A federal judge in New York recently ruled that Mr. John Catsimatidis, the billionaire owner of the Gristedes grocery store chain in New York, is personally liable for damages accrued in a massive class action lawsuit brought by his assistant managers.
The litigation was brought by a group of Carlos Torres and other Assistant Managers who claimed that they should not have been denied overtime pay. The litigation was settled. Gristedes stopped making its required payments. Plaintiffs filed a motion for summary judgment to hold its owner, billionaire John Catsimatidis, personally liable. Attorney Justin Swartz of the law firm of Outten & Golden in Manhattan was the lead attorney on this case.
The court ruled that Mr. Catsimatidis is personally responsible. First, the Fair Labor Standards Act has a broad and liberal definition of employer. It include “any person acting directly or indirectly in the interest of an employer in relation to any employee.” 29 U.S.C. § 203(d).
The legal test that courts apply is called the “economic reality test.” It requires the individual to have:
(1) the power to hire and fire employees;(2) supervise and control employee work schedules;(3) determine the rate and methods of pay; and (4) maintain employment records.
The court held that this definition included Mr. Catsimatidis because “he is the one person who is in charge of the corporate defendant.”
This ruling is truly a great ruling for employees. It holds the individuals behind corporations personally responsible for failing to pay wages and does not allow corporations to avoid their wage debts by hiding behind the corporate shell.
Congratulation to Attorney Swartz and his entire team.