Aaron et al v. Summit Health and Rehabilitation, LLC et al
Filing
249
MEMORANDUM OPINION. Signed by Honorable Susan O. Hickey on July 7, 2015. (cnn)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION
SHARON LANGSTON, et al.
PLAINTIFFS
VS.
CASE NO. 12-CV-1112
SUMMIT HEALTH AND
REHABILITATION, LLC, et al.
DEFENDANTS
MEMORANDUM OPINION
Before the Court is Defendant John Ponthie’s Motion for Summary Judgment. (ECF No.
220).
Plaintiffs have responded.
(ECF No. 237).
Ponthie has replied.
(ECF No. 244).
Defendant SA Eldercare, LLC has also filed a Motion for Summary Judgment. (ECF No. 223).
Plaintiffs have responded. (ECF No. 233). These matters are ripe for the Court’s consideration.
BACKGROUND
On December 5, 2012, Plaintiffs filed this lawsuit under §§ 207, 216(b) of the Fair Labor
Standards Act (“FLSA”) on behalf of themselves and other hourly employees claiming that
Defendants denied overtime pay in violation of the FLSA. The Court granted conditional
certification of a collective action under § 216(b) of the FLSA on March 19, 2014. (ECF No.
101). Subsequently, the Court granted Defendants’ Motion for Decertification. (ECF No. 248).
Plaintiffs allege that they are current or former hourly employees of Defendant Ponthie,
Defendant SA Eldercare, LLC, and other Defendants. Plaintiffs sued Ponthie individually in his
capacity as owner, manager, officer and/or incorporator of the nursing home facilities at which
Plaintiffs worked. They contend that he had exercised control over the conditions of Plaintiffs’
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employment by setting wages and employees’ schedules and creating and enforcing employment
policies. Ponthie denies that he was an employer under the FLSA and maintains that he did not
control any condition of employment as to any Plaintiff. He contends that he lacked the power
as an owner or officer to create and enforce employment-related policies or practices. Plaintiffs
also sued SA Eldercare, alleging that it was an employer under the FLSA. SA Eldercare
maintains that it was nothing more than a passive investor in Defendant Courtyard Health and
Rehabilitation, LLC (“Courtyard”) and lacked the power to control Courtyard or any of its
employees.
LEGAL STANDARD
The standard of review for summary judgment is well established. When a party moves
for summary judgment, “[t]he court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact, and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a); Krenik v. County of LeSueur, 47 F.3d 953 (8th Cir. 1995).
This is a “threshold inquiry of…whether there is a need for trial—whether, in other words, there
are genuine factual issues that properly can be resolved only by a finder of fact because they may
reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
250 (1986); see also Agristor Leasing v. Farrow, 826 F.2d 732 (8th Cir. 1987). A fact is
material only when its resolution affects the outcome of the case. Anderson, 477 U.S. at 248. A
dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict
for either party. Id. at 252.
DISCUSSION
The existence of an employer-employee relationship is a prerequisite to asserting a claim
under the FLSA.
29 U.S.C. § 216(b).
The plaintiff bears the burden of establishing an
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employer-employee relationship. Childress v. Ozark Delivery of Missouri L.L.C., 2015 WL
997696, at *7 (W.D. Mo. 2015). Under the FLSA, an “employer” includes “any person acting
directly or indirectly in the interest of an employer in relation to an employee.” 29 USC §
203(d). An “employee” is defined as “any individual employed by an employer.” 29 USC §
203(e)(1). Under the Department of Labor Regulations, a joint employment relationship can
exist where an employee “performs work which simultaneously benefits two or more
employers.” 29 C.F.R. § 791.2(b).
Whether an entity or an individual is a “joint employer” is a
question of law. Catani v. Chiodi, 2001 WL 920025, at *6 (D. Minn. 2001).
The Supreme Court has held that courts should consider the “economic reality” rather
than “technical concepts” when evaluating whether there is an employment relationship for
purposes of the FLSA. Goldberg v. Whitaker House Co-op., Inc., 366 U.S. 28, 33 (1961). In
determining whether an employer is a “joint employer” under the “economic realities test”,
courts consider whether the alleged employer: (1) had the power to hire and fire employees; (2)
supervised and controlled employee’s work schedules or conditions of employment; (3)
determined the rate and method of payment; and (4) maintained employment records.
Childress, 2015 WL 997696, at *7; Catani, 2001 WL 920025, at *6.
Application of the
“economic realities” test is not mechanical. Catani, 2001 WL 920025, at *3. The test assesses
“the totality of the circumstances, and not any one factor, which determines whether a worker is
the employee of a particular alleged employer.” Id. The overarching concern is whether “the
alleged employer possessed direct or indirect power to control significant aspects of the
plaintiff’s employment.” Childress, 2015 WL 997696, at *7.
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A. John Ponthie
In support of their contention that Ponthie is an employer pursuant to the FLSA, Plaintiffs
offer deposition testimony of employees stating that Ponthie is the owner of the nursing homes,
but none of the employees testified that he had supervised or disciplined them, hired or fired
them, or spoken to them about their wages or employment records. One Plaintiff testified that
when Ponthie bought the facility at which she was employed, he sat down with the employees
and discussed how the facility would be operated. Plaintiffs also reference a deposition from
November 2010, in which Ponthie acknowledged that he was managing member of the
Courtyard facility and a consultant for Summit Health, which had an administrative services
agreement with other Defendant facilities.
Standing alone, this evidence is insufficient to support a finding that Ponthie is an
“employer” under the FLSA. Plaintiffs offer no evidence of Ponthie’s operational control over
the facilities and thus over Plaintiffs.
They fail to explain what Ponthie’s role was as a
consultant to Summit Health and as managing member of Courtyard. There is no indication that
he exercised direct or indirect control over aspects of Plaintiffs’ employment. Furthermore, it is
Ponthie’s position that he was not managing member of Courtyard during the period at issue in
the present action. His position is consistent with his deposition testimony from November
2010. Plaintiffs admit that Ponthie did not hire, fire, or supervise employees at any of the
facilities.
There is no evidence that Ponthie maintained employment records, controlled
employees’ schedules, or created and enforced employment-related policies.
Therefore,
considering the totality of the circumstances, the Court finds that Defendant Ponthie was not an
employer of Plaintiffs under the FLSA.
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B. SA Eldercare, LLC
SA Eldercare maintains that it was not Plaintiffs’ employer under the FLSA. Plaintiffs
indicate that when their Complaint was originally filed, they believed in good faith that SA
Eldercare was an employer of Plaintiffs at Courtyard. However, Plaintiffs now agree that SA
Eldercare is not an employer and summary judgment should be granted in its favor.
Accordingly, the Court finds that SA Eldercare was not Plaintiffs’ employer under the FLSA.
CONCLUSION
For the reasons stated above, the Court finds that Defendant Ponthie’s Motion for
Summary Judgment (ECF No. 220) should be and hereby is GRANTED. Defendant Ponthie is
DISMISSED WITH PREJUDICE. The Court further finds that Defendant SA Eldercare’s
Motion for Summary Judgment (ECF No. 223) should be and hereby is GRANTED. Defendant
SA Eldercare is DISMISSED WITH PREJUDICE.
IT IS SO ORDERED, this 7th day of July, 2015.
/s/ Susan O. Hickey
Susan O. Hickey
United States District Judge
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