McFalls v. NCH Healthcare System, Inc. et al

Filing 82

ORDERED: Plaintiff's Motion for Reconsideration and to Amend the Complaint to Conform to the Evidence is GRANTED. The Court's prior dismissal Order (Doc. 73) is VACATED to the extent it dismisses Counts I and II with prejudice and de clines supplemental jurisdiction over the remaining state-law claims. The Clerk is DIRECTED to reopen the case and separately docket Plaintiff's Second Amended Complaint (Doc. [75-7]). Signed by Judge Sheri Polster Chappell on 8/30/2024. (AEH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
LAUREN MCFALLS, individually,
and on behalf of all others similarly
situated and the Proposed Rule 23
Class,
Plaintiff,
v.

Case No.: 2:23-cv-572-SPC-KCD

NCH HEALTHCARE SYSTEM,
INC. and NAPLES COMMUNITY
HOSPITAL, INC.,
Defendants.

/
OPINION AND ORDER

Before the Court are Plaintiff’s Motion for Reconsideration and to Amend
(Doc. 75), Defendants’ Response (Doc. 78), and Plaintiff’s Reply (Doc. 81). For
the below reasons, the Court grants the motion.
This action involves a creative FLSA claim. Plaintiff is a nurse who
worked at Defendants’ hospital and participated in Defendants’ Specialty
Fellowship Program. Defendants claim that this fellowship program helps to
train nurses transitioning to a specialty practice area. The fellowship program
agreement provided that Plaintiff would work at the hospital for two years in
exchange for her training. But the agreement imposed a $5,000 program fee if
Plaintiff left early.

Plaintiff left early and sued to challenge the fellowship program fee. She
asserted that the fellowship program violates the Fair Labor Standards Act
(FLSA), Florida Minimum Wage Act (FMWA), Florida Deceptive and Unfair
Trade Practices Act (FDUTPA), and Florida’s prohibition of restraints on
trade, Florida Statute § 542.18. (Doc. 24). Defendants successfully moved to
dismiss the claims based on the FMWA and restraint on trade theories. (Docs.
26, 49). Defendants also argued that the Court should dismiss the FLSA
claims. But, because Defendants had not asserted their FLSA arguments in
an earlier motion to dismiss, the Court noted that such arguments should be
renewed in a motion for judgment on the pleadings. (Doc. 49 at 3-4). Soon
after, Defendants answered (Doc. 50) and moved for judgment on the
pleadings (Doc. 51).
Defendants argued judgment on the pleadings is appropriate on
Plaintiff’s FLSA claims because, as alleged, Plaintiff had voluntarily entered
the fellowship program and Defendants had not reduced her wages below the
minimum wage to recover the program fee. (Doc. 51). Plaintiff disagreed
whether voluntariness and actual reduction to her wages were dispositive of
her FLSA kickback claim and did not seek leave to amend to address
Defendants’ arguments. (Doc. 55).
The Court agreed with Defendants that, based on the allegations in the
amended complaint, Plaintiff had voluntarily entered the fellowship program.
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The Court also found that, based on the amended complaint and its
attachments, Defendants had reduced her wages to account for Plaintiff’s signon bonus, not the program fee. So, the Court granted Defendants’ motion for
judgment on the pleadings, dismissed the FLSA claims with prejudice, and did
not sua sponte grant Plaintiff leave to amend her complaint. Two weeks after
the Court’s Order, Plaintiff moved for reconsideration and for leave to amend
her complaint.
A motion for reconsideration may arise under either Rule 59(e) or Rule
60(b). Generally, three grounds support reconsideration of an order: “(1) an
intervening change in controlling law; (2) the availability of new evidence; and
(3) the need to correct clear error or manifest injustice.” McGuire v. Ryland
Grp., Inc., 497 F. Supp. 2d 1356, 1358 (M.D. Fla. 2007) (citation omitted). The
availability of new evidence justifies reconsideration when “(1) the evidence
was freshly discovered since the judgment was entered; (2) the moving party
exercised due diligence to discover the new evidence; (3) the evidence is not
simply cumulative or impeaching; (4) the evidence is material; and (5) the
evidence is such that is likely to produce a new outcome if the case were
reconsidered.” In re Gregory, No. 22-12608, 2024 WL 3771044, at *4 (11th Cir.
Aug. 13, 2024) (citation omitted).
Additionally, “a plaintiff may move for relief under Rule 59(e) by asking
the district court to vacate its judgment based on proposed amendments.”
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Sheffler v. Americold Realty Tr., No. 22-11789, 2023 WL 3918491, at *2 (11th
Cir. June 9, 2023). Post-dismissal amendments are governed by the typical
Rule 15 and Rule 16 standards. Id.
Plaintiff argues that she has new evidence to show that she did not
voluntarily participate in the fellowship program and that Defendants reduced
her wages to recover part of the fellowship program fee.

