Are CEOs Individually Liability In Wage/Overtime Cases Under The FLSA?

The 11th Circuit Court Of Appeals Rules on a CEO’s Individual Liability Under The FLSA

In a case against Appliance Direct, Inc. in Florida, former delivery truck driver employees filed an overtime lawsuit and a retaliation lawsuit against the company and the CEO individually. In finding that the CEO could be held personally liable to the employees, the 11th Circuit Court of Appeals stated that Section 203(d) of the Fair Labor Standards Act (“FLSA”) defines the employer as including “any person acting directly or indirectly in the interest of an employer in relation to an employee.” Thus, the 11th Circuit ruled that an officer of a company can be personally liable as an “employer” under the FLSA if the officer has “operational control of a corporation’s covered enterprise,” which could be involvement in the day-to-day operation of the corporation or direct supervision of the employees at issue in the case.

In the Appliance Direct case, the 11th Circuit found that the CEO was part owner of the company, he guided company policy, and gave instructions to the managers regarding their job duties. The CEO was the ultimate decision maker at the corporation, he negotiated leases and vendor contracts, and importantly, he directed the employment practices directed at the employees that were issue in the case. The 11th Circuit affirmed the jury verdict holding the CEO personally liable for violations of the FLSA against the drivers.

Most FLSA overtime, minimum wage, and retaliation cases are filed solely against the company. However, many times, individuals at the company who participated in the violations should also be included in the lawsuit as individual defendants.

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