07/20/2014 // Dallas, Texas, United States // Attorney Keith Clouse // Keith Clouse // (press release)
The Fifth Circuit Court of Appeals recently ruled in a Fair Labor Standards Act matter. Orozco v. Plackis, No. 13-50632 (5th Cir. July 3, 2014), available at http://www.ca5.uscourts.gov/opinions%5Cpub%5C13/13-50632-CV0.pdf.
The plaintiff worked at a pizza franchise. After the franchisees made changes to his salary, he quit and filed suit, alleging multiple violations of the FLSA. He settled with the franchisees. The plaintiff then added the franchisor (and founder of the pizza chain) as a defendant and won a jury verdict against him. The franchisor filed a motion for judgment as a matter of law. It was denied. The Fifth Circuit reversed that denial.
The court determined that the franchisor was not the plaintiff’s “employer” because he did not act directly or indirectly in the interest of an employer in relation to the employee. The court evaluated multiple factors and concluded that the plaintiff failed to produce legally sufficient evidence to prove that the franchisor was the plaintiff’s employer. The court noted, however, that it did not rule that a franchisor could never qualify as an employer for a franchisee’s employees. This ruling leaves open the possibility that a plaintiff could hold a franchisor liable under the FLSA.
This article is presented by the Dallas employment lawyers at Clouse Dunn LLP. For inquiries or additional information about FLSA compliance issues, send an email to [email protected] or call (214) 239-2705.
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