AFFO et al v. GRANITE BAY CARE INC et al

Filing 87

DECISION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT AND FOR PARTIAL SUMMARY JUDGMENT - granting in part and denying in part 56 Motion for Summary Judgment; granting in part and denying in part 58 Motion for Summary Judgment; denying 63 Motion for Summary Judgment. By JUDGE D. BROCK HORNBY. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
KAYI AFFO,

ET AL.,

PLAINTIFFS
v.
GRANITE BAY CARE, INC.,
ET AL.,
DEFENDANTS

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CIVIL NO. 2:11-CV-482-DBH
CONSOLIDATED WITH
CIVIL NO. 2:12-CV-115-DBH

DECISION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT
AND FOR PARTIAL SUMMARY JUDGMENT
The plaintiffs provided care in Maine to clients of Granite Bay Care, Inc.
(“Granite Bay Care”) with disabilities. They did so under two job titles―Adult
Foster Care Provider (“Provider”) and Direct Support Professional.1 They have
sued Granite Bay Care, a second corporation, and Granite Bay Care’s corporate
officers and shareholders for unpaid wages and overtime through 2011 under
Maine and federal law, on the basis that they worked over 40 hours per week.2
The two officers/shareholders and the second corporation have moved for
summary judgment on all claims on the basis that they were not the plaintiffs’
The latter job title changed over the years (e.g., Direct Service Provider and DSP). Stipulated
Facts ¶ 3 (ECF No. 53). I will use the title in text.
2 On the defendants’ request and without objection, I consolidated case 2:12-cv-115-DBH with
2:11-cv-482-DBH. See Order (ECF No. 18). The claims in both cases are essentially the same.
Both cases have a claim under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b)
(unpaid wages) (Count I), and under Maine law, 26 M.R.S.A. §§ 664 (minimum wage and
overtime) and § 670 (employee remedies) (Count II). In case 2:11-cv-482-DBH, Kayi Affo also
has a claim based on a specific demand she made of Granite Bay Care for payment of wages
earned during employment, 26 M.R.S.A. § 626 (former employees can seek unpaid wages after
demand of payment) (Count III).
1

“employers” under either federal or state law; the plaintiffs have moved for
summary judgment on the proposition that both corporations were employers.3
I grant the second corporation’s motion on all claims and deny the plaintiffs’
motion. I grant the individual defendants’ motion on the state claim, but deny
it on the federal claim. Both corporations and the two individual defendants
also have moved for summary judgment on the federal claim, on the basis that
they relied in good faith on a Department of Labor ruling or interpretation. I
deny that motion. The plaintiffs have moved for summary judgment on their
state law claim against all the defendants.

I grant that motion as against

Granite Bay Care.
The triable issues remaining are liability on the federal claim, whether
the individuals can be treated as employers under federal law, and damages.
UNDISPUTED FACTS GENERALLY4
At all relevant times, Granite Bay Care was a for-profit business that
provided residential services for persons with mental disabilities.

Stipulated

Facts ¶¶ 38, 40, 43 (ECF No. 53). Kasai Mumpini and Caroletta Alicea were its
only shareholders and corporate officers.

Defs.’ Statement of Material Facts

Although the plaintiffs state their belief that the undisputed facts “are enough for the Court to
conclude that as a matter of law” the two individuals were the plaintiffs’ employers, Pls.’ Br. in
Opp’n to Defs.’ Mot. for Summ. J. at 6 (ECF No. 67), they have not made a motion to that end
and the plaintiffs subsequently state in the same brief that there is a “basis to conclude that
there is a genuine dispute of material fact” as to whether the individuals were employers, id. at
7. Given the ambiguity of these statements, and given that the plaintiffs explicitly request
summary judgment on the question of whether the other corporation was their employer, id. at
10, I do not treat them as having moved for summary judgment against the individual
defendants.
4 I will recount additional undisputed facts that are pertinent to a particular motion when I
deal with that motion. Where there is a dispute, I view the disputed fact in the light favorable
to the nonmoving party.
3

2

(“DSMF I”) ¶ 5 (ECF No. 62); Pls.’ Statement of Material Facts in Opp’n to Defs.’
Statement of Material Facts (“Pls.’ Resp. I”) ¶ 5 (ECF No. 68).

Granite Bay

Care’s purpose was “to assist individuals with disabilities to realize their
fundamental right to obtain their goals and enhance their quality of life.”
Stipulated Facts ¶ 38. Granite Bay Care provided care and support by setting
up private homes for the disabled individuals. Stipulated Facts ¶ 17. To carry
out its purpose, Granite Bay Care engaged various categories of personnel—
among them, Adult Foster Care Providers, Direct Support Professionals, and
Respite Workers. Stipulated Facts ¶ 41.
Granite Bay Connections, Inc., was a nonprofit entity that provided
comparable services in New Hampshire. DSMF I ¶ 11; Pls.’ Resp. I ¶ 11. (To
distinguish it from Granite Bay Care, I will refer to it as “Granite Bay New
Hampshire.”)

Mumpini and Alicea were also officers and directors of that

nonprofit corporation. Id.
Granite Bay Care compensated Providers by a stipend. Stipulated Facts
¶ 5. The Provider contracts required that the Providers be responsible for the
care of the disabled client twenty-four hours per day, five days per week
between Sunday at 4:00 p.m. and Friday at 4:00 p.m. Stipulated Facts ¶¶ 2,
34. Granite Bay Care provided “Respite Workers” for the remaining period of
time (between Friday at 4:00 p.m. and Sunday at 4:00 p.m.) unless the
Provider remained in the home with the client over the weekend. Stipulated
Facts ¶ 4.

