In a case under the Fair Labor Standards Act, the Third Circuit recently held that: (1) an employee’s former employers could be responsible for alleged overtime violations under the Act as successors to her initial employer; and (2) her individual supervisors could be held individually liable under the Act for alleged violations. Thompson v. Real Estate Mortgage Network, et al., 2014 U.S. App. LEXIS 6150 (3^rd Cir. 2014).

Patricia Thompson was employed by defendant Security Atlantic as a mortgage underwriter. Subsequently she became employed by Real Estate Mortgage Network (REMN), described as a “sister company” of Security Atlantic, which then became defunct.

She alleged overtime violations under the FLSA by both companies and filed suit.  She also named the owners of Security Atlantic as individual defendants.  The Third Circuit noted that under the Act,  multiple persons or entities can be responsible for  a single employee’s wages as “joint employers” in certain situations, which applied here where there were allegations that REMN trained her while she worked at Security Atlantic and the companies were described as “sister companies.”

The court reversed the dismissal of her claim, cautioning that her allegations were subject to proof and that if she prevailed REMN could be liable under the Act as a successor company and the individual owners of Security Atlantic could be liable as well.