Boles v. Spanish Oaks Hospice, Inc
Filing
26
ORDER granting re 19 Motion to Amend re 1 Complaint; denying as moot 25 Motion to Stay; granting joint MOTION for an Extension of the Case Deadlines. The Court thus extends the deadline for the parties to submit a joint status report within 1 4 days, and the deadline for Spanish Oaks to furnish an expert witness report within 30 days. Discovery will close 90 days from this Order. Civil motions deadline is thirty days after discovery closes. Signed by Magistrate Judge G. R. Smith on 5/19/17. (loh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
MALESHA BOLES,
)
)
Plaintiff,
v.
CV416-323
SPANISH OAKS HOSPICE, INC.,
Defendant.
ORDER
Plaintiff Malesha Boles moves the Court for leave to amend her
Family and Medical Leave Act (FMLA) interference and retaliation
Complaint. Doc. 19. She concedes that the current defendant, Spanish
Oaks Hospice, Inc., does not appear have sufficient employees to trigger
FMLA coverage. 1 Id. at 2. She thus wants to add five additional
defendants, Spanish Oaks Retreat, Inc., Spanish Oaks Foundation, Inc.,
Spanish Oaks Properties, LLC, Spanish Oaks of Bellville, LLC, and
Spanish Oaks of Bellville Properties, LLC (collectively the “Spanish Oaks
entities”). Boles contends that they are her “joint” or “integrated”
1
Only employers with over 50 employees are subject to the FMLA. 29 U.S.C. §
2611(4)(A)(i).
employers, so their employees should count towards the FMLA
minimum. Id. at 2-3; doc. 19-1 at 1. She also seeks to “clarify” her claim
against Spanish Oaks to allege that she detrimentally relied on its
“representation that the conditions and benefits of her employment
included application of the FMLA.” Doc . 19 at 3. Spanish Oaks opposes
on futility grounds. Doc. 22.
The Federal Rules instruct courts, before the Scheduling Order’s
deadline, to “freely give leave [to amend a pleading] when justice so
requires.” Fed. R. Civ. P. 15(a)(2). That standard embodies a preference
for resolving claims on their merits. See, e.g., Foman v. Davis , 371 U.S.
178, 182 (1962) (“If the underlying facts or circumstances relied upon by
a plaintiff may be a proper subject of relief, he ought to be afforded an
opportunity to test his claim on the merits.” (emphasis added)). Leave to
amend may nevertheless be denied where the amendment is futile; that
is “when the claim, as amended would still be subject to dismissal.” Boyd
v. Warden, Holman Corr. Facility , ___ F.3d ___, 2017 WL 1856071 at * 5
(11th Cir. May 9, 2017) (citing Burger King Corp. v. Weaver , 169 F.3d
1310, 1320 (11th Cir. 1999)).
2
I. ADDITIONAL DEFENDANTS
The FMLA defines “employer” as any person “who employs 50 or
more employees” for a sufficient time period. 29 U.S.C. § 2611(4)(A)(i).
Federal regulations, however, permit the aggregation of employees of
separate entities, for purposes of satisfying the FMLA minimum, if the
entities constitute “joint” or “integrated” employers.
See 29 C.F.R. §
825.104(c); see also, e.g., Morrison v. Magic Carpet Aviation , 383 F.3d
1253, 1257-58 (11th Cir. 2004); Cruz-Lovo v. Ryder Sys., Inc. , 298 F.
Supp. 2d 1248, 1252 (S.D. Fla. 2003) (“The regulations interpreting the
FMLA provide two theories under which multiple entities can be deemed
the ‘employer’ of an employee: the ‘integrated employer’ theory and the
‘joint employment’ theory.”). Boles contends that the Spanish Oaks
entities are either her joint employers or are integrated with Spanish
Oaks.
The regulations implementing the FMLA establish that several
entities may be an employee’s joint employers if: (1) they share the
employee’s services; (2) “[w]here one employer acts directly or indirectly
in the interests of the other employer in relation to the employee; or, (3)
[w]here the employers formatting [sic] may be deemed to share control of
3
the employee, directly or indirectly, because one employer controls, is
controlled by, or is under common control with the other employer.”