The Direct Support Professionals, on the other hand, worked

Mondays to Fridays, 8 a.m. to 4 p.m., and Granite Bay Care paid them by the
3

hour. Stipulated Facts ¶¶ 3, 7. Granite Bay Care did not require Providers to
work as Direct Support Professionals, but gave them the option to do so.
Stipulated Facts ¶ 3. These plaintiffs served in both roles. Stipulated Facts
¶ 33.
ANALYSIS
In Part I, I deal with the argument of some defendants that they cannot
be liable because they were not the plaintiffs’ employer. In Part II, I determine
whether the defendants have an affirmative good faith defense to federal
liability. In Part III, I deal with whether the plaintiffs have established liability
on their state law claim.
I.

Were Mumpini, Alicea, and Granite Bay New Hampshire Employers and
Therefore Liable Under Federal or State Law?
A.

The Individuals Kasai Mumpini and Caroletta Alicea
(1)

Federal Fair Labor Standards Act (“FLSA”) Claim

To establish liability on their FLSA claim, the plaintiffs must show that a
particular defendant that they are suing is their employer. 29 U.S.C. § 207.
The FLSA defines “employer” as “any person acting directly or indirectly in the
interest of an employer in relation to an employee.” 29 U.S.C. § 203(d).
The First Circuit has observed that “[t]aken literally this [section 203(d)
definitional] language would support liability against any agent or employee
with supervisory power over other employees.” Donovan v. Agnew, 712 F.2d
1509, 1510 (1st Cir. 1983). But the First Circuit also said that it would not
lightly infer that the conventional corporate shield to personal liability should
be disregarded, and that it was “difficult to accept . . . that Congress intended
4

that any corporate officer or other employee with ultimate operational control
over payroll matters be personally liable . . . .” Id. at 1513. Instead, Agnew
adopted an “economic reality” approach to who is an employer under the FLSA.
Id. at 1514.

Agnew found FLSA liability for “corporate officers with a

significant ownership interest who had operational control of significant
aspects of the corporation’s day to day functions, including compensation of
employees, and who personally made decisions to continue operations despite
financial adversity during the period of nonpayment.”

Id. (citation omitted).

Baystate Alt. Staffing, Inc. v. Herman, 163 F.3d 668, 677 (1st Cir. 1998),
confirmed the Agnew approach. Baystate said that the facts in Agnew “relevant
to the personal liability determination” were (1) “the significant ownership
interest of the corporate officers”; (2) “their operational control of significant
aspects of the corporation’s day to day functions, including compensation of
employees”;5 and (3) “the fact that they personally made decisions to continue
operating the business despite financial adversity and the company’s inability
to fulfill its statutory obligations to its employees.” Id. at 677-78. The First
Circuit continued this approach once again in Chao v. Hotel Oasis, Inc., 493
F.3d 26 (1st Cir. 2007).

One of the officers was “personally responsible for allowing the company’s workers’
compensation insurance to lapse . . ., and he personally took responsibility for making banking
arrangements when informed that the company’s payroll account could not cover its weekly
payroll”; the other “personally supervised the company’s cash flow, was personally involved in
decisions about layoffs and employee overtime hours, and met frequently with the union
president about the company’s failure to make payments to the employees’ pension plan,
health insurance plan, and workers’ compensation program.” Baystate, 163 F.3d at 677-78
n.12.
5

5

Agnew makes ownership a factor, but does not specify how important it
is. Other circuits say that alone it is not enough and that neither ownership
nor ultimate authority is determinative.
Orlando

Kennel

Club,

Inc.,

515

See, e.g., Alvarez Perez v. Sanford-

F.3d

1150,

1161

(11th

Cir.

2008)

(president/majority shareholder not an employer because he was not involved
in the supervision, hiring, firing, or compensation of employees; even if
president could have played a greater role in day-to-day operations,
“unexercised authority is insufficient to establish liability as an employer”
(citation omitted)); Patel v. Wargo, 803 F.2d 632, 638 (11th Cir. 1986)
(president/majority shareholder not “involved in the day-to-day operation of
the facility,” regardless of whether he “might have played a greater role” given
his status as president); Wirtz v. Pure Ice Co., 322 F.2d 259, 262-63 (6th Cir.
1963) (“There is little question from the record but what Thompson as the
majority stockholder and dominant personality in Pure Ice Company, Inc.,
could have taken over and supervised the relationship between the corporation
and its employees had he decided to do so. A careful reading of the record,
however, indicates that he did not do so.”).
On the control factor, Agnew and its progeny focus on the day-to-day
operational control that corporate officers directly and personally exercise (as
opposed to ultimate operational control that a president/CEO routinely has by
virtue of the office).

