Joann Urquhart, M.D., P.C., 855 F. App’x 877, 879 (4th Cir. 2021). In her Wedding I complaint, she alleged that Madisonville Health promised to pay her “a total sign-on bonus of $7,000.00 in stages, if she worked” at the company “long enough for each stage.” R. 1-1, Class Action & Collective Action Compl., PageID 22, ¶ 47. “Even more specifically,” the Wedding I complaint conceded the precise timing and amounts of each payment in the agreement: 50% after 90 days; 25% after 6 months; and 25% after a year. Id., PageID 23, ¶ 48. Indeed, her Wedding I FLSA claims depend on the conclusion that the terms of her bonus were “pursuant to [a] prior contract, agreement, or promise causing the employee to expect such payments regularly[.]” 29 U.S.C. § 207(e)(3). Otherwise, the FLSA might exclude them from her regular pay. Id. Given these concessions that many of the other terms of the written agreement applied, it is at least “objectively plausible” that the repayment term in that agreement also applied either expressly or impliedly. Pro. Real Est. Invs. v. Columbia Pictures Indus., 508 U.S. 49, 65 (1993).

Wedding’s Complaint further alleges that the breach of contract counterclaim pleads only the existence of a written repayment agreement, but the counterclaim does not specify the agreement’s form—it alleges that “Wedding entered into an agreement” with Madisonville Health for a sign-on bonus worth $7,000.00 that included terms requiring her to reimburse the total amount if she failed to remain employed for one year. R. 1-8, PageID 91, ¶ 6. Under Kentucky law, moreover, Madisonville Health may rely on an implied contract even if it pleaded an express contract. See Rider, 256 S.W.2d at 749 (“[O]ne who brings an action on an express contract can rely on an express or an implied contract where he has not been required to make an election.”).

With respect to breach, there is no dispute that Wedding’s employment began on February 14, 2023. Wedding alleges that Madisonville Health placed her on suspension on February 11, 2024, and told her that her employment was terminated on February 14, 2024. Wedding attempts to frame this factual dispute as evidence that Madisonville Health’s claim was “baseless.” However, the facts surrounding Wedding’s suspension and termination could support an inference that Wedding did not remain employed for a full year, breaching the alleged contract. Wedding argues that the employer-employee relationship necessarily continues until the employer tells the employee that it is “end[ing] the relationship”—even if the employer made the decision to terminate the employee while she was out on a suspension. Appellant’s Br. 27 (first citing Slusher v. Hercules, Inc., 500 F. Supp. 165, 166 (W.D. Va. 1980); and then citing Davis v. Conn. Gen. Life Ins. Co., 956 F.2d 120, 123 (6th Cir. 1992)).

But the two cases she cites do not support this legal rule or resemble this case. The employer in Slusher asserted that it had fired an employee on May 6, 1976, but it continued to pay the employee until (and made her termination “effective” on) May 31. 500 F. Supp at 166. The district court held that the later date controlled for deciding whether her suit was timely. See id. The employer in Davis told the employee on January 28, 1988, that it was terminating his employment effective February 25, 1988. 956 F.2d at 121. We rejected the employee’s argument that the employer terminated his employment on January 28 (the day he received notice) because the termination letter identified February 25. Id. at 122–23. These cases say nothing about the termination date of an employee who was initially suspended and then told later that the suspension had become a termination.

The parties identify no relevant law on how to resolve this employment question. Indeed, we do not even know whether it raises a federal question under the FLSA or a state question under Kentucky law. And Madisonville Health is allowed to “press a novel” legal claim without a court later finding it objectively baseless. Pro. Real Est. Invs., 508 U.S. at 65.

As for damages, it is undisputed that Madisonville Health paid Wedding $5,250.00 of the sign-on bonus before terminating her employment, and Wedding did not return those funds.

Thus, because Wedding’s factual allegations have not shown the absence of “a genuine issue of material fact” regarding “the proper inferences to be drawn from undisputed facts,” she has not plausibly alleged that Madisonville Health’s breach of contract counterclaim lacked a reasonable basis in fact. Bill Johnson’s Rests., Inc., 461 U.S. at 745; cf. Iqbal, 556 U.S. at 678.