Morrison , 383 F.3d at 1257-8 (quoting former 29 C.F.R. § 825.106(a) 2).
Similarly, several entities are “integrated,” such that they count as a
single FMLA “employer,” “where [the allegedly integrated entities] have
‘(i) Common management; (ii) Interrelation between operations; (iii)
Centralized control of labor relations; and (iv) [A] [d]egree of common
ownership/financial control.’”
Id. at 1257 (quoting 29 C.F.R. §
825.104(c)(2) (alterations in original)).
Spanish Oaks contends that Boles’ proposed amendment is futile
because she pleads both theories in “a single paragraph” containing only
“boilerplate, conclusory statement[s] unsupported by factual allegations
2
The current version of 29 C.F.R § 825.106(a) has been restyled. It states, in
relevant part, that:
a joint employment relationship generally will be considered to exist in
situations such as:
(1)
(2)
(3)
Where there is an arrangement between employers to share an
employee’s services or to interchange employees;
Where one employer acts directly or indirectly in the interest of the
other employer in relation to the employee; or
Where the employers are not completely dissociated with respect to
the employee’s employment and may be deemed to share control of
the employee, directly or indirectly because one employer controls,
is controlled by, or is under common control with the other
employer.
Id.
4
elsewhere in the Proposed Amended Complaint.” Doc. 22 at 8. However,
Spanish Oaks fails to identify all of plaintiff’s supporting allegations. 3
She defines “Spanish Oaks” to include all of the Spanish Oaks entities,
see id. at 1, so several of her allegations provide factual details that
Spanish Oaks has claimed was lacking. For example, Boles identifies
Kandi Lanier as “Executive Director of Spanish Oaks,” id . ¶ 19, and that
Mike Johnson performs “payroll and human resources functions” for the
Spanish Oaks entities. Id. ¶ 28. Those assertions plausibly allege the
common control and operation supporting the joint and integrated
employer theories. 4 See, e.g., U.S. Capital Funding VI, Ltd. v. Patterson
3
It’s not clear that Spanish Oaks characterization of the identified paragraph as
“conclusory” is accurate. The distinction between factual allegations and conclusions
is not always obvious. Cf. United States v. New York Great Atlantic & Pacific Tea
Co. , 137 F.2d 459, 463 (5th Cir. 1943) (noting, in analyzing an anti-trust indictment,
“the line between what is a statement of fact and what is a conclusion is not so
broadly and easily drawn as that he who runs may read. Indeed, as the cases and
text books amply show, it is sometimes quite finely drawn.”). Here Boles alleges that
the Spanish Oaks entities “share: . . . control of management of the corporations by
the same individual, . . . a common business premises, . . . common ownership by a
single individual, . . . the same medical license, . . . common employees, . . . common
computers and other equipment, and . . . marketing endeavors, including without
limitation a common Website.” Doc. 19-1, ¶ 8. That’s more fact than conclusion.
Since Boles’ proposed amendment is not futile, that hair doesn’t need splitting today.
4
Defendant also argues that Boles must pass the “economic realities” test. See doc.
22 at 8. Boles replies that the test, most commonly applied to claims under the Fair
Labor Standards Act (FLSA), is irrelevant in the FMLA context, without citing
authority that it does not apply. Doc. 24 at 7-8. Although Spanish Oaks only cites an
FLSA case in its brief discussion of the economic realities test, see doc. 22 at 8 (citing
Layton v. DHL Express (USA), Inc. , 686 F.3d 1172 (11th Cir. 2012) (affirming
5
Bankshares, Inc. , 137 F. Supp. 3d 1340, 1356 (S.D. Ga. 2015) (“While a
summary judgment in FLSA suit based on application of the economic realities test)),
there is authority, albeit not entirely clear, supporting its application in the FMLA
context.