See, e.g., Agnew, 712 F.2d at 1511, 1514 (“directly

involved in decisions affecting employee compensation”; “operational control of
significant aspects of the corporation’s day to day functions”); Baystate, 163
6

F.3d at 678 (“authority to manage certain aspects of the business’s operations
on a day-to-day basis”; “personal responsibility for making decisions about the
conduct of the business that contributed to the violations of the Act”); Hotel
Oasis, 493 F.3d at 34 (“corporate officer principally in charge of directing
employment practices”); see also Alvarez Perez, 515 F.3d at 1160 (“[I]n order to
qualify as an employer for this purpose, an officer ‘must either be involved in
the day-to-day operation or have some direct responsibility for the supervision
of the employee.’” (quoting Patel, 803 F.2d at 638)); Wirtz, 322 F.2d at 263
(“That he might have taken over and acted . . . in the interest of an employer
(the corporation) in relation to an employee’ is beside the point as long as he
did not do so.”).
On the third factor, the First Circuit concerns itself with who was
“instrumental in ‘causing’ the corporation to violate the FLSA.” Hotel Oasis,
493 F.3d at 34 (citations omitted); see also Baystate, 163 F.3d at 678 (“the
personal responsibility for making decisions about the conduct of the business
that contributed to the violations of the Act”); Agnew, 712 F.2d at 1514 (“who
personally made decisions to continue operations despite financial adversity
during the period of nonpayment” (citation omitted)).
I now address each of these three factors in turn, recounting the
undisputed facts relevant to each of the legal principles.
(i)

Ownership

This factor requires relatively little discussion. Mumpini and Alicea were
Granite Bay Care’s sole shareholders and corporate officers. DSMF I ¶ 5; Pls.’
7

Resp. I ¶ 5. Although the cases discussed above indicate that mere ownership
status alone does not suffice to establish personal liability as an employer, this
factor nevertheless militates toward a finding of personal liability.
(ii)

Day-to-Day Operational Control

Mumpini and Alicea employed a State Director for Granite Bay Care.
Pls.’ Additional Statement of Material Facts (“PASMF I”) ¶ 2 (ECF No. 68); Defs.’
Resp. to Pls.’ Additional Statement of Material Facts (“Defs.’ Resp. I”) ¶ 2 (ECF
No. 84). The State Director answered only to Mumpini and Alicea. PASMF I
¶ 1; Defs.’ Resp. I ¶ 1. He had authority to manage all aspects of Granite Bay
Care’s business, including personnel and compensation decisions, subject to
Mumpini’s and Alicea’s advice and consent. DSMF I ¶ 6; Pls.’ Resp. I ¶ 6. He
made all operational and managerial decisions involving Granite Bay Care’s
daily operations. DSMF I ¶ 9; Pls.’ Resp. I ¶ 9.6 He kept Mumpini and Alicea
informed of the daily management of Maine operations, relaying that
information through daily e-mails and communications, as well as at in-person
meetings each Monday, and at monthly director and executive management
meetings at which he informed Mumpini and Alicea of staff hiring and firing
decisions. PASMF I ¶¶ 5, 38; Defs.’ Resp. I ¶¶ 5, 38. He forwarded to them
The plaintiffs deny this assertion, stating that the State Director acted with Mumpini’s and
Alicea’s advice and consent, that the sole persons to whom he answered were Mumpini and
Alicea, and that Mumpini and Alicea had the full right to exercise their authority as to
compensation of Granite Bay Care staff. Pls.’ Resp. I ¶ 9. I accept the advice and consent
qualification, but it does not contradict the State Director’s testimony as to his general role.
The fact that he answered ultimately to Mumpini and Alicea, on which the parties agree, does
not diminish his responsibility for daily operational decisions. Finally, although Alicea testified
that she believed that she and Mumpini had authority over compensation decisions, she
proceeded to clarify that that decision-making authority was ceded to the State Director.
Caroletta Alicea Dep. Sept. 12, 2012 (“Alicea Dep. II”) 35:21-37:3 (ECF No. 62-4). The
plaintiffs’ complete denial is therefore unsupported by the record.
6

8

everything that he ever did. PASMF I ¶ 8; Defs.’ Resp. I ¶ 8. He informed them
of the details of state funding, staff compensation models, and changes that he
had proposed in Medicaid funding requests to the State of Maine, as well as the
financial impact of certain issues, responding on at least one occasion to a
request for financial information. PASMF I ¶ 9; Defs.’ Resp. I ¶ 9.
Mumpini periodically issued memoranda to Granite Bay Care staff with
respect to mandated reporting obligations, disaster protocols, professional
attire, and change from bimonthly to monthly payment of stipends. PASMF I
¶ 19; Defs.’ Resp. I ¶ 19. The State Director initiated and prepared certain of
the communications issued in Mumpini’s name.
¶ 38.

DSMF I ¶ 38; Pls.’ Resp. I

He, rather than Alicea or Mumpini, dealt with Granite Bay Care’s

attorney on issues regarding compensation and the Department of Labor.
DSMF I ¶ 35; Pls.’ Resp. I ¶ 35. Mumpini never reviewed agendas for Granite
Bay Care’s executive management meetings because he did not run the
meetings. DSMF I ¶ 41; Pls.’ Resp. I ¶ 41.
I conclude that this Agnew factor favors the defendants. Although there
was an approval structure in place by which Mumpini and Alicea could
monitor the company’s finances, although Mumpini held the ultimate authority
inherent to his position as president and CEO, and although the State Director
kept them fully informed, the plaintiffs have failed to establish that the owners
exercised daily operational control or were directly and personally involved in

9

day-to-day compensation decisions.7 Mumpini, Alicea, and the State Director
himself all testified that the State Director had full authority over the
company’s day-to-day operations, including employment and compensation
matters, and that Mumpini and Alicea were not involved in those decisions.
Although the State Director met with Mumpini and Alicea in monthly executive
management meetings, he testified that the meetings were not directive, and
the plaintiffs have identified no evidence to the contrary; indeed, the parties
agree that Mumpini did not run these meetings.

