In Torres et al. v. Gristedes Operating Corp. et al., Case No. 11-4035 (July 9, 2013), the Second Circuit Court of Appeals held that a mayoral candidate, a supermarket owner, and an executive can be individually liable for settlement payments arising of a Fair Labor Standard Act class action.
In this case, the parties settled the class action. A class action is a discrimination case brought by a few plaintiffs on behalf of many employees. All of the members who agreed to be part of the class (the individuals who were discriminated against) receive their part of the settlement. In order for a fair disbursement, the Judge must adopt the settlement.
Under the settlement, the defendants agreed to pay $3.5 million to the class. However, the defendants defaulted on the payments. The judge’s order allowed the class to enforce the settlement. Defendants, who sought to change the settlement, stated that they were not bound by the settlement because they were not “employers.”
The Second Circuit Court of Appeals disagreed. The Court noted that the defendants exercised “operational control” that affected the class’ employment. For example, based of their decisions, the employees’ wages were affected. Because defendants were employers, defendants were bound by the settlement. Based on this decision, defendants now have to pay the owed money.