The Eleventh Circuit has noted that “the FMLA’s definition of ‘employer’ . . . is
materially identical with[] the definition of ‘employer’ used in the Fair Labor
Standards Act. . . .” Wascura v. Carver, 169 F.3d 683, 685-86 (11th Cir. 1999). The
court has subsequently cited Wascura in support of applying the economic reality test
outside the FLSA context; stating “[g]iven the substantial similarity between the
definitions of ‘employer’ in the [Employee Polygraph Protection Act (EPPA)] and in
the FMLA and the FLSA, we find the economic reality test appropriate [in the EPPA
context] as well.” Watson v. Drummond Co., Inc. , 436 F.3d 1310, 1316 (11th Cir.
2006). Courts outside this Circuit have expressly applied the test to the FMLA. See
Graziadio v. Culinary Institute of Am. , 817 F.3d 415, 422 (2nd Cir. 2016) (citing
Wascura, Third and Fifth Circuit, and district court cases, concluding “[w]e agree
with these courts and apply the economic-reality test used to analyze individual
liability in the FLSA to the FMLA case before us.”); but see Alexander v. Avera St.
Luke’s Hosp. , 768 F.3d 756, 763-64 (8th Cir. 2014) (concluding that “simply applying
to [plaintiff’s] FMLA claim an ‘economic realities’ test developed in cases that
involved FLSA minimum wage or maximum hour claims is not appropriate.”).
Finally, the context of Wascura and Graziadio is sufficiently different -- involving
questions of whether specific individuals are subject to FMLA liability -- that it’s not
obvious that their reasoning applies in identifying joint or integrated employers. See
Wascura , 169 F.3d at 687 (holding “that a public official sued in his or her individual
capacity is not an ‘employer’ under the FMLA . . .”); Graziadio, 817 F.3d at 422; see
also Cruz-Lovo , 298 F. Supp. 2d at 1252-55 (applying the FLSA multi-factor test in
evaluating joint, but not integrated, employment).
Even if the FMLA-application of the test were clear, it is not clear that it could
resolve the question before the Court. As Spanish Oaks points out, the multi-factor
economic reality test is “fact intensive.” Doc. 22 at 8. Although it certainly applies at
the motion to dismiss stage, see Freemen v. Key Largo Volunteer Fire & Rescue Dept.,
Inc. , 494 F. App’x 940, 943 (11th Cir. 2012) (citing Brouwer v. Metro. Dade Cty. , 139
F.3d 817, 818-19 (11th Cir. 1998), making that determination in the FLSA context,
“is an issue that is more appropriately decided at the summary judgment stage or
trial.” Dobbins v. Scriptfleet, Inc. , 2012 WL 601145 at * 2-3 (M.D. Fla. Feb. 23, 2012).
Spanish Oaks asserts that “it has provided every bit of evidence to Plaintiff’s counsel
demonstrating the futility of this lawsuit,” and “if discovery were to be conducted on
these issues, it would demonstrate the lack of factual support,” for the joint or
integrated employer theories. Doc. 22 at 9. If that’s right, then the Court will be
able to resolve all of Boles’ claims on summary judgment, when the Court will have
the benefit of a factual record and more substantial argument on the legal question.
6
complaint need not contain detailed factual allegations,” it must contain
sufficient facts to plausibly imply defendant’s liability).
Plaintiff’s reply brief puts additional factual meat on her proposed
amendment’s bones. See, generally, doc. 24 (identifying alleged common
owner of the Spanish Oaks entities, providing internet address for
alleged common website, and alleging several entities share common
phone number). Accordingly, the Court grants Boles leave to amend her
Complaint to allege that the Spanish Oaks entities were her joint
employers or were integrated, for purposes of determining whether
Spanish Oaks was a covered “employer.”
II. ESTOPPEL
Boles also argues that Spanish Oaks is estopped to deny FMLA
coverage. As the parties concede, the Eleventh Circuit has twice
commented on, without deciding, whether equitable estoppel applies to
FMLA coverage. See Dawkins v. Fulton Cty. Gov ’t , 733 F.3d 1084, 1089
(11th Cir. 2013) (noting that the Eleventh Circuit has “never decided
that equitable estoppel can extend FMLA coverage to otherwise
uncovered absences from work”); Cowman v. Northland Hearing Ctrs.,
Inc. , 628 F. App’x 669, (11th Cir. 2015) (citing Dawkins , 733 F.3d at
7
1089) (“We have not determined whether the doctrine of equitable
estoppel applies as a matter of federal common law in the FMLA
context.”); doc. 19 at 5; doc. 22 at 4. It has not, however, suggested that
equitable estoppel could not apply, given appropriate factual support.