And while Mumpini

sometimes issued memoranda to Granite Bay Care staff (some of which were
actually prepared by the State Director in Mumpini’s name), that indicates at
best an occasional involvement insufficient to call into question the State
Director’s role as the primary day-to-day decision-maker.
The evidence thus fails to show that the owners had day-to-day
involvement in Granite Bay Care’s operations, and only reveals the kind of
ultimate supervisory authority inherent to ownership.
(iii)

Role in Causing FLSA Violation

As president and CEO, Mumpini had the ultimate decision on Granite
Bay Care’s staffing systems. PASMF I ¶ 4; Defs.’ Resp. I ¶ 4. When Granite

Much of the plaintiffs’ argument about Mumpini’s and Alicea’s role rests on the State
Director’s statement that he acted with the “advice and consent” of Mumpini and Alicea. But
the plaintiffs have removed that remark from its immediate context: at the State Director’s
deposition, that statement was immediately preceded by testimony that the monthly meetings
with them were not directive and that they rarely edited his work. See Gregory Robinson Dep.
July 18, 2012 (“Robinson Dep. I”) 121:24-122:2 (ECF No. 62-10). Therefore, the State
Director’s testimony regarding the “advice and consent” of Mumpini and Alicea does not
demonstrate direct day-to-day oversight so much as it simply reflects the inherent authority of
ownership, which alone is not enough.
7

10

Bay Care was formed, Mumpini and Alicea decided to use the same staffing
model that Granite Bay New Hampshire already used, with Adult Foster Care
Provider, Direct Support Professional, and Respite Worker positions. PASMF I
¶¶ 12, 14; Defs.’ Resp. I ¶¶ 12, 14.8

They authorized Granite Bay Care

management to use the Adult Foster Care Provider contracts with staff.
PASMF I ¶ 16; Defs.’ Resp. I ¶ 16.9 As a result, at its inception Granite Bay
Care compensated Adult Foster Care Providers and Respite Workers by stipend
as independent contractors and compensated Direct Support Professionals on
an hourly basis as employees. PASMF I ¶ 15; Defs.’ Resp. I ¶ 15.10 From 2006
to 2011, although Alicea and Mumpini did not have an ongoing discussion
about whether Granite Bay Care staff would be paid by stipend or by the hour,
the State Director discussed this issue with them at different times. DSMF I
¶ 31; Pls.’ Resp. I ¶ 31.
The defendants qualify these assertions by the plaintiffs and state that while Alicea testified
that the owners decided to use this arrangement, the State Director testified that he was given
discretion and authority to implement operations in Maine as he deemed appropriate. Defs.’
Resp. I ¶¶ 12, 14; Robinson Dep. I 11:12-13:6 (ECF No. 84-6). The defendants also point to
deposition testimony from Mumpini that Mumpini had no involvement in setting employment
and personnel policies and that his role was simply to guide the organization and assess what
he called the “overall picture.” Defs.’ Resp. I ¶ 14; Kasai Mumpini Dep. Aug. 17, 2012
(“Mumpini Dep. I”) 20:23-21:1, 57:1-58:22 (ECF No. 84-4).
I accept the defendants’
qualification, but it does not contradict the fact that Mumpini and Alicea decided at the outset
to use the staffing model in question.
9 The defendants qualify this assertion and state that while Alicea indicated that she
authorized use of the contract, the State Director had the authority to make day-to-day
decisions, including contract decisions. Defs.’ Resp. I ¶ 16; Mumpini Dep. I 49:24-52:3 (ECF
No. 62-7). Again, I accept the qualification, but the State Director’s day-to-day authority does
not contradict the fact that Mumpini and Alicea made the initial decision.
10 The defendants qualify the plaintiffs’ assertion that “the owners authorized the compensation
scheme,” PASMF I ¶ 15, pointing again to the State Director’s testimony as to his discretion as
well as to testimony from Alicea that she did not personally make any decisions regarding
employee compensation, stipend payments to be made to Adult Foster Care Providers, or other
personnel policies. Defs.’ Resp. I ¶ 15; Robinson Dep. I 11:12-13:6 (ECF No. 84-6); Alicea Dep.
II 34:17-35:12 (ECF No. 62-4). Once again, I accept the defendants’ qualification, but it does
not contradict the fact that the compensation scheme resulted from Mumpini’s and Alicea’s
original decision.
8

11

In 2006, the State Director provided Mumpini and Alicea with
information on comparative costs of compensating Provider staff by stipend
and by the hour, and he decided to change the compensation of Respite
Workers to an hourly pay rate and to treat the Respite staff in the future as
employees, a decision that Mumpini and Alicea supported.
Defs.’ Resp. I ¶ 21.11

PASMF I ¶ 21;

When the United States Department of Labor raised

issues over Granite Bay Care’s staff compensation policy in 2007, the State
Director discussed the policy with Mumpini and Alicea, and kept them updated
on the Department of Labor’s actions and on communications from Granite
Bay Care’s attorney.

DSMF I ¶ 23; Pls.’ Resp. I ¶ 23; PASMF I ¶ 22; Defs.’

