Author: Gerald L. Maatman, Jr.

By Gerald L. Maatman, Jr., Elizabeth Underwood, and Olga A. Romadin

Duane Morris Takeaways: On March 26, 2026, Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York issued an order denying certification of a Fair Labor Standards Act (“FLSA”) collective action brought by a study coordinator alleging that his employer, a medical school, misclassified him and a group of similarly-situated individuals in Castillo, et al. v. Albert Einstein College of Medicine, Inc. et al., No. 24 Civ. 00984, 2026 WL 834712 (S.D.N.Y. Mar. 26, 2026). Following discovery, the Court found that a higher standard for the first step of the conditional certification process was warranted, and on review of evidence submitted by the defendants as well as the plaintiff, it declined to certify the collective action, concluding that the differences in coordinators’ duties precluded a collective action.

Case Background

Plaintiff, a researcher in the Cognitive Neurophysiology Laboratory of the Albert Einstein College of Medicine, a medical school based in New York, brought a collective action against the College and three related entities, including a teaching college and the schools’ parent corporations, alleging that they had misclassified study and research coordinators as “learned professionals” exempt from overtime under the FLSA. Id. at *3.

The College filed a motion to dismiss Castillo’s amended complaint in July 2024, arguing that it was not an “employer” under the FLSA and NYLL, but the Court found this unavailing and denied the motion, and the parties proceeded to discovery. Id. at *1. Castillo then moved for conditional certification under the FLSA, seeking to encompass a collective of current and former employees working as research and study coordinators for the College of Medicine and its related entities who he alleged were not compensated for overtime work. Id. Castillo also sought to toll the FLSA statute of limitations period and asked the Court to authorize notice to individuals employed by the defendants as far back as three years. Id.

 The District Court’s Decision

The Court found that, in light of the substantial discovery between the parties, the plaintiff faced a higher threshold requirement of making a “modest plus” factual showing in step one of the Second Circuit’s two-step process to certify a collective action under the FLSA, which it ruled Castillo had failed to meet because evidence submitted by both parties was not convincing that a collective of similarly-situated individuals existed. Id. at *5.

In its analysis, the Court noted that classifying a category of employees as learned professionals exempt under the FLSA is not, on its own, enough for a finding of a “common policy, plan, or practice” to find them to be “similarly situated.” Id. at 6. Plaintiffs have to show a uniform misclassification by identifying individuals with similar duties and responsibilities, and Castillo had failed to do so here because his reliance on two declarations and six job descriptions lacked the weight and detail necessary to account for the work of hundreds of individuals in dozens of departments and programs across the institutions. Id. at *7-8.

The Court was further swayed by the defendants’ evidence of substantial job descriptions showing a variety of duties and responsibilities both demonstrating variation and fitting into the learned professional exemption.  Id. at *8-9. Defendants produced 49 job descriptions demonstrating that coordinators’ duties ran the gamut—while some were primarily tasked with data collection, others were responsible for developing clinical studies, making medical recommendations, or engaging with patients—and had “differing levels of intellectual rigor” and educational requirements. Id. 

Finally, the Court found that Castillo’s reliance on the deposition testimony of the College’s vice president of human resources actually bolstered the defendants’ position that the duties and responsibilities of coordinators vary widely from one position to the next, undermining his argument that they are similarly situated and thus eligible for conditional certification. Id. at *10-11.

 Implications For Employers

This decision offers several practical takeaways for employers in fields where workers may fall under an FLSA exemption.  Employers are well-served by maintaining and cataloging detailed job descriptions that accurately reflect the duties and educational requirements of each position.

The Court’s decision also highlights the strategic value of the “modest plus” standard for defendants facing FLSA conditional certification motions.  Where pre-certification discovery has already taken place, defendants in many circuits may involve this heightened standard and submit their own evidence to demonstrate that putative class members are not similarly situated with respect to their job duties and requirements.

By Gerald L. Maatman, Jr., Gregory Tsonis, and George J. Schaller

Duane Morris Takeaways: On March 17, 2026, in People ex. rel. Ill. DOL v. Quality Therapy & Consultation, Inc., et al., 2026 Ill. App. Unpub. LEXIS 594 (1st Dist. 2026), the Illinois Appellate Court affirmed the circuit court’s decision finding corporate officers were not “employers” as defined in section 2 of the Illinois Wage Payment And Collection Act (“IWPCA”), the corporate officers had not knowingly permitted underpayments, and accordingly, the corporate officers were not liable under Section 13 of the IWPCA.  Justice Margaret S. McBride authored the opinion on behalf of the Appellate Court.

