Labor & Employment Law Daily Wrap Up, COVERAGE, LIABILITY—E.D. Pa.: Part-owner of restaurant fails on claim he was not ‘employer’ under FLSA, state law, (Nov 21, 2025)

By Ronald Miller, J.D.

Courts evaluate the “‘economic reality’ of the employment situation, examining whether the individual supervisor carried out of the functions of an employer with respect to the employee.”

An individual defendant, who was part-owner of a restaurant, was denied his motion for summary judgment against the claims of an employee that he qualified as an “employer” under the FLSA and Pennsylvania Minimum Wage Act. The court observed that the record contained facts that disputed the part-owner’s contention that he did not have authority to carry out any of the four Enterprise factors. On the other hand, the part-owner was granted his motion for summary judgment that he was not an “employer” under the Pennsylvania Wage Payment and Collection Law. There was no evidence that the part-owner took an active role in decision making on matters of pay or compensation ( Lin v. Lee’s House Restaurant, Inc. , No. 23-3111 (E.D. Pa. Nov. 18, 2025)).

An employee brought a suit against his restaurant employer alleging that it violated the FLSA, Pennsylvania Minimum Wage Act (PMWA) and the Pennsylvania Wage Payment and Collection Law (PWPCL), due to its failure to pay him minimum wage and overtime compensation. Presently before the court was an individual defendant’s motion for summary judgment.

The employee worked as a delivery driver at the restaurant from December 10, 2021, to January 14, 2023. During the employee’s tenure, the restaurant was owned by a father and son. In addition to his minimum wage and overtime claims, the employee also brought a claim for “Breach of Implied Contract for Reimbursement of all Costs and Expenses of Electric Delivery Vehicle, including Depreciation, Insurance, Maintenance and Repairs.” The FLSA claims were brought as a collective action. He brought all state-law claims on behalf of himself and as a Rule 23 class action.

Individual defendant. An individual defendant, the father, brought a motion for summary judgment on September 25, 2025, arguing that he was not an “employer” under the FLSA, PMWA, or PWPCL and thus cannot be held liable for violations of these laws. Further, he argued that the employee’s implied contract claim failed as a matter of law. For his part, the employee argued that questions of material fact remain as to whether the father was his employer under the applicable laws.

Employer status. To determine whether an individual supervisor had sufficient control over an employee to be held liable as an employer under the FLSA, courts evaluate the “‘economic reality’ of the employment situation, examining whether the individual supervisor carried out of the functions of an employer with respect to the employee.” The alleged employer must exercise “significant control.”

Enterprise factors. Factors to consider are whether the alleged employer had: “(1) authority to hire and fire employees; (2) authority to promulgate work rules and assignments, and set conditions of employment including compensation, benefits, and hours; (3) day-to-day supervision, including employee discipline; and (4) control of employee records, including payroll, insurance, taxes, and the like.”

The father argued that he did not have authority to carry out any of the four Enterprise factors. In re Enter. Rent-A-Car Wage & Hour Emp. Pracs. Litig., 683 F.3d 462, 467 (3d Cir. 2012). The father contended that his son “alone exercised the operational and payroll authority.” Rather, he contended that his role was that of a “line-level employee (sauce preparation/errands) with no managerial powers.”

However, the court observed that the record contained facts that disputed this characterization. The employee testified that he witnessed the father hire a stir fry cook or “fry wok” employee at the restaurant. He also testified that while the son managed his work as a delivery driver, it was the father who managed him in the kitchen in his secondary role of peeling shrimp. The employee further testified that the father paid his compensation, with the son handling his compensation only one or two times.

Thus, the court concluded that, at this stage, a genuine dispute of material fact existed as to whether the father exercised significant control over the employee to be considered his employer under the FLSA and PMWA. The conflicting deposition testimony in this case requires a factfinder to make credibility determinations and weigh evidence in order to decide whether the father possessed authority to carry out the four Enterprise factors.

Based on the record evidence, the court was satisfied that a genuine dispute of material fact existed as to whether the father qualified as the employee’s “employer” under the FLSA and PMWA. Consequently, the court denied summary judgment as to the FLSA and PMWA claims.

Employer status under PWPCL. The PWPCL was enacted to provide a vehicle for employees to enforce payment of compensation that they are entitled to but has been withheld by their employers. For an employee to hold an “agent or officer” personally liable for unpaid wages under the PWPCL, “evidence of an active role in decision making is required.” A plaintiff must show that the individual “was actively involved in corporate policy-making, such as corporate decision-making or corporate advisement on matters of pay or compensation.”

Here, the record did not include evidence that the father was a corporate policy maker or decision maker at the restaurant on matters of pay or compensation. The employee testified that it was the son who conducted his phone interview, hired him, and set his work responsibilities, schedule, and rate of compensation. With respect to the father, the employee’s testimony that he oversaw his work peeling shrimp and physically handing him his compensation did not provide evidence that the father took an active role in decision making on matters of pay or compensation.

Thus, based on the record evidence, the court was satisfied that no genuine dispute of material fact existed as to whether the father qualified as the employee’s “employer” under the PWPCL. Accordingly, the court granted summary judgment in favor of the father as to the PWPCL claim.

Implied contract claim. An implied-in-fact contract is a true contract arising from mutual agreement and intent to promise that has not been verbally expressed. Rather, the agreement is inferred from the conduct of the parties. Here, no implied contract was formed between the employer and the defendants. There exists no conduct in the record to infer that the defendants intended or agreed to reimburse the employee for the expenses of his electric delivery vehicle. While the electric vehicle expenses may be relevant to his minimum wage and overtime claims as “tools of the trade expenses” under the FLSA, they did not survive summary judgment as a stand-alone breach of contract claim.

Accordingly, the father’s motion for summary judgment was granted as to the employee’s PWPCL and breach of implied contract claims. On the other hand, the employer’s motion for summary judgment was denied as to the employee’s FLSA and PMWA claims.

The case is No. 23-3111.

Judge: Baylson, M.

Attorneys: Aaron B. Schweitzer (Troy Law) for Min Hui Lin. Ge Qu (Hang & Associates) for Lee’s House Restaurant Inc. dba Lee’s House, Sen Lin aka Shen Lin and Baiqun Lin.

Companies: Lee’s House Restaurant Inc.; Lee’s House

Cases: WageHour ClassActions CoverageLiability Procedure StateLawClaims PennsylvaniaNews