Regarding

voluntariness, Defendants admitted that any nurse hired in a specialty
practice area who does not have at least one year of experience in that specialty
area must participate in the fellowship program. (Doc. 75-2 at 4). A recruiter
for Defendants confirmed this policy (Doc. 75-6 at 4). Defendants’ recruiter
also stated that if a nurse declines to enter the fellowship program after
receiving a job offer, that nurse cannot enter the job. (Doc. 75-6 at 3-6). And
one of Defendants’ corporate designees also described the fellowship program
as “mandatory training.” (Doc. 75-5 at 4). Plaintiff claims that she had only
a “few months” of emergency department experience before joining that
specialty area at Defendants’ hospital and was required to enter the program.
(Doc. 75-3 at 3).
Regarding the reduction to Plaintiff’s wages, another corporate designee
testified that Defendants do not distinguish between sign-on bonus debt and
fellowship program fee debt when attempting to collect monies owed. (Doc. 754 at 4).
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Plaintiff obtained Defendants’ response to her requests for admission
only two weeks before the Court’s Order dismissing her claims. And she
obtained deposition transcripts the day before and the day after the Court’s
Order. Given this new evidence, Plaintiff requests that the Court reconsider
its dismissal with prejudice and instead dismiss her amended complaint
without prejudice and grant her leave to amend. (Doc. 75).
Defendants oppose Plaintiff’s motion on essentially three grounds. First,
Defendants argue that reconsideration is inappropriate because the Court did
not commit clear error or cause manifest injustice. The Court agrees that the
Order granting judgment on the pleadings was neither clear error nor manifest
injustice. And Plaintiff does frame her argument in these terms. (Doc. 75 at
8-9). But the gravamen of Plaintiff’s argument is that the availability of new
evidence, not these other grounds, support reconsideration. And Plaintiff’s
argument that new evidence supports reconsideration is well taken, especially
in light of her request to amend. Plaintiff exercised due diligence to discover
this new evidence.

The evidence is not cumulative or impeaching.

The

evidence is material in that it supports Plaintiff’s allegations in her proposed
amendment that Defendants required her to enter the fellowship program and

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reduced her wages to pay for the fellowship program fee. 1 And the evidence
would have likely produced a different outcome. If Plaintiff had this evidence
in hand earlier, she could have moved to amend and resolved both grounds
raised in the motion for judgment on the pleadings. At the very least, she likely
would have persuaded the Court to dismiss her complaint without prejudice,
rather than with prejudice.
Second, Defendants argue Plaintiff is not entitled to amend her
complaint because she failed to seek amendment earlier and the Court’s
December 2023 deadline to amend has passed. It is true that the Court was
not required to sua sponte allow amendment in its judgment on the pleadings
order. Plaintiff never asked for that relief, and the law does not require the
Court to read minds. See Hagan v. Comm’r, Georgia Dep’t of Corr., No. 2212180, 2023 WL 5621895, at *6 (11th Cir. Aug. 31, 2023) (“[O]ur precedent is
clear that a district court is not required to grant a plaintiff leave to amend her
complaint sua sponte when the plaintiff, who is represented by counsel, never
filed a motion to amend nor requested leave to amend before the district court.)
(cleaned up). But it is also true that a Plaintiff may move to amend postdismissal, as Plaintiff has done here. See Scheffler, 2023 WL 3918491, at *2.

The cited evidence is enough to support reconsideration and amendment, but the Court does
not express any opinion about whether this evidence would be sufficient at the summaryjudgment stage.
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While the timing of Plaintiff’ request to amend is not ideal, the Court
does not find it problematic. This case presented a unique procedural posture.
Because the Court could not address Defendants’ FLSA arguments at the
motion-to-dismiss stage, instead requiring Defendants to move for judgment
on the pleadings, Plaintiff never got the benefit of the Court’s ruling before
requesting amendment. Meanwhile, Plaintiff acted diligently in obtaining the
relevant discovery. She obtained the discovery months before the discovery
deadline, properly proceeding through discovery while the motion for judgment
on the pleadings was pending. And Plaintiff quickly moved to amend after
obtaining that discovery.

Given the posture of the case and Plaintiff’s

diligence, the Court finds good cause to allow the amendment after the Court’s
deadline.
Third, Defendants argue that amendment would be futile. According to
Defendants, even if the reduction to Plaintiff’s final paycheck went toward the
fellowship program fee, they still paid her minimum wage and she cannot state
a wage claim.
Plaintiff responds that the $1,375.81 pay reduction—treated as a lump
sum and applied to her final work week—reduced her wages below the
minimum wage. Plaintiff also argues that an employer must reimburse an
employee “during the workweek in which the expense arose” and that this
includes “de facto” expenses regardless of whether the employer in fact
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deducted the expense from the employee’s wages. See Arriaga v. Fla. Pac.
Farms, L.L.C., 305 F.3d 1228, 1237 (11th Cir. 2002). According to Plaintiff,
the fellowship program fee arose during her final work week and that debt
should be treated as a $5,000 expense offsetting her pay. At the pleading stage,
Defendants have not provided a sufficient basis to reject these theories. The
Court does not find amendment would be futile.
Accordingly, it is now
ORDERED:
1. Plaintiff’s Motion for Reconsideration and to Amend the Complaint to
Conform to the Evidence is GRANTED.
2. The Court’s prior dismissal Order (Doc. 73) is VACATED to the
extent it dismisses Counts I and II with prejudice and declines
supplemental jurisdiction over the remaining state-law claims.
3. The Clerk is DIRECTED to reopen the case and separately docket
Plaintiff’s Second Amended Complaint (Doc. 75-7).
DONE and ORDERED in Fort Myers, Florida on August 30, 2024.

Copies: All Parties of Record

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