The decision in Quality Therapy protects corporate decision-makers from personal and strict liability where those decision-makers do not “knowingly permit” a corporation, or such an employer, to violate provisions of the IWPCA. 

Case Background

In 1996, Quality Therapy and Consultation, Inc. was founded by Frances M. Parise and John Parise (collectively “the Parises”).  Quality Therapy, 2026 Ill. App. Unpub. LEXIS 594,at *2.  Quality Therapy provided occupational therapy, speech therapy, and physical therapy services in Illinois to long-term care facilities.  Frances Parise acted as Quality Therapy’s president and secretary whereas John Parise was the chief executive officer, and each owned 50% of Quality Therapy and shared authority for business decisions.  Id. at *2-3. 

After Quality Therapy incurred substantial legal fees from a 2015 federal investigation into its Medicare billing practices and experienced a slow in payments from a primary client, the State of Illinois, Quality Therapy’s profit margins shifted into the negative.  Id. at *3-4.  In September 2017, Quality Therapy, as a result of the negative margins, could not meet its payroll obligations and issued a WARN Act notice to its employees, “advising that the business would close and all employment would cease in 60 days.”  Id. at *4. 

Thereafter Quality Therapy informed staff they would not receive their September wages and Quality Therapy was closing on September 30, 2017.  Id.  Throughout September, the Illinois Department of Labor (the “Department”) received the first of “93 wage applications from [former] employees that would eventually total $550,496, exclusive of statutory penalties.”  See id. at *5.

Quality Therapy relied on a bank line of credit to fund payroll on a timely basis, and after the Parises notified the bank that Quality Therapy was closing, the bank immediately called the corporation’s line of credit and froze all funds on hand.  Id.  Quality Therapy never regained control of its bank account and was unable to access any of its money to pay its employees.

Circuit Court Case Background

In December 2019, the Department filed a three-count complaint, which was later amended in February 2020, and directed individual counts against Quality Therapy, as well as Frances and John Parise, that each knowingly permitted Quality Therapy’s underpayments of unpaid wages and other compensation.  The Department maintained all three defendants met the definition of employer under the IWPCA.  Id. at *7.

Quality Therapy had been dissolved and was found in default.  The Parises moved for summary judgment on the amended complaint and argued that the Illinois’ Supreme Court decision in Andrews v. Kowa Printing Corp., 217 Ill. 2d 101 (2005), “precluded a corporate officer’s individual liability under section 2 of the Wage Act.”  Quality Therapy, 2026 Ill. App. Unpub. LEXIS 594, at *7-8.  The Department responded that “[the Parises] each acted directly or indirectly in [Quality Therapy’s] interest, which made them ‘employers’ within the meaning of section 2.” Id. at *8 

The circuit court denied summary judgment and then presided over a two-day bench trial focusing on Quality Therapy’s ability to pay.  Id.  The circuit court entered default judgment against Quality Therapy, but, the circuit court rejected “the Department’s argument that the Parises were ‘employers’” as defined in section 2 of the IWPCA, and found that “only [Quality Therapy] was the wage claimants’ employer under section 2.”  Id. at *8.  The circuit court also denied the claims against the Parises under section 2 and found “[t]he only proper [IWPCA] claim brought under the pleadings against [the Parises] is grounded in” section 13 of the IWPCA.  Id.  The circuit court reasoned that Frances and John Parise, as corporate officers of Quality Therapy, had not knowingly permitted the underpayments and were not liable under section 13 since Quality Therapy was incapable of meeting its payroll.  Id.  

The Department appealed on the grounds that “the circuit court erred in finding that the Parises were not employers with Section 2.” The Department acknowledged its argument on appeal ran contrary to the Illinois Supreme Court’s decision in Andrews, 217 Ill. 2d 101, but the Department contended that the 2011 amendment to section 13 of the IWPCA “impliedly amended section 2 [of the IWPCA] and superseded Andrews.” Quality Therapy, 2026 Ill. App. Unpub. LEXIS 594, at *9.

The Appellate Court Decision

The Appellate Court affirmed the circuit court’s holding that the Parises were not employers within section 2 of the IWPCA.  The Appellate Court, applying the Andrews precedent and interpreting “the statutory language,” concluded “that the amendment to section 13 had no effect whatsoever on section 2” of the IWPCA.  Id. at *11.

The Appellate Court rejected the Department’s argument that the 2011 amendment to the IWPCA blended sections 2 and 13 such that it “would render anyone who had a decision making role in payment decisions personally liable for unpaid wages and final compensation.”  Id. at *9.  The Appellate Court explained the two sections contained distinct definitions, standards, and terms, and presumed that “the legislature did not intend, inconvenient, absurd, or unjust consequences.”  Id. at *10. 

