A story at law.com (http://www.law.com/jsp/article.jsp?id=1187168523180) reveals that an increasing number of managers and executives are being sued personally for work-related decisions. For example, a hotel president was held personally liable for wage-hour violations because he was more than just a supervisor - he "had ultimate control over the business's day-to-day operations," and thus was instrumental in causing the violations. A court also held a supervisor liable for retaliation against an employee. And there is a suit pending against ex-EPA chief Christine Todd Whitman in her personal capacity for allegedly misleading New Yorkers about air quality after the September 11 attacks. The judge refused to dismiss the suit on summary judgment because the allegations, if true, "shock the conscience."
Several federal laws have been interpreted to hold managers personally responsible, such as the Fair Labor Standards Act, the Equal Pay Act, and the Family and Medical Leave Act. The notable federal exception is Title VII of the Civil Rights Act (prohibiting sex and race discrimination), which expressly state that a plaintiff may only sue an employer and not an individual. That does not, however, mean that an individual cannot be sued for discrimination under state laws.
Many corporations and LLCs believe incorrectly that they are shielded from any personal liability for actions they take in their business. Plaintiffs' attorneys are hoping that these lawsuits will make executives and managers think twice before engaging in illegal conduct.
These suits are especially problematic for small businesses, whose owners and managers cannot rely on large legal coffers to bail them out of trouble. Thus, even if the individual is ultimately vindicated, there is still substantial cost to the business, in legal fees, emotional distress, and time away from the business.
Ultimately, these lawsuits highlight the importance of having your attorney actively involved in your business's employment issues. It is vital that your attorney be involved from the beginning - not only after a complaint has arisen. Your attorney should be responsible for periodically reviewing your employment policies for compliance with state and federal laws, and your attorney should be involved, if not actively responsible for, investigations of employee complaints.
