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News | Jul 29, 2013

NEW JERSEY FEDERAL JUDGE DENIES MOTION TO DISMISS FILED BY OWNERS, DIRECTORS, AND MANAGERS WHOM WERE SUED IN THEIR INDIVIDUAL CAPACITY FOR OVERTIME VIOLATIONS

In a recent opinion, Judge Jerome Simandle for the District of New Jersey denied a motion to dismiss filed by individual defendants seeking to dismiss the Fair Labor Standards Act (“FLSA”) and New Jersey Wage and Hour Law (“NJWHL”) claims asserted against them.  See Adami v. Cardo Windows, Inc., 2013 U.S. Dist. LEXIS 102447 (D.N.J. July 23, 2013),

In this lawsuit, the plaintiffs, who worked as window installers, sought unpaid overtime compensation against defendants under the FLSA and NJWHL for hours worked over 40 each workweek.  The plaintiffs alleged that the company incorrectly classified them as independent contractors and that they were instead employees who were entitled to overtime compensation. Companies routinely violate the FLSA, as well as New Jersey overtime law, by incorrectly classifying workers as independent contractors in the belief that they do not have to pay overtime.  For example, window installers, carpet installer, painters, roofers, carpenters, construction workers, and workers for water restoration companies and fire restoration companies, are commonly, and often incorrectly, considered by their employer to be independent contractors and wrongfully denied overtime pay.

Judge Simandle cited to 4 specific factors that the Court should look to in determining whether the individual defendants could be considered employers under the FLSA or NJWHL:  1) whether the defendants had the power to hire and fire; 2) whether the defendants supervised and controlled work schedules or conditions of employment; 3) whether the defendants determined the rate and method of payment; and 4) whether the defendants maintained employment records.

In denying the motion to dismiss, the Court noted that plaintiffs alleged that the individual defendants supervised and controlled employee schedules and conditions, controlled the method of payment, and issued 1099 forms.  Moreover, the Court noted that every individual defendant was either an owner, director, or manager of the company.  The Court still denied defendants’ motion to dismiss even though it was never alleged that each individual defendant could hire or fire.

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