The Department’s appeal focused on the last clause of section 2 stating that “any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee” is deemed an “employer” for purposes of the IWPCA.  Id. at *11 (quoting 820 ILCS § 115/2).  The Department asserted the last clause of section 2 should be read “in conjunction with section 13.” 

At issue was the underlined language, added to section 13 in the 2011 amendment:

“In addition to an individual who is deemed to be an employer pursuant to section 2 of this Act, any officers of a corporation or agents of an employer who knowingly permit such employer to violate the provisions of this Act shall be deemed to be the employers of the employees of the corporation.”  820 ILCS § 115/13.

The Appellate Court disagreed that the 2011 amendment to section 13 “effectively modified section 2 and dramatically changed a corporate decision maker’s potential liability for wages.”  Id. at *11-12.  The Appellate Court reasoned that the IWPCA imposes liability on “two separate and distinct definitions of ‘employer’” because “[i]f there was no distinction between the liability of the corporation and the individual officer, then there would be no reason to have two separate definitions of what constitutes an ‘employer.’”  Quality Therapy, 2026 Ill. App. Unpub. LEXIS 594at *12-13 (citing Elsener v. Brown, 2013 IL App (2d) 1209209 ¶ 66).

The Appellate Court also rejected the Department’s expansive interpretation of section 2 and section 13 as “unpersuasive.”  Id. at *13.  Notably, the Appellate Court cited the Illinois Supreme Court’s language in Andrews, which acknowledged “the breadth of the language” in section 2 was “confounding” because when read literally, it would “make an ‘employer’ out of every person who possesses even a modicum of authority over another employee, from the CEO to the head of the maintenance staff, as such persons undeniably act ‘directly or indirectly in the interest of an employer in relation to an employee.’”  Andrews, 217 Ill 2d. at 107.  Accordingly, following the Illinois Supreme Court, the Appellate Court opined that “[a] literal reading [of that clause] would result in absurdity or unjustness in part because of an employer’s strict liability for wages.”  Quality Therapy, 2026 Ill. App. Unpub. LEXIS 594at *13. 

Various other reasons supported the Appellate Court’s decision.  Andrews, the Appellate Court noted, has been consistently applied without “any court or litigant suggesting that the analysis was abrogated by the amendment to section 13 that took effect in 2011.”  Id. at *16 (collecting cases following Andrews.)  Additionally, the Appellate Court noted that the legislature’s drafted language across both relevant sections of the IWPCA were not constructed with “parallel wording” nor a declaration of an intent to change section 2’s meaning for the phrase “any person or group of persons.”  Id. at *18.  Following the Department’s interpretation of the IWPCA, the Appellate Court reasoned, would upend “well-established principles of corporate law” and “create personal liability for shareholders, officers, managers, and supervisory employees, regardless of the precision with which corporate formalities are observed, and would remove the fundamental protections afforded by long-standing principles of corporate law.”  Id. at *21-22.

Consequently, the Appellate Court found “the amendment to section 13 maintains the framework of the [IWPCA] – it did not alter the general definition set out in section 2 nor did it modify liability under section 13.”  Id. at *20. 

Finally, the Appellate Court also dismissed the Department’s “new argument on appeal” that it could rely on a self-adopted regulation “which blends sections 2 and 13 based on the Department’s reading of the amendment.”  Id. at *22.  The Appellate Court found the Department’s interpretation was not well founded and the regulation was “also flawed because it is not based on the new, clear prefatory clause in section 13.”  Id. at *26-27.

Accordingly, the Appellate Court affirmed the circuit court’s judgment.

Implications For Employers

Quality Therapy draws a line in the sand delineating when a corporate decisionmaker meets the definition of “employer” under section 2 of the IWPCA.  The Appellate Court relied on longstanding Illinois Supreme Court precedent to find the 2011 amendment to section 13 of the IWPCA did not alter the scope of section 2 of the IWPCA.  

Employer’s facing claims for violations of the IWPCA must ensure they comply with the payment provisions of the IWPCA.  However, protections for corporate-decision makers remain intact, and merely being in a decision-making role with respect to payment decisions is insufficient to establish personal liability for unpaid wages and final compensation under the IWPCA. 

Instead, Quality Therapy establishes that only those corporate decision makers who “knowingly permit” an employer to violate provisions of the IWPCA shall be also deemed an “employer of the employees of the corporation” pursuant to section 13 of the IWPCA.