A recent case out of New York determined that where the president and CEO of a popular grocery chain failed to pay employees the back wages they were due, he was personally liable for millions of dollars in unpaid overtime compensation.
In Torres v. Gristede’s Operating Corp., mid-level managers at a chain of New York area grocery stores were misclassified as “exempt” under the Fair Labor Standards Act (FLSA) and were denied overtime for several years. The FLSA provides that all non-exempt employees are entitled to overtime pay in the amount of one and one-half times your hourly rate of pay for all hours worked in excess of 40 in any workweek. Although this sounds like a simple rule, one of the most common violations of federal wage and hour law is employers intentionally or inadvertently misclassifying workers as exempt. A knowledgeable overtime compensation attorney can provide crucial advice concerning whether you have been properly classified.
Here, a court determined that the managers were not exempt as previously classified and were entitled to back wages. However the CEO failed to pay the workers the amount due pursuant to the settlement agreement, claiming that he wasn’t the employer. The New York court rejected the CEO’s argument, noting that both federal and state law define “employer” as including “any person acting directly or indirectly in the interest of an employer in relation to any employee.” Further, because the CEO had control over opening and closing stores, as well as the power to hire and fire, he was considered an employer – despite the fact that he delegated these duties to others.
As a result, the CEO was personally responsible for paying the worker’s back wages.
For more information, or if you believe you have been misclassified and denied the compensation you are entitled to, contact the experienced Atlanta wage and hour attorneys Buckley Bala Wilson Mew LLP for a confidential case evaluation.