Is A Sole Shareholder An Employer?

A corporate employer controls its employees. A sole shareholder controls the corporation. Is the shareholder an “employer”? A California Court of Appeal answered this question last week in Leek v. Cooper.

In this case, several employees brought suits (two cases were consolidated for purposes of the opinion) against a California corporation and its sole shareholder alleging age discrimination and violation of the California Family Rights Act. The plaintiffs did not deny that only an “employer” may be liable to an employee and under these causes of action. Accordingly, the plaintiffs claimed that the sole shareholder was an “employer” because he exercised control over them. The plaintiffs also argued that the sole shareholder was liable under an alter ego theory.

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