Wedding also argues that Madisonville Health’s unjust enrichment counterclaim lacked a reasonable basis in law. Again, we may set aside Wedding’s conclusory legal allegations that Madisonville Health’s unjust enrichment “legal theory” was “frivolous.” R. 15-1, PageID 361, ¶ 53; see Linden, 75 F.4th at 601–02. A claim has a reasonable basis in law “if there is any realistic chance that the plaintiff’s legal theory might be adopted.” Bill Johnson’s Rests., Inc., 461 U.S. at 747. When “no contract exists between the parties[,]” Kentucky law recognizes unjust enrichment or quantum meruit as “‘an equitable remedy invoked to compensate for an unjust act, whether it is harm done to a person after services are rendered, or a benefit is conferred without proper reimbursement.’” Normandy Farm, LLC v. Kenneth McPeek Racing Stable, Inc., 701 S.W.3d 129, 143 (Ky. 2024) (quoting Lofton v. Fairmont Specialty Ins. Managers, Inc., 367 S.W.3d 593, 597 (Ky. 2012)). Federal Rule of Civil Procedure 8(a)(3) permits parties to plead breach of contract and unjust enrichment theories in the alternative when, for example, there is a dispute about whether an express contract exists. See Solo v. United Parcel Serv. Co., 819 F.3d 788, 796 (6th Cir. 2016); Son v. Coal Equity, Inc., 122 F. App’x 797, 802 (6th Cir. 2004).

To prevail on an unjust enrichment claim under Kentucky law, a party must show three elements: “(1) [a] benefit conferred upon defendant at plaintiff’s expense; (2) a resulting appreciation of benefit by defendant; and (3) inequitable retention of benefit without payment for its value.” Jones v. Sparks, 297 S.W.3d 73, 78 (Ky. Ct. App. 2009). Wedding challenges the third element, arguing that “there is nothing unjust about” her retaining pay that Madisonville Health promised her for work that she performed. Appellant’s Br. 8. She argues that “[n]o Kentucky case has ever held that an employer can recover repayment under these circumstances” and that Madisonville Health’s unjust enrichment counterclaim “defies common sense and fundamental rules of fairness.” Id. But Madisonville Health’s counterclaims allege that it paid Wedding the first two installments of the sign-on bonus in exchange for her commitment to remain employed for at least one year and that Wedding did not fulfill that commitment. Courts applying similar unjust enrichment laws have held that an employer can prevail on an unjust enrichment theory against an employee who received a cash bonus in exchange for a commitment to remain employed for two years and did not fulfill that commitment. See Worldcom, Inc. v. Boyne, 68 F. App’x 447, 449–52 (4th Cir. 2003) (per curiam); see also Fessler v. Int’l Bus. Machs. Corp., 959 F.3d 146, 157 (4th Cir. 2020) (elements of unjust enrichment under Virginia law are (1) plaintiff conferred benefit on defendant; (2) defendant knew of benefit and should reasonably have expected to repay plaintiff; and (3) defendant accepted or retained benefit without paying for its value). Wedding’s factual allegations therefore have failed to show that there is no realistic chance that Madisonville Health’s legal theory might be adopted. See Bill Johnson’s Rests., Inc., 461 U.S. at 747. Accordingly, Wedding has not plausibly alleged that its unjust enrichment counterclaim has no reasonable basis in law. Id.

Because Wedding’s Complaint and proposed amended complaint do not adequately allege that Madisonville Health’s counterclaims lack a reasonable basis in fact or law—and Wedding has not challenged the district court’s conclusion that she must do so to state plausible FLSA retaliation claims—we may affirm on that basis and need not address whether she has also plausibly alleged that the counterclaims were motivated by an unlawful purpose.

IV. CONCLUSION

For the foregoing reasons, we AFFIRM the district court’s grant of the Wedding II Defendants’ motion to dismiss and the denial of Wedding’s motion for leave to amend.