Resp. I ¶ 22. After the Department of Labor concluded that Respite Workers
were not exempt from overtime requirements, Mumpini and Alicea approved
Granite Bay Care’s agreement to pay the overtime wages that the Department
of Labor informed them were owed. PASMF I ¶¶ 31-32; Defs.’ Resp. I ¶¶ 31-32.
Alicea believed that they had no choice but to do what the Department of Labor
told them. PASMF I ¶ 32; Defs.’ Resp. I ¶ 32.
In 2010, Granite Bay Care’s State Director informed Mumpini and Alicea
of pending Maine Department of Health and Human Services (“DHHS”) cuts to
the room-and-board subsidy paid to Granite Bay Care. PASMF I ¶ 25; Defs.’
The plaintiffs state that the State Director “proposed” this change to Mumpini and Alicea and
that they “agreed” to it, citing the State Director’s deposition testimony. PASMF I ¶ 21; Gregory
Robinson Dep. Sept. 12, 2012 (“Robinson Dep. II”) 21:5-9 (ECF No. 62-11). However, the
defendants qualify this statement and point out that the State Director immediately provided
the following qualification in his deposition: “I think it’s better to say that I had made the
decision and they supported it. That’s not semantics.” Robinson Dep. II 21:10-12 (ECF No.
62-11). I construe any conflict in these statements in the plaintiffs’ favor, but it makes no
difference to the outcome.
11

12

Resp. I ¶ 25. Mumpini asked him to provide a comprehensive review of roomand-board subsidies and provider contract details. PASMF I ¶ 26; Defs.’ Resp.
I ¶ 26.

He did so, informing Mumpini and Alicea that the bottom line

percentage cut in the room-and-board subsidy was 22.5 percent.
¶¶ 26-27; Defs.’ Resp. I ¶¶ 26-27.

PASMF I

Mumpini and Alicea requested that the

overall loss from the DHHS reduction be made up in other areas, and that an
overall percentage of funds be maintained. PASMF I ¶ 28; Defs.’ Resp. I ¶ 28.12
Prior to proposing changes in the staffing and compensation model for
caregiving staff to DHHS, the State Director informed Mumpini and Alicea of
the details of the proposed new staffing model. PASMF I ¶ 29; Defs.’ Resp. I
¶ 29.
Also in 2010, the United States Department of Labor informed Granite
Bay Care that it owed overtime wages to Adult Foster Care Providers. PASMF I
¶ 33; Defs.’ Resp. I ¶ 33.

Granite Bay Care’s State Director subsequently

provided Mumpini and Alicea with materials comparing the respective costs of
compensating staff by stipend and by the hour. PASMF I ¶ 34; Defs.’ Resp. I
¶ 34. (The State Director had previously presented Mumpini and Alicea with
cost comparisons of different staff compensation models in 2006 and 2008.
The plaintiffs allege both that Mumpini and Alicea “decided” that the DHHS cuts would be
passed on to Adult Foster Care Providers and that they “requested” that an overall percentage
of funds be maintained, an assertion that the defendants qualify. PASMF I ¶ 28; Defs.’ Resp. I
¶ 28. The State Director never testified that Mumpini and Alicea “decided” to pass on the cuts,
but in an e-mail, he did mention that they “requested” that an overall percentage of funds be
maintained. Robinson Dep. Ex. 25 at 1 (ECF No. 77-4). At his deposition, he testified that he
had supplied Mumpini and Alicea with the percentage figure and that it was “poor wording” to
state in the e-mail that they had “requested” that figure. Robinson Dep. II 48:10-49:4 (ECF No.
62-12). But viewing the facts in the light most favorable to the plaintiffs, the State Director’s email nevertheless raises a genuine question as to whether the owners requested the percentage
figure, and I therefore state the fact most favorably to the plaintiffs.
12

13

PASMF I ¶ 37; Defs.’ Resp. I ¶ 37.)

Alicea testified that in 2010 she began

looking into changing the method of compensation and that she eventually
decided to change staff compensation to an hourly rate of pay. PASMF I ¶¶ 33,
35; Defs.’ Resp. I ¶¶ 33, 35.13
Thus, although I have concluded that Alicea and Mumpini were not
involved in the quotidian operations of Granite Bay Care, the evidence is
sufficient to raise factual questions as to their role in causing the FLSA
violations asserted in this lawsuit.

They may have delegated the daily

operational decisions to the State Director, but triable questions remain as to
their role in some of the more momentous decisions regarding the company’s
compensation model.

The plaintiffs have introduced evidence that Mumpini

and Alicea were not merely aware of Granite Bay Care’s staffing model, but that
they in fact made the decision to use that model in Maine, i.e., authorized
Granite Bay Care management to enter into Adult Foster Care Provider
contracts with staff.

Even accepting the defendants’ qualification that the

State Director had authority and discretion to change the compensation
13 The defendants qualify the plaintiffs’ assertions that Alicea and Mumpini “began looking
into” changing compensation methods and that they “decided” to change compensation.
PASMF I ¶¶ 33, 35; Defs.’ Resp. I ¶¶ 33, 35. As the defendants note, the plaintiffs’ first
assertion is based on Alicea’s affirmative response to the following question: “As a result of
that, the position that U.S. Department of Labor was taking, did you start looking at changing
the way you paid Adult Foster Care Providers?” Caroletta Alicea Dep. Aug. 17, 2012 (“Alicea
Dep. I”) 58:7-10 (ECF No. 62-3). Although the defendants further point out that Alicea
proceeded to explain that the State Director provided the comparative data and decided the
method of compensation, Alicea’s response is sufficient to create a genuine dispute as to
whether she looked into changing the method of compensation. Similarly, Alicea answered
affirmatively the question, “Did you—you decided that you would pay them by the hour instead
of by a stipend?” Alicea Dep. I 60:1-6 (ECF No. 62-3). Although the defendants point out that
Alicea elsewhere stated that the State Director “did all of that calculating and work” regarding
the compensation change, Alicea Dep. I 59:17-21 (ECF No. 62-3), Alicea’s testimony is at least
ambiguous, and I view the ambiguity in the light most favorable to the plaintiffs.

14

scheme, that does not refute the basic fact that the original decision was that
of Mumpini and Alicea, not the State Director.

