Escobar v. SteeleSoft Management, LLC, 1:12-cv-02426

Background

Escobar worked for Steelesoft from 2005–2012, regularly working overtime without overtime pay; she was paid a salary and experienced repeated late or missed paychecks between Nov. 2011 and May 2012.
Escobar resigned May 3, 2012, and sued Steelesoft and Scott R. Steele alleging violations of the FLSA, Maryland Wage & Hour Law (MWHL), and Maryland Wage Payment & Collection Law (MWPCL).
In April 2013 the Court granted unopposed summary judgment against Steelesoft, awarding Escobar unpaid wages, liquidated/treble damages, and $39,665.55 in attorneys’ fees and costs; the case was then administratively closed pending Steele’s bankruptcy.
After Steele’s bankruptcy dismissal and reopening of the case, Escobar moved for summary judgment (2019) to hold Steele individually liable; Steele opposed and sought further discovery, asserting counter-claims about Escobar owing Steelesoft unpaid vacation/time.
The Court denied Steele’s request for additional discovery (Rule 56(d) insufficiently specific), applied the FLSA/Maryland “economic reality” test, found Steele exercised control (hire/fire, discipline, time approval, ownership interest), and held Steele was an “employer” jointly and severally liable.
The Court granted summary judgment against Steele, denied Escobar’s request for supplemental attorneys’ fees without prejudice for Rule/local-rule deficiencies, and entered judgment for the prior $39,665.55 attorneys’ fee award against Steele.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Scott Steele is an “employer” under the FLSA, MWHL, and MWPCL	Steele exercised control over employment (hire/fire, discipline), approved time records, directed unpaid/off-the-clock work, and owned/managed Steelesoft, so he is jointly and severally liable	Steele asserts he was not direct supervisor, did not set schedules, managers handled payroll/timesheets, and needs discovery to rebut Escobar’s facts	Court held Steele was an “employer” under the economic reality test and granted summary judgment against him
Whether Steele is entitled to additional discovery under Rule 56(d) before summary judgment	N/A (plaintiff opposed delay)	Steele contended the stay prevented full discovery and filed a Rule 56(d) affidavit seeking more time to gather evidence	Court denied additional discovery: Steele’s affidavit was conclusory and failed to identify essential specific evidence; prior judgment against Steelesoft barred re-litigation
Whether Escobar is entitled to supplemental attorneys’ fees and costs from Steele	Escobar sought supplemental fees/costs and enforcement of prior fee award against Steele	Steele did not meaningfully contest the fees request	Court denied supplemental fees without prejudice for failure to comply with Local Rule 109 documentation requirements, but entered judgment enforcing the prior $39,665.55 fee award against Steele
Whether the earlier summary judgment against Steelesoft should be revisited	N/A (plaintiff relied on prior ruling)	Steele asked reconsideration instead of filing Rule 60, arguing he lacked counsel earlier	Court refused to revisit: Steelesoft had counsel and opportunity to oppose earlier motion and LLC must be represented by counsel; Steele cannot litigate on Steelesoft’s behalf

Key Cases Cited

Ricci v. DeStefano, 557 U.S. 557 (use of summary judgment standards)
Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment/genuine dispute standard)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment burden shifting)
Celotex Corp. v. Catrett, 477 U.S. 317 (failure of proof defeats opposition)
Kerr v. Marshall Univ. Bd. of Governors, 824 F.3d 62 (Fourth Circuit adopting economic reality test for FLSA employer status)
Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298 (economic reality factors)
Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132 (economic reality factors enumerated)
Friolo v. Frankel, 942 A.2d 1242 (Md. law — discretionary award of fees under MWHL/MWPCL)