Narodetsky v. Cardone: Holding Non-Officer Individuals Liable under FMLA

Exacerbating a current split among federal courts on the issue, a federal court in Pennsylvania has held that any individual, not just corporate officers, can be held liable under the FMLA’s individual liability provisions. In Narodetsky v. Cardone Industries Inc., 2010 WL 678288, NO. 09-4734 (E.D. Pa., Feb. 24, 2010), the Eastern District of Pennsylvania found that any individual, regardless of his or her status in the corporate hierarchy, can be held individually liable under the FMLA if he or she exercised control over the plaintiff’s termination or medical leave decision.

BACKGROUND

Plaintiff Dmitry Narodetsky had worked for 12 years as a tool designer at Cardone Industries’ plant in Northeast Philadelphia. In August 2009, he learned that he needed surgery due to a leg injury; he and his wife had several conversations with managers in the human resources department to inquire about short-term disability and scheduling a 10-day medical leave.

Narodetsky alleges that immediately following those conversations, Cardone Industries managers conducted a forensic search of his computer to find a reason to justify his termination, thereby obviating the need to grant his requested leave. Shortly thereafter, he was called in to a meeting and confronted with a pornographic e-mail that he had sent from his work computer about a year earlier. He was terminated and denied his requested benefits.

Narodetsky filed suit against the company, as well as the company president and CEO, a human resources manager, and three other individual defendants who he alleged were involved in the effort to terminate his employment, alleging that all defendants violated his rights under the Family and Medical Leave Act (“FMLA”), the Employee Retirement Income Security Act (“ERISA”), and other laws. Narodetsky alleged that each individual defendant played a role in orchestrating and carrying out a plan to violate his statutory rights.

Individual Defendants May Be Held Liable

Defense lawyers argued that the individual defendants should be dismissed from the case because they could not be held liable under FMLA’s individual liability provisions.

The FMLA makes it “unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this subchapter.” 29 U.S.C. section 2615(a)(1). The FMLA defines “employer” as “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” 29 U.S.C. section 2611(4)(A)(ii)(I).

Some federal courts – e.g., those in Pennsylvania, New Jersey, and Ohio—have extended liability to any individual who has the authority to hire and fire, or who has “sufficient control over the conditions and terms of the plaintiff’s employment.” Narodetsky v. Cardone Industries Inc., 2010 WL 678288, *3. Other federal courts – e.g., in Minnesota, Kansas, and Utah—have determined that individual liability can only extend to corporate officers. Id. at *5. But those rulings, the Pennsylvania District Court found, are not “in accordance with the case law in this circuit.” Id.

The Narodetsky court sided with the former, finding that any individual who exercised control over the plaintiff in the decision to terminate him could be held individually liable. The District Court specified that mere conclusory allegations would not be enough to sustain individual liability. Id. at *4. However, in this case, the Court found that plaintiff had alleged enough specific facts about each defendant’s involvement in the scheme to terminate him to justify their inclusion in the case. Id.

The District Court judge concluded that anyone who exercises control over an employee in termination or medical leave decisions can be liable under FMLA. In this case, all five individual defendants were properly named as defendants because:  ”Specifically, the allegations support an inference that each of the defendants exercised control over plaintiff in the decision to terminate him.” Id.

CONCLUSION

Decisions like the Narodetsky opinion could have broader applications than merely FMLA cases. Extrapolating the Narodetsky opinion, individual liability in an FLSA lawsuit, for example, could similarly extend to any individual employee who exercises control over a pay decision.

More importantly, individual liability has significant implications for employers, both internally before litigation occurs, and post-litigation. As a preventative measure, employers should strive to ensure that every employee with decision-making powers is familiar with the various statutes relating to employment and put policies and procedures in place to prevent inadvertent or unknowing violations of those statutes. An experienced employment attorney can help employers devise an effective plan for prevention.

Post-litigation, employers need to determine quickly whether a named individual can be represented by the same counsel as the company, or whether that individual needs to seek out separate counsel because their interests diverge from that of the company in some way. This is complicated if a named individual has left the employer’s organization, and especially so if the individual has left on bad terms. If faced with any of these circumstances, employers should consult with an experienced employment attorney.

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Jeremy J. Gray

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