In other words, they had

“personal responsibility for making decisions about the conduct of the business
that contributed to the violations of the [FLSA]” if they made the decision to
implement the very compensation scheme at issue here. Baystate, 163 F.3d at
678.
Furthermore, even though I have concluded that the plaintiffs have not
shown evidence that Mumpini and Alicea were involved in the day-to-day
operations of Granite Bay Care, they have pointed to several instances of
involvement at significant junctures. In 2007, Mumpini and Alicea approved
the payment of overtime wages to Respite Workers following a Department of
Labor investigation.

In 2010, they requested that a specified percentage of

funds be maintained in the wake of DHHS cuts. Perhaps most significantly,
Alicea’s deposition testimony is at least ambiguous as to whether it was they
who made the decision to change staff compensation following the second
Department of Labor investigation in 2010.
That is more than enough to raise genuine questions as to whether
Mumpini and Alicea made the business decisions resulting in the FLSA
violations asserted here. Thus, even though the second Agnew factor favors
them due to their lack of daily involvement, a factfinder still might conclude
that Mumpini and Alicea were “employers” within the ambit of the FLSA due to
their ownership interest and their role in implementing the compensation
scheme that assertedly violates the FLSA.

See Hotel Oasis, 493 F.3d at 34
15

(“instrumental in ‘causing’ the corporation to violate the FLSA”).

I therefore

deny Mumpini’s and Alicea’s motion for summary judgment.
(2)

Maine Law Claim

Unlike the FLSA, Maine’s wage and hour law does not define the term
“employer,” and the parties dispute whether an individual supervisor can ever
be held liable as an employer. On the one hand, Maine’s Law Court has stated
that in interpreting Maine’s wage and hour law, when “a term is not defined in
either the relevant statutory provisions or in prior decisions of this court,
Maine Courts may look to analogous federal statutes, regulations, and case law
for guidance.”

Gordon v. Me. Cent. R.R., 657 A.2d 785, 786 (Me. 1995)

(citation omitted).

Indeed, the Law Court has held that in applying Maine’s

statute, a trial court did not err in analogizing to FLSA caselaw on employer
status (including Agnew) and in holding various interrelated corporate entities
liable as “joint employers” under an “economic reality” analysis.

Dir. of the

Bureau of Labor Standards v. Cormier, 527 A.2d 1297, 1299-1300 (Me. 1987).
But on the other hand, the First Circuit has consistently recognized the
extraordinarily broad scope of FLSA coverage.

In Bayside, for instance, the

First Circuit noted that the FLSA’s definitions of “employ,” “employer,” and
“employee”
“[are] comprehensive enough to require [their] application to
many persons and working relationships, which prior to
this Act, were not deemed to fall within an employeremployee category.” Moreover, the remedial purposes of the
FLSA require courts to define “‘employer’ more broadly than
the term would be interpreted in traditional common law
applications.”

16

163 F.3d at 675 (citations omitted). Maine’s wage and hour law was enacted in
1959, over two decades after the FLSA, and Maine’s definitions of “employee”
and “employ” closely track those of the FLSA. Compare 26 M.R.S.A. §§ 663(2),
and 663(3), with 29 U.S.C. §§ 203(g), and 203(e). Some provisions of the Maine
statute expressly incorporate FLSA standards. See, e.g., 26 M.R.S.A. §§ 664(1)
(keying Maine minimum wage to federal minimum wage) & 664(3) (for purposes
of overtime pay, “[t]he regular hourly rate . . . does not include any sums
excluded from the definition of ‘regular rate’ under the Fair Labor Standards
Act”). In contrast, the Maine legislature did not adopt the FLSA definition of
“employer,” a definition that the First Circuit found remarkably broad in
Agnew.
Although the Law Court did rely on Agnew and its “economic reality”
analysis in upholding joint employer liability for multiple corporations in
Cormier, extending liability to individual shareholders and officers represents a
far more drastic step. Doing so would run counter to the general principle that
“‘corporations are separate legal entities with limited liability,’” a principle that
leaves Maine courts “‘generally reluctant to disregard the legal entity.’”
Johnson v. Exclusive Props. Unlimited, 720 A.2d 568, 571 (Me. 1998) (citations
omitted). The plaintiffs have not shown the abuse of the corporate form and
unjust or inequitable consequences necessary to pierce the corporate veil and
hold individual shareholders liable. See id. (recognizing “two common elements
that a plaintiff must establish before a court will disregard the corporate entity:
(1) some manner of dominating, abusing, or misusing the corporate form; and
17

(2) an unjust or inequitable result that would arise if the court recognized the
separate corporate existence” (citations omitted)).14
Given both the Maine legislature’s silence on the definition of “employer”
and the reluctance of Maine courts to hold shareholders individually liable, I
decline to extend liability under Maine’s wage and hour law to individual
shareholders and officers.15
B.

Granite Bay New Hampshire

I recount additional undisputed facts that bear on whether Granite Bay
New Hampshire was an employer of these Maine plaintiffs.16
Mumpini and Alicea, the directors of the profit-making Granite Bay Care,
were also the directors of Granite Bay New Hampshire, a nonprofit that
provided in New Hampshire services comparable to those that Granite Bay
Care provided in Maine. DSMF I ¶ 11; Pls.’ Resp. I ¶ 11; PASMF I ¶¶ 40-41;
Defs.’ Resp. I ¶¶ 40-41.

