Recently, the Second Circuit Court of Appeals ruled that the owner of a
business could be held personally liable for damages resulting from violations
of the Fair Labor Standards Act (FLSA). The FLSA provides employees certain
protections, including that workers receive at least minimum wage and
that non-exempt employees be paid overtime compensation at a rate of one
and one-half their standard rate of pay for each hour worked in excess
of 40 hours in any work week.
If you have any wage and hour questions or are concerned that you are not
getting paid all the compensation you are entitled to, it’s important
to consult with an experienced
Atlanta wage and hour attorney right away.
In the recent FLSA case,
Irizarry v. Catsimatidis, the court evaluated who should be responsible for actually paying the
money owed when a company is found to have violated the Act, such as by
not paying overtime. Here, the court found that the chairman and CEO of
corporate supermarket chain Gristede’s Foods, Inc., could be held
personally liable and responsible for paying those damages.
This case involved the Gristede’s supermarket chain, which operated
between 30 and 35 supermarkets in the New York City area and employed
approximately 1,700 workers. The workers sued for unpaid overtime under
the FLSA. The employees won, and the parties reached a settlement. After
the company defaulted on the terms of the settlement, the employees sought
compensation from the owner himself – John Catsimatidis.
The court determined that Catsimatidis could be found responsible and required
to pay damages according to the terms of the settlement. The court reached
this conclusion based on a number of considerations. First, the court
concluded that in certain circumstances, an individual may be considered
an “employer” under the FLSA and therefore personally liable
for violations of the statute. Factors which were important included the
fact that Catsimatidis was actively involved in running some of the stores,
and had contact with employees, vendors, and customers. He also was ultimately
responsible for the employees’ wages and signed their paychecks.
Even though he wasn’t typically involved in day-to-day operations,
he did have sufficient interactions and this, along with his limited high-level
management activity was sufficient to make him liable for the FLSA violations.
Finally, it is important to note that the Court found that it was irrelevant
that Catsimatidis wasn’t accused of being personally responsible
for the wage and hour violations. According to the court, the FLSA would
carry an “empty guarantee” to remediate employees for violations
if it didn’t hold an employer’s controlling officers accountable
under the law. As a result, the court found that Catsimatidis was personally
responsible to pay damages for the workers’ overtime claims.
For more information about the FLSA or any other wage and hour question,
please contact the knowledgeableGeorgia wage and hour attorneys at The Buckley Law Firm, LLC for an immediate consultation.