Federal Appeals Court Hearing Georgia Wage and Hour Lawsuit Says Business Owner Was Protected From Personal Liability Through LLC

An Atlanta employment law case can be complicated by several factors – including the closing of a business or the legal status of a business’s owners. In a recent federal case, the business in question had been established through a rather complex series of agreements between various parties.

When the dust finally settled, a federal appeals court was called upon to determine whether one particular business owner could be held personally liable for the plaintiffs’ employment law claims, even though he was not the “bad actor” whose actions led to the lawsuit.

Facts of the Case

In a recent (unreported) federal appellate case, the plaintiffs were the former general manager and executive chef of an Atlanta restaurant that closed its doors after the plaintiffs and others had filed a number of claims against its owners, including the one defendant (a local celebrity/promoter who conducted business through a limited liability company) who remained in the case when it reached the court of appeals. The plaintiffs’ claims included allegations of breach of contract, failure to pay minimum wage and overtime wages, and fraud.

According to the plaintiffs, the defendant was a “business partner” in the operation of the restaurant and, as such, was jointly and severally liable for the actions of his general partner on behalf of the restaurant, even though the defendant himself did not personally commit any of the acts upon which the plaintiffs’ claims were based.

After discovery, the United States District Court for the Northern District of Georgia granted summary judgment to the defendant, holding that the plaintiffs common-law partnership or joint venture theory of liability against the defendant failed and that they had likewise been unable to “pierce the corporate veil” against the defendant.

Decision of the Court

The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s grant of summary judgment against the plaintiffs. According to the court, the primary issue on appeal was whether the defendant could be held personally liable for the plaintiff’s claims. Agreeing with the lower tribunal that the defendant was protected against personal liability because of the formation of a limited liability company, the court ruled that the defendant was entitled to summary judgment.

Get Legal Advice from an Atlanta Employment Law Attorney

There are many federal and state laws in place that are designed to protect workers in Georgia from unfair labor practices, including the failure of an employer to pay minimum or overtime wages. However, it is often up to the wronged employee to take legal action if these laws are violated. If you believe that your employer has failed to comply with the law with regard to your wages, you have only a limited time to assert a claim. To speak to an experienced Atlanta wage-and-hour lawyer about your case, please call Attorney John L. Mays at Parks, Chesin & Walbert at 877-986-5529 and schedule an appointment at your earliest convenience.

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