In structuring Granite Bay Care, the Maine State

Director simply copied the Adult Foster Care Provider staffing model already
used in New Hampshire. PASMF I ¶ 13; Defs.’ Resp. I ¶ 13. He received a copy
14 The same holds true under the law of New Hampshire, the state in which Granite Bay Care
was incorporated. New Hampshire courts pierce the corporate veil and impose individual
liability “where the corporate identity has been used to promote an injustice or fraud, where a
defendant has suppressed the fact of incorporation, and where an individual expressly agrees
to personal liability for a corporation’s debts.” Gautschi v. Auto Body Discount Ctr., Inc., 660
A.2d 1076, 1079 (N.H. 1995) (citations omitted). The plaintiffs have not alleged any of those
circumstances.
15 I recognize, however, that this is a close question and that Maine caselaw provides only
partial guidance, so that the issue may ultimately need to be resolved by certification to the
Law Court.
16 Both Granite Bay New Hampshire and the plaintiffs have moved for summary judgment on
this question. Rather than alternately viewing the facts in the light most favorable to the
nonmovant on each of the two motions, I set forth the facts below in the light most favorable to
the plaintiffs. Since I conclude that Granite Bay New Hampshire is entitled to summary
judgment even on that version of the facts, I need not separately assess the facts for purposes
of the plaintiffs’ motion for summary judgment.

18

of the personnel handbook used by Granite Bay New Hampshire, adapted it to
Maine, and later revised it in conjunction with Granite Bay Care’s executive
management (i.e., all of the people under his direction), although not with
Mumpini and Alicea. DSMF I ¶ 40; Pls.’ Resp. I ¶ 40; Gregory Robinson Dep.
Sept. 12, 2012 (“Robinson Dep. II”) 8:21-9:3 (ECF No. 62-11). During the first
six months of Granite Bay Care’s existence from 2004 to 2005, Granite Bay
New Hampshire provided support staff to Granite Bay Care, namely a payroll
administrator who provided joint oversight. PASMF I ¶¶ 42-43; Defs.’ Resp. I
¶¶ 42-43.17 The management of both companies held monthly joint executive
strategic planning meetings with Mumpini and Alicea. PASMF I ¶ 44; Defs.’
Resp. I ¶ 44.
But separate State Directors managed the companies’ daily operations,
and these separate State Directors made all the decisions on personnel and
compensation for their respective companies. DSMF I ¶ 12; Pls.’ Resp. I ¶ 12.
Each company had exclusive responsibility over its own employees and
contractors, and had the power to hire, promote, discipline, and terminate its
own employees but not the employees or contractors of the other company.

The plaintiffs state more categorically that “Granite Bay [New Hampshire] management
provided Granite Bay Care with support in completing payroll,” a statement that Granite Bay
New Hampshire qualifies. PASMF I ¶ 43; Defs.’ Resp. I ¶ 43. I accept the qualification. The
testimony cited by the plaintiffs shows that the payroll administrator provided payroll support
only for the first six months of Granite Bay Care’s existence, after which Granite Bay Care
hired its own business coordinator, Robinson Dep. I 16:17-17:7 (ECF No. 74), and that Granite
Bay Care employees subsequently handled Granite Bay Care’s payroll, Robinson Dep. I 22:5-18
(ECF No. 74). Therefore, the plaintiffs have failed to raise a triable issue as to whether Granite
Bay New Hampshire provided support for the entirety of Granite Bay Care’s existence; the
record only shows that Granite Bay New Hampshire provided support for the first six months of
Granite Bay Care’s existence.
17

19

DSMF I ¶ 45; Pls.’ Resp. I ¶ 45.18 Each company individually supervised and
controlled the work schedules, conditions, and contractual terms of its
respective employees and contractors, but not those of the other company’s
employees or contractors.

DSMF I ¶ 46; Pls.’ Resp. I ¶ 46.19

Each entity

individually determined the rate and method of compensation of its own
employees and contractors, but not those of the other entity’s employees and
contractors. DSMF I ¶ 47; Pls.’ Resp. I ¶ 47. The companies independently
and

separately

handled

human

resource

matters

and

decisions,

and

maintained separate files, records, and contracts pertaining to their employees,
contractors, and business operations. DSMF I ¶¶ 47-48; Pls.’ Resp. I ¶¶ 4748.20 The two corporations were not required to coordinate with one another

The plaintiffs deny this statement and respond that the two corporations had joint contracts
with staff, enforceable by either corporation. Pls.’ Resp. I ¶ 45. As evidence, they point to the
non-disclosure, non-competition, and non-disparagement contract signed by Sharon
McCarron, an Adult Foster Care Provider, which designated as parties to that contract both
Granite Bay Care and Granite Bay New Hampshire. Contract of Sharon McCarron at 840 (ECF
No. 53-1). I address this contract at greater length below. In any event, even if the presence of
Granite Bay New Hampshire in this contract was not just a “typo” as Alicea and Mumpini
claim, Defs.’ Resp. I ¶ 45; Alicea Dep. I 18:6-24 (ECF No. 84-1); Mumpini Dep. I 17:3-18:7 (ECF
No. 62-7), the status of Granite Bay New Hampshire as a party to this non-disclosure, noncompetition, and non-disparagement agreement does not establish that Granite Bay New
Hampshire had the power to discipline or terminate the plaintiffs for anything other than a
violation of this particular agreement.
19 The plaintiffs deny this assertion, pointing again to the non-disclosure, non-competition, and
non-disparagement contract; but the designation of Granite Bay New Hampshire as a party to
that agreement does not raise factual questions as to Granite Bay New Hampshire’s control
and supervision over anything other than the subject matter of that particular agreement.
20 The plaintiffs qualify these assertions and state that both entities had joint monthly strategic
planning meetings and that both were contracting parties with the plaintiffs. Pls.’ Resp. I
¶¶ 47-48. The non-disclosure, non-competition, and non-disparagement agreement does not
raise factual questions as to anything outside of its particular subject matter, for the same
reasons discussed in the preceding footnotes, nor is its existence probative of whether or not
the companies maintained separate files. As for the monthly meetings, the portion of the State
Director’s deposition testimony cited by the plaintiffs, Robinson Dep. I 121:9-16 (ECF No. 74),
establishes only that “key individuals from both companies” were present at the monthly
strategic planning meetings. The testimony does not establish that human resources matters
were discussed at these meetings, let alone that representatives of one company handled the
18

