Ralph Peterson

Beggs & Lane
Pensacola, Florida
www.BeggsLane.com
RAP@BeggsLane.com
(850) 432-2451

Ralph Peterson is a partner with Beggs & Lane who represents employers in all in all aspects of labor and employment law, including EEOC, OFCCP, NLRB, and DOL Wage-Hour Administration claims. He also advises employers in all aspects of management-union relations, as well as reviews and prepares employment policies and procedures, employee handbooks, employment contracts, arbitration agreements, non-compete agreements and trade secret agreements, and affirmative action plans for U. S. Government contractors.

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Q. The attorney for one of my former employees sent a letter demanding payment for overtime compensation. The letter threatened to sue me personally, along with my corporation. I understood that only the employer—the company—and not the CEO or owners of the corporation could be sued under employment discrimination laws. Can I be sued personally for wage-and-hour claims?

A. Yes, you could be held personally liable for wage-and-hour (overtime compensation) violations under the Fair Labor Standards Act (FLSA).

The FLSA defines “employer” differently than the customary employment discrimination statutes. An employer is “any person acting directly or indirectly in the interest of an employer in relation to an employee.”

The courts have examined the totality of the circumstances and the “economic reality” of the employee-employer relationship. This means that, where an individual exercises “control over the nature and structure of the employment relationship” or “economic control” over the relationship, the individual is an employer under the FLSA and is subject to liability.

Thus, courts have held corporate officers to be individually liable when they had significant ownership interest, coupled with operational control of significant aspects of the corporation and decision-making authority on employment.