MURPHY, Circuit Judge, concurring. This case implicates unsettled questions about the Fair Labor Standards Act (FLSA). The FLSA does not allow an employer to “discriminate against” an employee “because” the employee has filed an FLSA complaint. 29 U.S.C. § 215(a)(3). Pauline Wedding alleges that her employer, Madisonville Health and Rehabilitation, discriminated against her by filing counterclaims that sought to claw back a bonus because of her FLSA suit. In other contexts, though, the Supreme Court has refused to subject a party to liability for filing a claim in court unless the claim was both “objectively baseless” and subjectively pursued for an improper purpose. Pro. Real Est. Invs. v. Columbia Pictures Indus., 508 U.S. 49, 60–61 (1993). Does the FLSA’s anti-retaliation provision adopt this two-part test? The answer may well be debatable. But the parties simply assume that the test applies. So I agree with Judge Stranch’s opinion for the court that we may do the same. And applying this test at the pleading stage, I also agree that Wedding failed to plead facts plausibly suggesting that Madisonville Health’s counterclaims were objectively baseless. I write separately to add a few thoughts for future cases over whether the Supreme Court’s two-part test should extend to the FLSA’s retaliation provision.

I

The Petition Clause secures “the right of the people . . . to petition the Government for a redress of grievances.” U.S. Const. amend. I. The Supreme Court has long suggested (although it appears never to have held) that the act of litigating a claim in court falls within this right. See Borough of Duryea v. Guarnieri, 564 U.S. 379, 387 (2011); BE & K Constr. Co. v. NLRB, 536 U.S. 516, 525 (2002); Bill Johnson’s Rests., Inc. v. NLRB, 461 U.S. 731, 741 (1983); Cal. Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972); cf. Guarnieri, 564 U.S. at 402–03 (Scalia, J., concurring in the judgment in part and dissenting in part). Constitutional concerns have thus led the Court to read both the antitrust laws and the labor laws narrowly to avoid making a party’s decision to file a suit illegal. See BE & K Constr., 536 U.S. at 525–28.

Start with the antitrust laws. The Sherman Act bars, among other things, a “conspiracy” between competitors “in restraint of trade,” 15 U.S.C. § 1, or a single competitor’s efforts to “monopolize” an industry, id. § 2. Generally, two businesses cannot collaborate to oust another competitor from the market. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 553 (2007). But what if those two businesses (or a single monopolist) use litigation to harm a rival? Can this litigation qualify as a “conspiracy” “in restraint of trade” (or an attempt to “monopolize”) despite the right to sue under the Petition Clause? The Court has refused to interpret the antitrust laws in this way. See Pro. Real Est. Invs., 508 U.S. at 56–57. It has instead held that those laws immunize the act of litigating (a form of petitioning the “government for redress”) “from antitrust liability.” Id.

Yet the Court has carved out an exception to this immunity. It has concluded that the antitrust laws do prohibit “sham” suits filed for improper reasons. Cal. Motor Transp., 404 U.S. at 511 (quoting E. R.R. Presidents Conf. v. Noerr Motor Freight Inc., 365 U.S. 127, 144 (1961)). And it has adopted a “two-part” test to distinguish a sham suit (which can subject a party to antitrust liability) from a legitimate suit (which cannot). Pro. Real Est. Invs., 508 U.S. at 60. To qualify as a “sham,” a claim must “be objectively baseless” such that “no reasonable litigant” could expect to succeed. Id. And the party must have filed it with the “subjective motivation” to use the litigation’s costs (rather than the suit’s outcome) to harm a competitor. Id. at 60–61.

Turn to the labor laws. The National Labor Relations Act (NLRA) does not allow “an employer” “to interfere with, restrain, or coerce employees in the exercise of” their collective- bargaining rights in 29 U.S.C. § 157 or to “discharge or otherwise discriminate against an employee because he has filed charges” under the law. 29 U.S.C. § 158(a)(1), (4). But what if an employer sues employees in retaliation for the exercise of their rights or for filing charges? Can this litigation qualify as an “unfair labor practice” that the National Labor Relations Board (NLRB) may find illegal under § 158(a)(1) or (4)? The Court interpreted the NLRA narrowly to avoid this result. See BE & K Constr., 536 U.S. at 534–37. It rejected the NLRB’s view that § 158(a) made illegal “all reasonably based but unsuccessful suits” that an employer filed “with a retaliatory purpose” to punish employees for exercising their rights under § 157. Id. at 536–37. Here again, though, the Court retained the sham exception. See Bill Johnson’s, 461 U.S. at 743–44. And the NLRB later adopted the same two-part test from the antitrust context for this exception. See NLRB v. Allied Mech. Servs., Inc., 734 F.3d 486, 490–91 (6th Cir. 2013).

