Broach et al v. Arkansas Convalescent Centers Inc et al

Filing 142

ORDER denying 122 Motion to decertify; partly granting and partly denying 125 Motion to strike; granting in part and and denying in part 119 Motion for partial summary judgment on the state law claims; and denying without prejudice 97 Motion for summary judgment about Deshotels's employer status. The Court will hold a pre-trial conference to handle any remaining matters. Signed by Judge D. P. Marshall Jr. on 4/7/2014. (thd)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
PINE BLUFF DIVISION
JEANETTA JOHNSON, SHARON
DUNCAN, and YOLANDA THOMAS,
each individually and on behalf of
others similarly situated

PLAINTIFFS

No. 5:12-cv-143-DPM

v.

ACC1 LLC, dfb/a Arkansas Convalescent
Center; CAPSTONE HEALTH GROUP LLC;
and KYLE M. DESHOTELS, individually and
in his official capacity

DEFENDANTS

ORDER
1. Decertification. In this FLSA case, the Court conditionally certified
a collective action of patient-care employees who say they weren't paid
overtime for working through lunch at a nursing home. N2 55 at 3. There
were opt-ins; and the group currently stands at twenty eight. Whether the
group stays intact depends on whether all the Plaintiffs are similarly situated.
This, in turn, depends on the facts surrounding Plaintiffs' claims, the
Defendants' available defenses, and whether trial as a group is fair and
manageable. Douglas v. First Student, Inc., 888 F. Supp. 2d 929,933 (E.D. Ark.
2012).

Plaintiffs worked as patient-care workers at the same nursing home
around the same time. All were subject to a policy of having time for lunch
automatically deducted from each day's pay. At a general level, Plaintiffs all
say that understaffing at the nursing home often meant working through
lunch. And all say that Defendants knew, or should have known, about the
missed lunches, but deducted time anyway. Hertz v. Woodbury County, Iowa,
566 F.3d 775, 781-82 (8th Cir. 2009).

Defendants say Plaintiffs were

responsible for letting HR know about missed lunches by filling out a form
and having management approve the overtime. Some employees did this.
NQ 122-6. Others didn't.

This reclamation policy is the center of much dispute. The policy is
important because it goes to what Defendants knew about the missed lunches
and what they did or didn't do in response. 29 C.P.R. § 785.13. Some
Plaintiffs contend they didn't know about the policy or what forms they
needed to fill out. Others note that they filled out overtime forms but weren't
always paid. Some say an off-the-books policy discouraged seeking overtime
altogether. These are marginal variations on a theme. The reclamation policy
wasn't formalized in the employee handbooks until May 2012. Compare
NQ 106-1 with NQ 44-9 and NQ 44-10. Managers and nursing directors appeared
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to handle the missed-lunch problem differently. And among at least some
employees, there seemed to be a tacit understanding that lunch was an
expected casualty of being too busy.

Defendants acknowledge that

unapproved overtime was always prohibited as a matter of policy. NQ 44-6
&44-8.

Ultimately, whether the reclamation policy was unknown, unenforced,
or informally discouraged makes little legal difference. Any underpayment
to employees flowed from the same common policy of automatically
deducting thirty minutes for lunch and Plaintiffs' alleged inability, for various
reasons, to reclaim this time.

Any disparity in experiences with the

reclamation policy is overshadowed by the many other facts that bind these
employees' claims together.
The available defenses don't necessitate individual trials either. The
argument against liability is straight forward: Plaintiffs knew about the
reclamation policy, used it from time to time, and weren't discouraged from
doing so. Defendants, therefore, had no reason to know folks were missing
lunch or working without pay. This defense will inevitably require some
individualized testimony. Defendants can offer this evidence against the

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representative Plaintiffs' claims. The main defense is a common one- you
could have; you should have; and we didn't know you weren't. This common
defense favors keeping the group together.
Last, trying these claims together makes good sense.

Thorough

discovery is complete. Individually, the claims are probably not large enough
to encourage zealous pursuit or even hiring a lawyer. And given the many
similarities among Plaintiffs' experiences, efficiency weighs in favor of
certification.

The law requires similarity, not identity, on material

circumstances. Enough similarity exists here. The motion to decertify, NQ 122,
is denied.
2.

The Mfidavits.

The holiday-related delay In getting signed

affidavits is immaterial. But Defendants should have disclosed, before the
discovery cutoff, the new witnesses that testified by affidavit: Munn,
Williams, Thomas, and Blevins. Because Plaintiffs' theory has evolved
somewhat, these four witnesses may testify at trial. Defendants must make
each available, though, for a two-hour deposition at Plaintiffs' option and
convenience by 25 April 2014.

