High Level CEOs Must Ensure Everyone Gets Paid

John Catsimatidis, who is running for Mayor of New York, is the President and CEO of Gristedes Foods Inc., a grocery chain based in New York City. Gristedes workers filed a class action law suit in 2004 claiming unpaid overtime violations under the Fair Labor Standards Act. The workers settled with Gristedes for $3.5 million. However, the store defaulted on its obligations. The Second Circuit Court of Appeals just ruled that, even if the grocery store would not pay, the workers were still entitled to the overtime they earned and that Mr. Castimatidis would be personally liable. In the case, Torres et al. v. Gristedes Operating Corp. et al., the court ruled that Mr. Castimatidis was an “employer” for purposes of the law. Even though he was a high level executive who did not have day-to-day contact with all the workers, he made decisions that directly affected the “nature of conditions of the employees’ employment.” That is, he controlled the operations of the stores tightly and had ultimate responsibility for decisions that affected worker pay.

This is an important decision, at a time when CEOs make 204,000% more than the average worker. Being above the fray does not insulate someone from responsibilities. Those who manage companies must be held accountable not only to their shareholders, but also to those employees on whose shoulders they stand.