As I understand these cases, they do not find that these laws violate the Petition Clause as applied to legitimate (in contrast to “sham”) litigation. Rather, they invoke the canon of constitutional avoidance to hold that the language of the laws does not reach legitimate litigation. See BE & K Constr., 536 U.S. at 535–36; see also Guarnieri, 564 U.S. at 402 (Scalia, J., concurring in the judgment in part and dissenting in part). That distinction matters. If a defendant argues that a federal claim violates a constitutional right, the defendant likely bears the burden to prove this violation as an affirmative defense. See Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171, 195 n.4 (2012); 5 Charles Alan Wright et al., Federal Practice and Procedure § 1271, at 621, 638 & n.61 (4th ed. 2021). If, by contrast, the defendant relies on the canon of constitutional avoidance to narrowly interpret a federal claim, the plaintiff likely bears the burden to prove that the defendant’s conduct meets all the “essential” elements under the narrowly interpreted law. Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49, 57 (2005).

The Supreme Court has taken the latter approach in this petitioning context. So plaintiffs who challenge a defendant’s litigation efforts likely have the “evidentiary burden” of proving that the “sham exception” applies to those efforts. Westmac, Inc. v. Smith, 797 F.2d 313, 318 (6th Cir. 1986); see Campbell v. Pa. Sch. Bds. Ass’n, 972 F.3d 213, 221 (3d Cir. 2020); McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1558 n.9 (11th Cir. 1992). As a result, courts have dismissed claims at the pleading stage when the complaint failed to plausibly plead that the defendant’s conduct fell within this sham exception. See, e.g., Smith v. Miami-Dade County, 621 F. App’x 955, 960 (11th Cir. 2015) (per curiam); B&G Foods N. Am., Inc. v. Embry, 29 F.4th 527, 537–39 (9th Cir. 2022); CSMN Invs., LLC v. Cordillera Metro. Dist., 956 F.3d 1276, 1284–88 (10th Cir. 2020).

II

This case involves the FLSA provision that prevents employers from retaliating against employees for exercising FLSA rights. Should the Petition Clause compel a narrow reading of this law if an employer’s “retaliation” takes the form of a lawsuit (or, as here, a counterclaim)? If so, should the two-part test for the sham exception extend to this FLSA provision? The Second and Fourth Circuits have answered “yes” to these questions—at least in unpublished cases. See Kim v. Lee, 2023 WL 2317248, at *2–4 (2d Cir. Mar. 2, 2023) (order); Castillo v. Joann Urquhart, M.D., P.C., 855 F. App’x 877, 879 (4th Cir. 2021) (per curiam) (citing Darveau v. Detecon, Inc., 515 F.3d 334, 341 (4th Cir. 2008)). And the Tenth Circuit has agreed in a related context. See Martin v. Gingerbread House, Inc., 977 F.2d 1405, 1406–08 & n.3 (10th Cir. 1992).

I see valid arguments in both directions. As with any statutory question, we must begin with the text. See Rotkiske v. Klemm, 589 U.S. 8, 13 (2019). The FLSA prohibits employers from retaliating against employees who sue to enforce their rights: “it shall be unlawful for any person . . . to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter[.]” 29 U.S.C. § 215(a)(3) (emphases added). The first highlighted phrase (“discriminate against”) likely reaches “differences in treatment” of employees who file FLSA actions as compared to those who do not if the differences are “materially” harmful. Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 59, 68 (2006); see Muldrow v. City of St. Louis, 601 U.S. 346, 354 (2024). And the second highlighted word (“because”) likely incorporates a causation test. See Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 176–77 (2009). At the least, the word requires an employee to show that the employee’s FLSA complaint was a “but-for cause” of the adverse action. Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338, 352 (2013). Putting these phrases together, the employer must have taken an adverse action against an employee who filed an FLSA suit (but not other employees), and the employee’s FLSA suit must be the reason for that action. See Caudle v. Hard Drive Express, Inc., 91 F.4th 1233, 1237–38 (6th Cir. 2024).

