Personal Liability Under the FLSA

Kayla Moreland , May 19, 2015

Can the owner of a restaurant qualify as an “employer” under the Fair Labor Standards Act (FLSA), subjecting him to personal liability for alleged wage violations?  That was the question in the recent case Reynoso v. Motel LLC, No. 1:13-cv-05004, where three restaurant employees sued their employer, Motel LLC, and the owner, alleging that both the restaurant and the owner violated the FLSA by failing to pay overtime.

In Reynoso, the court noted that “joint liability,” which is when more than one employer is subject to liability for the same underpayment of wages, is contemplated by the FLSA.  The employer and the owner argued that the owner should not be individually liable, asserting that the restaurant’s financial manager was the one responsible for failing to pay the workers overtime.  However, applying this principle to the facts of the case, the court determined that the owner was in fact an “employer” for purposes of the FLSA:  he oversaw all day-to-day operations, had hired and supervised the financial manager of the restaurant (who was in charge of payroll), and ultimately possessed final authority over the terms and conditions of the workers’ employment.  Taken together, the court found that the owner could be held personally liable for the alleged overtime violations.

Source: Jennifer Ballard, Court Holds that Restaurant Owner May Be Personally Liable for FLSA Violations,
http://www.jdsupra.com/legalnews/court-holds-that-restaurant-owner-may-be-90020/
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