Ninth Circuit Says Individual Managers Can Be Held Responsible for FLSA Violations, Regardless of Bankruptcy

In Boucher v. Shaw, the Ninth Circuit Court of Appeals ruled that individual managers/owners -- in this case a hotel’s CEO, CFO, and labor/employment manager -- may be held liable for unpaid wages, vacation, and holiday pay under the Fair Labor Standards Act (FLSA). The FLSA allows suits to be brought against individuals, in addition to the employer-company itself, in certain cases. Specifically, individuals can be on the hook if they "exercise control over the nature and structure of the employment relationship," such as the managers here.

Significantly, the court also held that even though the company had gone into bankruptcy, the claims against the individual managers could proceed all the same. The bankruptcy affects claims against the company, but not claims against the individual managers. This is an important principle for workers who are cheated out of wages by failing companies.