FLSA litigation against medium-sized businesses continues, and a common tactic in such cases is to assert that one or more owners or managers of the business is the plaintiff’s "employer" under the statute, and thus individually liable for the allegedly unpaid minimum wage and/or overtime. See generally Herman v. RSR Sec. Servs., Ltd., 172 F.3d 132 (2d Cir. 1999). However, absent evidence of control over the worker in question under the "economic realities" of the working relationship, such allegations against the individual must be rejected, as evidenced by a new decision from Judge Alexander Williams, Jr. of the District of Maryland. Caseres v. S & R Mgmt. Co., LLC, 2012 U.S. Dist. LEXIS 152724 (D. Md. Oct. 24, 2012).
In Caseres, Judge Williams deemed the Plaintiff’s factual allegations against the individual Defendant, Bergman, sufficient as a matter of law for purposes of Plaintiff’s pleading, because even though the sole allegation specific to Bergman (that he was " the founder, director and officer of . . . S&R and also the owner or one of the owners of . . . S&R") was itself insufficient, Plaintiff also alleged that all "Defendants" — including Bergman — violated his FLSA rights by paying him a salary for a workweek longer than forty hours. Construing these allegations in the light most favorable to Plaintiff, the Court accepted as sufficient as to Bregman the allegations that all the "Defendants" participated in the allegedly unlawful conduct. However, the Plaintiff and Bergman each submitted affidavits regarding Bergman’s role (or lack thereof) in Plaintiff’s employment with S&R, and on the basis of such affidavits the Court determined on summary judgment that:
(1) Bergman played no role in the hiring or firing of Plaintiff or any other S&R construction workers; (2) Bergman did not supervise or control Plaintiff’s or other construction workers’ work schedules, responsibilities, or conditions of employment; (3) Bergman played no role in determining Plaintiff’s wages or the wages of other construction workers; (4) Bergman played no role in maintaining payroll or other employment records; (5) Although Bergman is a 25% owner of S&R, the only human resources decisions he makes for the company concern the hiring and firing of the property manager; (6) Bergman and Plaintiff did not work in the same building, had minimal personal contact with each other, and the contacts they had appeared to be minor and occurred primarily at S&R social occasions.
Based on these uncontested facts, Judge Williams granted summary judgment to Bergman, and dismissed claims against him subject to Plaintiff establishing an evidentiary basis to re-assert such claims.
Allegations of individual liability in FLSA cases persist. Management must be mindful of the potential for this allegation — and the exposure it creates — in determining who will set wage policy for the company and ensure compliance. Further, state law always must be reviewed as state law standards for individual liability may be more expansive than the FLSA’s standard.