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|Individual managing employees are
not personally liable for unpaid wages
Cornell v. Benedict (Virginia
Sent to Custom
Alerts™ subscribers on 10/16/2022
Sometimes, under some
statutes, individual managing employees can be personally liable
when an employer fails to pay wages. And, under other statutes,
they are not.
In this case from Virginia, a group of
clinicians filed a collective action against the employer and two
of the employer's managing employees for unpaid wages under
Virginia Code §40.1-29(J).
The clinicians argued the two
employees should be considered employers who were liable, jointly
and severally, with the employer. The two managing employees
argued they were not employers.
The Supreme Court of
Virginia held that the employees had no personal liability because
they were not "employers."
Under §40.1-29(J), an employer
is defined as "an individual, partnership, association,
corporation***who employs another to work for wages, salaries, or
on commission and shall include any similar entity acting directly
or indirectly in the interest of an employer in relation to an
The clinicians argued the definition under
§40.1-29(J) mirrored the definition found in the federal Fair
Labor Standards Act. The court disagreed with the clinicians'
statutory interpretation and found that under §40.1-29(J) the term
"employer" was narrower than Congress used in the FLSA.
The court looked at the definition of "entity," which is defined
as "an organization that has a legal identity apart from its
members or owners." The court explained absent from the legal
definition of "entity" was any reference to natural persons or
individuals. Thus, the court concluded the statute omitted
individuals from joint employer liability for unpaid wages under
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