Can we interpret this text to exclude an employer’s “objectively reasonable effort to litigate” a counterclaim even if the employer subjectively pursued this claim in retaliation for the employee’s FLSA suit? Pro. Real Est. Invs., 508 U.S. at 57. That reading may well protect the right to petition that the Supreme Court has suggested exists. But the canon of constitutional avoidance allows courts only to adopt a plausible interpretation of a statute; it does not allow us to rewrite the statute to avoid a constitutional question. See DHS v. Thuraissigiam, 591 U.S. 103, 133 (2020); Warger v. Shauers, 574 U.S. 40, 50 (2014). And at first blush, the objective element does not look like a particularly plausible reading of the FLSA. A lawsuit (or counterclaim) likely would qualify as a “materially adverse” action that could “dissuade employees” from filing an FLSA complaint. Burlington, 548 U.S. at 68, 70. So if the employer pursued this litigation only against employees who filed FLSA complaints, one might find that the employer “discriminate[d] against” these employees. 29 U.S.C. § 215(a)(3). And if the employer would not have filed the suit (or counterclaim) but for the employee’s FLSA complaint, one might also find that the employer’s discrimination arose “because” of that complaint. Id.; see Nassar, 570 U.S. at 347. This language thus suggests the employee needs to prove only the subjective element: “that [the challenged legal action] was intended to retaliate against the” employee for filing an FLSA complaint. Allied Mech. Servs., 734 F.3d at 490–91. Under this view, if the Petition Clause protects an objectively reasonable counterclaim that an employer filed with subjective animus, the employer would have to prove an “affirmative defense”: that the FLSA violates the First Amendment as applied to this counterclaim. Hosanna-Tabor, 565 U.S. at 195 n.4.

That said, I see one potential path to adopting the objective element of the Supreme Court’s “two-part” test. Pro. Real Est. Invs., 508 U.S. at 60. Consider an analogy to the causation element for claims under 42 U.S.C. § 1983. Plaintiffs sometimes pursue § 1983 claims alleging that the government retaliated against them for protected speech. See, e.g., Nieves v. Bartlett, 587 U.S. 391, 396–97 (2019); Hartman v. Moore, 547 U.S. 250, 254 (2006). In that context, the Court has held that a plaintiff must show a “but-for” “‘causal connection’ between the government defendant’s ‘retaliatory animus’ and the plaintiff’s ‘subsequent injury.’” Nieves, 587 U.S. at 398– 99 (quoting Hartman, 547 U.S. at 259–60). But the Court has adopted a similar two-part test (with objective and subjective elements) for claims that the police engineered a prosecution or engaged in an arrest because of a plaintiff’s speech. See Nieves, 587 U.S. at 401–02; Hartman, 547 U.S. at 263. As the Supreme Court has reasoned, these cases require “complex” causation inquiries where the defendant’s motivation is difficult to parse. Nieves, 587 U.S. at 401; Hartman, 547 U.S. at 265. The Court has thus adopted an absence-of-probable-cause objective test as an initial data point to decide whether a plaintiff could prove that an officer’s subjective animus drove the arrest or prosecution. See Hartman, 547 U.S. at 259–65; see also Nieves, 587 U.S. at 401–04; Amacher v. City of Tullahoma, 179 F.4th 999, 1002–04 (6th Cir. 2026).

Perhaps the same logic could justify the “objectively baseless” element in this retaliation- by-litigation context—at least with respect to mandatory counterclaims like Madisonville Health’s. Pro. Real Est. Invs., 508 U.S. at 60. The Federal Rules of Civil Procedure require defendants to file counterclaims that arise out of the same factual transaction as the plaintiff’s claims. See Fed. R. Civ. P. 13(a). If defendants fail to raise these counterclaims, they could lose the opportunity ever to raise them. So it could be “particularly difficult to determine” whether an employer’s counterclaim “was caused by” the Federal Rules of Civil Procedure or by the employer’s subjective animus. Nieves, 587 U.S. at 402. But if the suit is “objectively baseless,” that fact could show that the counterclaim was a “sham” pursued to harm the employee rather than to redress the employer’s injury. Pro. Real Est. Invs., 508 U.S. at 60.

