Recent Decision Reinforces Personal Liability in Employment Law
Taking It Personally
By John S. Gannon, Esq.
As a management-side employment attorney, I know how frustrating it is for businesses to be sued by current or former employees. Employers who have been through the litigation process know it’s a stressful, time-consuming exercise that often requires their managers or supervisors to be deposed or called as a witness at trial.
Unfortunately, being a witness is not the worst outcome for managers and supervisors who get dragged into employment litigation. Many state and federal employment laws provide a path for litigious employees to individually sue their managers or supervisors, while at the same time suing the employer as a completely separate entity. These laws can put managers and supervisors in the dreadful position of having to personally defend themselves in a lawsuit, while exposing their personal assets (home, car, bank accounts, etc.) to risk if the plaintiff is successful. It also means having to pay defense costs and attorney’s fees regardless of how the case turns out. A recent Massachusetts federal court decision highlights the relative ease of bringing an individual liability claim against a supervisor in an employment lawsuit.
Elliott Eichenholz worked for Brink’s Inc. His supervisor was Gordon Campbell. According to Eichenholz, while he was out on a disability leave, Campbell issued him a performance-improvement plan (PIP) letter addressing Eichenholz’s performance deficiencies. The PIP letter also contained various demands Eichenholz would need to meet within a prescribed time frame.
Eichenholz returned to work about two months later. Upon his return, Campbell e-mailed Eichenholz, stating that he needed to develop a plan to address the issues raised in the PIP letter now that he was back to work.
From my perspective, Campbell’s approach appeared reasonable enough, but Eichenholz did not see it that way. He resigned a few days later and subsequently filed a lawsuit claiming that Brinks and Campbell discriminated and retaliated against him in violation of a host of federal and state employment laws, including the federal Family and Medical Leave Act (FMLA) and the Massachusetts Fair Employment Practices Law, which prohibits discrimination in employment (Chapter 151B). In his complaint, Eichenholz claimed he needed to resign “in order to ensure that he was no longer subjected to unlawful harassment, no longer subjected to a hostile work environment, and no longer in the precarious position that Campbell’s continuous violations and discriminatory behavior had caused.”
Campbell moved to dismiss the charges against him, raising two principal arguments. First, he argued the FMLA claim should be dismissed because that law does not allow for individual liability. Second, he contended Chapter 151B warranted dismissal because Eichenholz did not follow the proper procedural channels before filing that claim.
The court rejected both arguments. Although the FMLA does not expressly allow for individual liability against supervisors, courts have ruled that similar federal laws — including the Fair Labor Standards Act — permit personal liability against supervisors. This was enough to convince this court that FMLA liability could flow to Campbell. Also, because Campbell was on notice of the potential Chapter 151B claim early on, he could not rely on technical procedural errors to defeat the individual liability claim.
Because the Massachusetts anti-discrimination statute (Chapter 151B) allows for individual liability, supervisors can be personally sued in almost any lawsuit that alleges a violation of state anti-discrimination law. In addition, state and federal wage-payment laws, including the federal Fair Labor Standards Act and the Massachusetts Wage Act, can trigger individual unpaid-wage liability for certain executives, officers, and even managers within the organization.
In light of this vast potential for supervisor liability claims, we recommend litigation-avoidance training for managers and supervisors as a way to mitigate risk. Effective training is probably the single best way to combat individual liability exposure, as it puts managers and supervisors on notice of this very real threat. Training programs also highlight tips and strategies that managers and supervisors can use to avoid litigation crosshairs and keep the company out of expensive lawsuits.
If your manager or supervisor is sued individually, it may also be (somewhat) comforting to know that individual liability claims are often a strategic move meant to make the case more difficult to defend. It is rare — but not unheard of — that a manager or supervisor is left paying damages associated with an adverse judgment, rather than the business. Even so, adequate training can help prevent employment claims before litigation is filed, which is a win-win situation for both the supervisor and the company.
John S. Gannon is an associate attorney with Skoler, Abbott & Presser, P.C., a management-side labor and employment firm with offices in Springfield and Worcester.