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Can I Sue My Company’s President Personally For Unpaid Overtime? I Need An Attorney!

| Jan 13, 2016 | overtime time violation |

Best Ohio Overtime Attorney Answer: Is my manager directly liable for overtime violations? How much can I sue my employer for in a wage theft case? What should I do if my job won’t pay me time and half for overtime work?

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As a regular reader of our wage and hour attorneysovertime blog knows, the Fair Labor Standards Act (“FLSA”) requires that all covered, nonexempt employees be paid at least the federal minimum wage of $7.25 an hour, plus time and one-half for all hour worked beyond 40 per workweek.  Similarly, R.C. § 4111.03 requires employers to pay nonexempt employees overtime wages for all hours above 40 per workweek. (See ​Am I Entitled To Overtime? Best Wage Lawyer!; If I Do Domestic Work, Can I Sue For Overtime Pay?; As A Salaried Employee, Am I Exempt From Overtime Pay?; and What If I Can’t Afford To Sue For Overtime Pay?).

An employee who has not been paid his or her rightful overtime wages may sue their employer under either the FLSA or § 4111, subject to some limitations. While both the FLSA and § 4111 provide for the award of attorneys’ fees to a prevailing employee, the FLSA is sometimes a better option for an aggrieved employee, as it provides for an award of liquidated damages in addition to the unpaid overtime.  Both the FLSA and § 4111 allow an employee to sue not only a company that has failed to pay overtime, but also certain managers and officers of the company.

A recent case in the Northern District of Ohio makes clear that a corporate officer with “considerable operational control” of a business will be jointly and severally liable to an employee who has not been paid her lawful overtime.  In Lopez-Gomez v. Jim’s Place, Alfonso Lopez-Gomez, a former kitchen worker at Jim’s Place, sued the restaurant under the FLSA for unpaid overtime.  Jim’s Place paid Lopez-Gomez by check for all hours worked up to 40 in any given week.  For hours worked beyond 40, Jim’s Place paid Lopez-Gomez in cash and they did not pay Lopez-Gomez time and a half for those extra hours.

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Lopez-Gomez brought suit against both Jim’s Place and Costa Taras, a partial owner and manager of the restaurant.Taras filed a motion for summary judgment, arguing that he was not an “employer,” as that term is defined by the FLSA.  Taras argued that Jim’s Place, LLC, a company formed to operate the Jim’s Place restaurant was the sole employer and that he was just an owner of that LLC, albeit an owner with managerial duties. Taras’ argument was absurd, as the court rightly held.

The FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee. . . .”  The controlling law in the Sixth Circuit, as found in Fegley v. Higgins, is that “a corporate officer with operational control of a corporation’s covered enterprise is an employer along with the corporation, jointly and severally liable under the FLSA for unpaid wages.

In this case, the Court held:

The term “employer” is defined in relevant part in the FLSA as “any person acting directly or indirectly in the interest of an employer in relation to an employee. . . .” 29 U.S.C. § 203(d). “The overwhelming weight of authority is that a corporate officer with operational control of a corporation’s covered enterprise is an employer along with the corporation, jointly and severally liable under the FLSA for unpaid wages.” Fegley v. Higgins, 19 F.3d 1126, 1131 (6th Cir. 1994) (internal quotation marks omitted); see also U.S. Dep’t of Labor v. Cole Enterprises, Inc., 62 F.3d 775, 778 (6th Cir. 1995); Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962, 965 (6th Cir. 1991).

In determining that Taras was an employer for the purposes of the FLSA, the court found that Taras (1) was a 50% owner of Jim’s Place; (2) was responsible for overseeing the restaurant and was on-site on a daily basis; (3) hired Lopez-Gomez; (4) set Lopez-Gomez’s pay rate; (5) made the determination to not pay Lopez-Gomez time and a half; (6) made the decision not to pay Lopez-Gomez overtime even after the Department of Labor initiated an overtime investigation; and (6) made all final decisions regarding employee pay.

Weak though Taras’ argument against individual liability was, his and Jim’s Place’s argument against liquidated damages was even more feeble. Liquidated damages in an FLSA case are presumed unless the defendant employer can establish that in failing to pay overtime they acted in good faith and had reasonable grounds for believing that they were not violating the FLSA.  Taras and Jim’s Place only argument against liquidated damages that they didn’t pay any of their employees overtime.  While admitting to such a uniform practice might have been a good idea if they were accused of a discriminatory practice, defending against an overtime claim by stating that one doesn’t pay anyone overtime is just absurd. The court agreed:

Defendants’ arguments fail. Even assuming that Defendants failure to provide overtime compensation was a practice applied to all their employees, this is hardly grounds for establishing good faith. Defendants do not deny that they failed to consult with an accountant, attorney, or anyone else in establishing their overtime practices. (SUMF ¶ 10; Response to SUMF ¶ 10.) Defendants have not pointed to any effort taken to ascertain the FLSA’s overtime compensation requirements. (See ECF Nos. 51-53.) Nor have Defendants asserted any conceivable reasonable grounds for failing to provide satisfactory overtime compensation to Plaintiff. Accordingly, the Court finds that considering all of the evidence in the light most favorable to Defendants, Defendants as a matter of law cannot establish good faith and reasonable grounds for failure to pay the requisite overtime compensation. Consequently, Plaintiff is entitled to liquidated damages if he is awarded damages for overtime pay.

So what’s the lesson?  First, this case demonstrates that even when a position is indefensible, employers and their attorneys will defend and argue.  Additionally, this case reiterates that liability for unpaid overtime may attach to corporate officers, executives, and owners, which in turn makes it more costly and risky to defend and may make early settlement more likely.

If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at The Spitz Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call (216) 291-4744.

Disclaimer:

The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.