On the other hand, a critical difference might exist between retaliation claims under § 1983 and those under the FLSA. The Court has long relied on the most analogous common-law tort to identify the elements of a particular § 1983 claim. See Nieves, 587 U.S. at 405. And the most analogous tort here (malicious prosecution) required plaintiffs to prove a lack of probable cause for the lawsuit that they challenge. See id. at 405–06. The Court’s objective lack-of-probable- cause element thus has roots in the history that it uses to interpret § 1983. See id. The Court, by contrast, has yet to suggest that we should interpret the FLSA’s language using the same common- law backdrop. To date, it has noted (at most) that “federal statutory claims of workplace discrimination” follow common-law causation standards. Nassar, 570 U.S. at 346.

Besides, Wedding might have reframed Madisonville Health’s alleged discrimination in a way that only indirectly implicated the Petition Clause. Cf. Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 556–57 (2014). Suppose Madisonville Health had a formal policy of requiring employees to repay a bonus if they worked for the company for less than a year. But suppose it had an informal policy of forgiving this repayment obligation for everyone but those who filed FLSA complaints. Madisonville Health would have made this policy decision in the boardroom, not the courtroom. Why should the company’s subsequent enforcement of its contract rights in court insulate this outside-the-courtroom discriminatory decision from legal challenge? The Petition Clause might protect the procedural right to sue in court, but it does not protect the substantive policy choices that the suit seeks to vindicate. Here, in other words, the clause does not give employers the right to discriminate against FLSA complainants. As I have said before, “‘substantive’ due process finds no better textual home if we move it from the Fourteenth Amendment to the First.” Gmeiner v. Kent, 181 F.4th 677, 687 (6th Cir. 2026).

Even if the objective-baselessness element is difficult to ground in the FLSA’s text, another source of binding law may well compel us to adopt that element anyway: Supreme Court precedent. The Court’s decision in Bill Johnson’s concerned the NLRA’s retaliation provision (in addition to the provision barring an employer from interfering with its employees’ collective- bargaining rights). See 461 U.S. at 735 & n.1, 740. The NLRA’s retaliation provision is nearly identical to the FLSA’s: “It shall be an unfair labor practice for an employer” “to discharge or otherwise discriminate against an employee because he has filed charges or given testimony under this subchapter.” 29 U.S.C. § 158(a)(4); cf. id. § 215(a)(3). And Bill Johnson’s read this provision to cover only “an improperly motivated suit lacking a reasonable basis” in fact or law. 461 U.S. at 744 (emphasis added). We normally interpret like statutes alike. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 252 (2012). So the Supreme Court’s reading of the NLRA presumptively extends to the FLSA’s similar text. See id.

Yet Bill Johnson’s used a view of the canon of constitutional avoidance that now looks outdated. Cf. Jack Daniel’s Props., Inc. v. VIP Prods. LLC, 599 U.S. 140, 165 (2023) (Gorsuch, J., concurring). The Court chose to consider more than the NLRA’s “literal language” to “be sensitive” to the right to petition. Bill Johnson’s, 461 U.S. at 741–42. Indeed, it barely discussed that language at all—relegating it to a footnote. See id. at 735 n.1. The Court thus did not explain how any ordinary person could read this language to immunize a “well-founded lawsuit” from its reach. Id. at 743. Nowadays, though, the Court has made clear that the canon of constitutional avoidance gets triggered “only when, after the application of ordinary textual analysis, the statute is found to be susceptible of more than one construction.” Clark v. Martinez, 543 U.S. 371, 385 (2005). No longer will the Court “rewrite a law to conform it to constitutional requirements.” Iancu v. Brunetti, 588 U.S. 388, 397 (2019) (citation omitted). Perhaps we could distinguish Bill Johnson’s on this ground. Then again, perhaps this distinction must come from the Court itself. It has told us that we must follow an on-point precedent even if related precedent has called it into question. See Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989).

At day’s end, the parties’ briefs on appeal allow us to avoid all these questions. They simply assume that the Court’s “two-part” test for the sham exception from the antitrust context applies to the FLSA’s retaliation provision. Pro. Real Est. Invs., 508 U.S. at 60. As the majority opinion notes, we may accept the parties’ legal assumptions to resolve this case narrowly. Because I find the law unclear, I agree with the majority’s approach.