Unreported / Non-Citable
Background
Marquis Mariscal, a former tow truck driver for Fast Responder Towing LLC, doing business as JLS Towing, brought a proposed collective action under the Fair Labor Standards Act. He alleged that the defendants paid drivers a fixed amount for each vehicle transported and failed to pay time-and-one-half overtime when they worked more than 40 hours in a workweek.
Mariscal also alleged that JLS Towing president Summer Settle directed and actively operated the company and had decisionmaking authority over employment matters, including his pay. Settle moved under Rule 12(b)(6) to dismiss the claims against her, arguing that Texas law’s corporate veil protected her from personal liability.
The Court’s Holding
The court denied Settle’s motion to dismiss. It explained that the FLSA’s definition of “employer” can encompass individuals and that, under controlling Fifth Circuit precedent, a corporate officer who exercises operational control over a covered enterprise’s workers may qualify as an employer and be jointly and severally liable for unpaid wages.
The court concluded that Mariscal plausibly alleged operational control by asserting that Settle directed and actively operated JLS Towing and possessed decisionmaking power over his employment and compensation. Although the court noted concerns expressed by district courts about whether the FLSA displaces state-law limits on corporate liability, it held that existing Fifth Circuit precedent foreclosed Settle’s corporate-veil argument at this stage.
Key Takeaways
- A corporate officer may qualify as an employer under the FLSA when the officer exercises operational control over the company’s workers.
- Corporate title alone is insufficient, but allegations of authority over employment matters and employee pay can support individual liability at the pleading stage.
- Texas statutory protections for LLC members and managers did not require dismissal because controlling Fifth Circuit precedent governed the FLSA employer analysis.
Why It Matters
The ruling permits Mariscal’s overtime claim against Settle to proceed alongside the claim against JLS Towing; it does not decide whether she ultimately exercised operational control or is liable for unpaid wages. The opinion underscores that owners and officers may face personal exposure in Fifth Circuit FLSA cases when a complaint plausibly connects them to employment and compensation decisions.