Plaintiffs must schedule any of these

depositions by 11 April2014. Motion to strike, NQ 125, granted in part and
denied in part. NQ 122-4, 122-5, 122-14, 122-15, 124-2, 124-3, 124-4, and 124-5
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are stricken.
3. State law claims. Mostly for the reasons previously explained, NQ 55

at 6-7 & NQ 94 at 1-2, the unjust-enrichment and promissory-estoppel claims
fail as a matter of law. Johnson, Duncan, and Thomas have made no
argument about promissory estoppel. That claim is essentially abandoned,
and cannot succeed, in any event, because it duplicates exactly the statutory
claims.* Johnson, Duncan, and Thomas argue hard that this case is like QHG
of Springdale v. Archer, 2009 Ark. App. 692, 373 S.W.3d 318, and thus their

unjust-enrichment claim should go to trial. They make a strong case on the
health-care rules and needs that prompted their alleged overperformance.
The Court, however, sees two important distinctions. Dr. Archer's
contract did not cover his 24/7 on-call situation; as a matter of law, Johnson's,
Duncan's, and Thomas's contracts cover overtime and straight time, and
entitle them to wages for time worked but unpaid. Second, the circumstances
of alleged compulsion are different in kind and quality. Dr. Archer was the
only ER doctor; his protests were regular,loud, and longstanding; and he had
no way out. Taking the proof in the light most favorable to Plaintiffs, their

*There is a hint of straight time claims. Plaintiffs' contracts, informed
by the governing law, entitle Plaintiffs to be paid for all hours worked.
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situation was less severe in each aspect. Finally, an unjust-enrichment claim
here is yet a third layer of duplication. Plaintiffs can't recover more than once
on what is essentially the same claim.
Defendants acknowledge that Thomas's Arkansas Minimum Wage Act
claims go forward. NQ 120 at 1 n. 1. Duncan's and Johnson's do too. Taking
any disputed facts in Plaintiffs' favor, McCall v. Disabled American Veterans,
723 F.3d 962, 965 (8th Cir. 2013), there remain questions about what Duncan
and Johnson knew about the reclamation policy and whether they were
discouraged or prohibited from using it. Was the policy, as Defendants argue,
well established, clear, and accessible? Johnson says, for example, that she
didn't know how to reclaim missed-lunch pay until a co-worker pointed it
out. NQ 128-7 at 11. Lunch break was only monitored closely, she continues,
starting in October 2012. NQ 128-7 at 5. Duncan contends she was not told
about the reclamation policy until 2010, and was never told about how or
when she could take lunch. NQ 102-3 at 10, 15-16.
What the workers knew about the policy, whether they in fact could use
it whenever needed, and what Defendants knew about the many missed
lunches are material and disputed facts. Although the form has existed for a
long time, there was no written policy until after suit was filed. Defendants'
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authorities present much clearer factual situations. Unlike in Hertz, for
example, there is some evidence here that Plaintiffs were discouraged from
claiming overtime. Compare 566 F.3d at 782. The motion for partial summary
judgment on the state law claims, N2 119, is granted on unjust enrichment and
promissory estoppel and otherwise denied. (The Court continues to be
bumfuzzled about the presence of the duplicative AMWA claims.)
4.

Deshotels.

After the agreed-upon dismissal of some other

defendants, N2 110, the only question left in Defendants' motion for summary
judgment, N2 97, is whether Deshotels was Plaintiffs' employer for FLSA
purposes. The question is close. The motion is denied without prejudice to
renewal at trial after the Court has seen and heard the evidence. Taking into
account all of the circumstances surrounding Deshotels's role as revealed by
thecurrentrecord,Helmertv. Butterball, LLC,2010WL 779321 at* 3 (E.D. Ark.
2010), a genuine issue of material fact exists on whether Deshotels had
enough operational control to be Plaintiffs' employer under the statute. Wirtz

v. Pure Ice Company, 322 F.2d 259, 263 (8th Cir. 1963).
Several facts cut in favor of Deshotels's employer status. He's the sole
owner and member of Arkansas Convalescent Center and Capstone. He talks

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to Deanna Prejean, the Capstone area supervisor, regularly and sometimes
daily. NQ 102-1 at 5. He has final word about the companies' budgets and
approves big purchases. He drafted the original version of the employee
handbook in 2008 and may have had a hand in later revisions. Some years
ago, he was an administrator at Capstone.
Other facts cut against employer status. Deshotels lives and works in
Texas, and has no office here in Arkansas. He doesn't hire or fire any nursinghome employees. He made no decisions about the current time-keeping
system. Some Plaintiffs have never met him and don't know who he is.
Material fact questions remain about Deshotels's role in the day-to-day
management of Capstone and the nursing home. He is two steps removed
from the facility, but appears to exercise complete control through the area
supervisor and, in turn, the facility administrator. Capacity issues need more
development: was Deshotels acting as the memberI manager of the LLCs, or
individually, or both? Given Deshotels's close ties to Capstone management,
and his hands-on work with the policies guiding much of the Plaintiffs' work,
the current record presents a triable issue on the question of Deshotels's status
as the Plaintiffs' employer. The Court is convinced that this question will

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come into sharper focus at trial. The motion for summary judgment, NQ 9 7,
is denied without prejudice.
* * *

Motion to decertify, NQ 122, denied. Motion to strike, NQ 125, partly
granted and partly denied. Motion for partial summary judgment on the state
law claims, NQ 119, granted in part and denied in part as explained. Motion
for summary judgment about Deshotels's employer status, NQ 97, denied
without prejudice. The Court will hold a pre-trial conference soon to handle
any remaining matters and discuss trial-related issues.
So Ordered.

D.P. Marshall Jr.
United States District Judge

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