See Caporicci v. Chipotle Mexican Grill, Inc. , 189 F. Supp. 3d 1314, 1321
(M.D. Fla. 2016) (explaining that the Eleventh Circuit “has found it
unnecessary to decide [whether equitable estoppel applies] when the
plaintiff fails to establish an essential element of an equitable-estoppel
claim.”); see also Cowman , 628 F. App’x at 672 (“Assuming that federal
common law equitable estoppel applies to FMLA claims,” plaintiff failed
to establish essential element for estoppel). Further, “[a]ll of the other
circuits to address the issue have concluded that the equitable estoppel
doctrine applies in FMLA employment discrimination cases where its
elements are met.” Dawkins , 733 F.3d at 1092 (Wilson, J. dissenting)
(citing Second, Fifth, Sixth, and Eighth Circuit precedent). And since
Dawkins , other Circuits have concurred.
See Palan v. Inovio Pharms.
Inc. , 653 F. App’x 97, 100 n. 5 (3d Cir. 2016) (listing Courts of Appeal
recognizing application of equitable estoppel in the FMLA context,
including the Sixth, Ninth, First, Fifth, Eighth, Second, and, albeit in
8
dicta, Seventh Circuits). Balanced against that persuasive authority, is
the danger that applying the doctrine “would expand FMLA liability
beyond the express terms of the statute.”
Rodas v. Assurance Quality
Grp., Inc. , 2015 WL 11511578 at * 5 (N.D. Ga. Jan. 30, 2015).
Given the competing authority, the Court is inclined to grant Boles
leave to plead her claim, if only to allow the parties’ arguments to
develop more fully. Spanish Oaks argues that, even if equitable estoppel
were available, Boles has failed to plead that it “was aware of the fact
that Plaintiff was not an eligible employee under the FMLA at the time
she took leave.” Doc. 22 at 7. Such a failure would preclude an equitable
estoppel claim, and allow the Court to follow the Eleventh Circuit’s
example in resolving the issue on factual, rather than legal, grounds.
But the assertion is questionable, given the factual context of the
dispute. Spanish Oaks is contending that Boles is not an eligible
employee because it didn’t have enough employees to qualify as FMLAcovered employer. Id. at 2. In effect Spanish Oaks argues that Boles’
failure to plead that it was aware of the number of employees it employed
is fatal to her estoppel claim. That’s an odd argument, to say the least.
Given the unusual posture of the estoppel question, the Court is
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persuaded by the general preference to allow claims to be disposed on
their merits. It therefore grants Boles leave to amend her Complaint to
allege that Spanish Oaks is equitably estopped from contending that she
is not FMLA eligible. In doing so, however, the Court does not suggest
that her claim could not be subject to a more fully developed motion to
dismiss. The Court finds only that Spanish Oaks has not demonstrated
that such a claim is futile.
III. CONCLUSION
The Court GRANTS plaintiff Malesha Boles’ Motion to Amend
(doc. 19) and thus DENIES as moot the parties’ joint motion for a stay
pending resolution of her amend motion. Doc. 25. The Court GRANTS
the parties’ joint request for an extension of the case deadlines. Doc. 25.
The Court thus extends the deadline for the parties to submit a joint
status report by fourteen days (until June 5, 2017), and the deadline for
Spanish Oaks to furnish an expert report for thirty days (until July 6,
2017). Discovery will close 90 days from the date of this Order. The civil
motions deadline is 30 days after discovery closes.
SO ORDERED , this 19th day of May, 2017.
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•:-/
UNITED STATES MAGISTRATE RIDGE
SOUTHERN DISTRICT OF GEORGIA
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