E-Alert Case Updates
Managers are not Employers for Purposes of the Maryland Wage Payment and Collection Law
Roberto Campusano v. Lusitano Construction, LLC
In Roberto Campusano v. Lusitano Construction LLC, the Maryland Court of Special Appeals held that a manager was not an employer for purposes of the Fair Labor Standards Act (“FLSA”) and the Maryland Wage Payment and Collection Law (“MPCL”), which meant that unpaid employees could not sue their former managers to collect their wages. Additionally, the Court of Special Appeals held that trial courts must assess whether the plaintiff in a wage collection case is entitled to attorneys’ fees.
Campusano arose out of claims of four (4) construction workers, Roberto Campusano and Justo Portocarrero, Ivan Mello, and David Rosales, (“Plaintiffs”) for unpaid wages. Lusitano Construction LLC (“Lusitano”) was under contract for two (2) renovation projects: the Oro Pomodoro Restaurant in Rockville, Maryland; and the Valley Terrace Apartments in Baltimore, Maryland. Geoffrey de Oliveria was the sole owner of Lusitano and he managed the Oro Pomodoro project. Geoffrey’s father, Francisco de Oliveria, managed the Valley Terrace project. Lusitano employed Plaintiffs on these projects. Geoffrey stopped issuing payments to Plaintiffs, and they filed an action seeking to collect on their unpaid wages under the FLSA and the MPCL against Geoffrey, Francisco, and Lusitano.
At trial, a jury found that Geoffrey and Lusitano were liable to Plaintiffs for their unpaid wages. The jury, however, found that Francisco was not an employer within the meaning of the FLSA and the MPCL. Therefore, the Court entered judgment in favor of Plaintiffs, but the judgment did not address Plaintiffs’ claims for attorneys’ fees. Plaintiffs moved to modify the judgment, but the motion was denied. Plaintiffs initiated this appeal.
The Maryland Court of Special Appeals addressed two (2) questions: (1) was Francisco an employer within the meaning of the FLSA and the MPCL; and (2) were Plaintiffs’ entitled to attorneys’ fees.
The Maryland Court of Special Appeals upheld the jury’s determination that Francisco was not an employer within the meaning of the FLSA and the MPCL. In making that determination, the Court of Special Appeals used the “economic reality” test, which assessed whether the individual had “control” over the workers. An individual has control over the workers when: (1) the individual had the power to hire and fire the employees; (2) the individual supervised and controlled employee work schedules and conditions; (3) the individual determined the rate and method of payment; and (4) the individual maintained employment records. The Court of Special Appeals found that although Francisco was a project manager who controlled Plaintiffs’ work schedules and conditions of employment, such control was insufficient to establish liability under the FLSA and the MPCL. The Court of Special Appeals held that the statute clearly did not intend to impose liability for the payment of wages on individuals who were mere managers.
As to the attorneys’ fees, the Court of Special Appeals held that the trial court should have assessed whether Plaintiffs were entitled to attorneys’ fees. The Court of Special Appeals found that the FLSA and the MPCL were to be exercised liberally in favor of awarding fees to plaintiffs. Therefore, it was the trial court’s responsibility to at least make a finding as to attorneys’ fees. As such, the Court of Special Appeals remanded for a determination of attorneys’ fees.
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