Practice Areas

Wessels Sherman Wins Landmark Decision Concerning Personal Liability for Officers and Directors

January 2013

By: Sean F. Darke, Esq.

Over the past ten (10) years, wage and hour lawsuits in the State of Illinois have been one of the fastest growing areas in litigation. One major reason for the popularity is that individual officers, directors, or corporate agents could be personally liable under the Illinois Minimum Wage Law.

On December 14, 2012, Wessels Sherman secured a landmark decision, when a State Court Judge issued a long awaited decision denying the Plaintiff's ability to hold individuals personally liable under the Illinois Minimum Wage Law. [1] This decision is considered the first decision addressing this issue, specifically on whether or not the Illinois Minimum Wage Law holds officers, directors, or corporate agents personally liable.

The Judge correctly ruled that the definition under the Illinois Minimum Wage Law, regarding who an employer can be under the law, does not include officers, directors, or corporate agents. The Judge's analysis compared the definitions under the Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act, instead of the Acts' federal counterpart, the Fair Labor Standards Act. The Judge agreed that if the General Assembly wanted to make officers, directors, or corporate agents personally liable under the Illinois Minimum Wage Law, it would have specifically stated so in the Law, as it did with the Illinois Wage Payment and Collection Act.

Although the Illinois Wage Payment and Collection Act specifically states that officers, shareholders, or corporate agents can be personally liable, the standard is whether or not the officers, directors, or corporate agents knowingly permitted the employer to violate the law, which is a much higher standard than the legal test used under the Fair Labor Standards Act.