Court Grants Motion for Summary Judgment Against Individual Defendant Imposing “Employer” Liability on Company Owner
In Landaverde v. Dave Murray Construction & Design, Inc., the Court granted summary judgment in favor of plaintiffs imposing individual liability on the owner of the defendant company under the FLSA. See 15-CV-5379 (E.D.N.Y. Sept. 11, 2017). The Court granted liability as against the individual owner of the company and provided a helpful summary of the current state of the law.
Under the FLSA, liability may only attach to an employer, which is defined as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” In the Second Circuit, Courts consider the “economic reality” of the situation and evaluate whether the alleged employer: (1) had the power to hire and fire; (2) supervised and controlled work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records. The Court in Landaverde also acknowledged that it was bound to consider whether an individual had “operational control” over the company, as well as the totality of the circumstances. It found each of these factors met, or unopposed, and held the company owner jointly and severally liable for any damages awarded after trial.
Landaverde provides helpful confirmation of the applicable standards for individual liability under the FLSA, which only began to coalesce with some consistency following the Second Circuit’s decision in Irizarry v. Catsimatidis, 722 F.3d 99 (2d Cir. 2013). Landaverde, particularly in contrast to Irizarry, exemplifies the breadth of the FLSA’s reach under the circumstances: In Landaverde, the individually liable defendant was the owner of a small construction company, whereas in Irizarry, the individually liable defendant was the billionaire owner of a chain of supermarkets.