A recent Maryland federal court decision again outlined what workers, under the U.S. Fair Labor Standards Act and Maryland’s Wage and Hour Law, must plead a few, specific facts showing that owner-operators were directly involved in workday life and working conditions to hold the individual owners accountable for wage theft.
In Ford v. Karpathoes, Inc. et al. (No. ELH-14-00824; D. Md. Slip Op. Nov. 20, 2014), a handful of restaurant workers at an Italian eatery in Hampstead, Maryland, alleged that two individual owners ordered the restaurant's onsite manager to trim hours on payroll, despite it being inaccurate and underpaying staff. The workers also alleged that they complained directly to one owner-operator. One waitress was also never even put on payroll by that owner-operator, and she filed suit for all minimum wages owed for every hour worked.
The Court held these facts sufficient to state a claim to go to court — not just against the company, but against these individuals.
In summary, the federal court held these owners individually liable because they were onsite and “controlled” the workers, and “controlled the structure of the employment relationship.” As individuals, they were employers as defined by the FLSA and Maryland’s Wage and Hour Law.
While the owners wished to have the lawsuit against them dismissed — and the workers only sue the restaurant — the Court rejected their Motion to Dismiss. The Court noted that dismissal would be appropriate if workers had made a “thin” pleading, such as solely stating that individual owners had a “parent-subsidiary” relationship. But that was not enough; where specific facts are pled, as above, that was enough.
In addition, the Court held in no uncertain terms, that workers did not need to state estimates of unpaid hours of work in the lawsuit. The Court reasoned that employers are tasked by U.S. and Maryland law to keep three years of wage records on file. Employees can seek those records through legal discovery during the lawsuit.
Lastly, the Court noted that restaurant employers must inform employees of the tip credit against the minimum wage if paying only that tip-credit amount, which is as low as $2.13 per hour. (FLSA § 203(m); see also U.S. Dept. of Labor Fact Sheet # 15: Tipped Employees) Here, the employer allegedly did not tell them about it and the workers had a right to sue for their entire minimum wage.
Lebau & Neuworth, LLC, is experienced at holding employers accountable. If you think your rights have been violated, give us a call or email us, we may be able to help.
