Case Shows Mid-Managers Can Be Liable Under Fair Labor Standards Act

Individual company owners and mid-managers can be liable under the Fair Labor Standards Act (FLSA), as Fiona W. Ong writes on the Shawe Rosenthal site.

Analyzing the recent case of Spears v. Patel from the Court of Appeals for the Eleventh Circuit, Ong discusses how the Act holds “employers” liable for minimum wage and overtime violations. Under the Act, the term “employers” is broadly construed to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.”

In Spears v. Patel, a front desk clerk worked at hotels operated by a father and son. The son was responsible for day-to-day operations where the employee worked. He scheduled work and directed the desk clerk to adjust room rates in consultation with his father, who was based in another state.

The employee sued the hotels and both father and son for wages and overtime pay. A federal magistrate judge ruled that both individuals were employers under the FLSA, and individually liable for unpaid wages and overtime. The son appealed. He argued that he could not be an “employer” because he was a wage-earner, not an owner.

The Eleventh Circuit ruled that a supervisor who is “involved in the day-to-day operation or has some direct responsibility for the supervision of the employee” may be an “employer” under the FLSA.

The ruling clarified that a supervisor’s control must be substantial and related to the company’s obligations under the FLSA, but even mid-level managers may have the necessary authority to trigger individual liability.

According to the author, this case illustrates how mid-managers can be liable under the Fair Labor Standards Act and face consequences for FLSA violations. Such violations are common, she writes, and employers should empower managers to speak up if they believe employees have not been paid appropriately.