Can an individual owner of a company have liability for wage and hour claims?

It is sometimes overlooked but individual owners also may be liable for damages in wage and hour claims just as much as the company.  This occured in the recent case of Torres, et al. v. Gristede’s Operating Corp., et al., 04-CV-3316 (S.D.N.Y. Sept. 9, 2011).   Gristede’s is a large supermarket chain located in New York City.  Torres is the supervisor who brought a class action against the supermarket alleging that he was not paid overtime.

Although the parties did settle the matter, but the company was subsequently unable to make the payments pursuant to the terms of the settlement. As a result,  the plaintiffs reinstated their action against both the company and the company’s CEO, who was also a named defendant in the complaint.  The plaintiffs argued that the CEO was an employer under the law and the court agreed with them holding that “employer is defined broadly [under the Fair Labor Standards Act] to include any person acting directly or indirectly in the interest of the employee in relation to the employee” and that “person includes individuals, so that individuals may be held liable or responsible for violations of the law by a corporate employer.”

Although the CEO argued that the economic reality was that he was not an employer, the Court found  otherwise  because the CEO had full operational control over the company and was the one person who was clearly in charge of the company.  In addition, the CEO, in an unrelated lawsuit,  had submitted an affidavit describing that he was the sole owner of the company and essentially ran the entire operation.

Accordingly, any damages under the action are owed not only by the company, but by the CEO for his role as an employer.

You may contact the Law Offices of Rose H. Robbins for a free consultation to see if you have a case for unpaid overtime or minimum wages by calling (954) 946-8130 or by filling out the confidential form below which will arrive at our law offices instantly. If our office decides to accept your case and we enter into a written, signed retainer agreement you will not have to pay anything unless we win your case. Appointments are available at various locations in Palm Beach, Broward and Miami-Dade Counties.