(continued next page)
20

on any decisions. DSMF I ¶ 50; Pls.’ Resp. I ¶ 50. Granite Bay Care supported
its own business, financial, human resources, and operational needs on its
own, and did not rely on Granite Bay New Hampshire for support beyond the
first six months of its existence. DSMF I ¶ 51; Pls.’ Resp. I ¶ 51.21
The plaintiffs generally viewed Granite Bay Care as their employer, and
did not have a firm understanding of what Granite Bay New Hampshire was.
DSMF I ¶ 52; Pls.’ Resp. I ¶ 52. However, the plaintiffs signed non-disclosure,
non-competition, and non-disparagement agreements that named both Granite
Bay Care and Granite Bay New Hampshire as a contracting party (“Vendor”)
and stated, “Provider has requested that . . . Vendor pay Employee a bimonthly stipend for the services performed by Provider as specified in Provider
Contract (‘Compensation’).”

PASMF I ¶ 45; Defs.’ Resp. I ¶ 45; Contract of

Sharon McCarron at 840 (ECF No. 53-1).22 This contract only named Granite
human resources issues of the other company. The plaintiffs’ qualification thus fails to raise a
factual question as to whether Granite Bay New Hampshire handled human resources matters
for Granite Bay Care.
21 The plaintiffs deny this and state that Granite Bay New Hampshire provided support staff,
namely a payroll administrator, to assist with Granite Bay Care’s payroll, and that Granite Bay
Care adopted the staffing model and employment policies of Granite Bay New Hampshire. Pls.’
Resp. I ¶ 51. But in the cited portion of his deposition, the Maine State Director testified that
the payroll administrator assisted only in the “early days” of Granite Bay Care. Robinson Dep.
I 19:1-6 (ECF No. 84-6). As for the staffing model, whether or not Granite Bay Care copied the
policies of Granite Bay New Hampshire is immaterial to whether Granite Bay New Hampshire
provided support to Granite Bay Care. The plaintiffs’ denial is thus unsupported by the record
except to the extent that Granite Bay Care received assistance during its first six months.
22 The defendants deny this statement and point to testimony from Alicea and Mumpini
describing the inclusion of Granite Bay New Hampshire as a party to the agreement as a “typo.”
Defs.’ Resp. I ¶ 45; Alicea Dep. I 18:6-24 (ECF No. 84-1); Mumpini Dep. I 17:3-18:7 (ECF No.
62-7). The plaintiffs do not identify any evidence to the contrary. Nevertheless, viewing the
evidence in the light most favorable to the plaintiffs, I assume for purposes of this motion that
Granite Bay New Hampshire was indeed a party to the non-disclosure, non-competition, and
non-disparagement agreement. However, the plaintiffs’ assertion that “[i]n consideration of
plaintiffs’ promises, Granite Bay [New Hampshire] agreed to pay plaintiffs a stipend,” PASMF I
¶ 45, is unsupported by the text of the contract itself. Paragraph 2 of the contract only stated
that the Provider “requested” compensation, McCarron Contract at 840; nowhere did that
(continued next page)
21

Bay New Hampshire once, and despite the designation of Granite Bay New
Hampshire as a “Vendor,” the paragraph titled “Vendor’s Business” only
described the business of Granite Bay Care in Maine. McCarron Contract at
840-42.

In signing the contract, the Provider agreed not to breach

confidentiality or disparage either corporation, and not to compete in Maine
with either corporation. Id.
(1)

Federal Law Claim

I have already recounted the FLSA definition of “employer.” Department
of

Labor

regulations

expressly

contemplate

the

possibility

of

a

joint

employment relationship where an employee “stand[s] in the relation of an
employee to two or more employers at the same time” and “employment by one
employer is not completely disassociated from employment by the other
employer(s).”

29 C.F.R. § 791.2(a).

In that case, “all joint employers are

responsible, both individually and jointly, for compliance” with the FLSA. Id.
Does that principle apply here?
In Baystate, the First Circuit held that a temporary staffing agency was a
joint employer of temporary workers alongside the agency’s client companies,
looking “not to the common law conceptions of [the employment] relationship,
but rather to the ‘economic reality’ of the totality of the circumstances bearing
on whether the putative employee is economically dependent on [his or her]
alleged employer.”

163 F.3d at 675 (citation omitted).

The First Circuit

contract provide that Granite Bay Care or Granite Bay New Hampshire were responsible to
compensate the Provider.

22

reached its conclusion based on four factors: “whether the alleged employer
(1) had the power to hire and fire the employees; (2) supervised and controlled
employee work schedules or conditions of employment; (3) determined the rate
and method of payment; and (4) maintained employment records.” Id. (citation
omitted). Applying those factors, the First Circuit observed that the temporary
staffing agency there was “solely responsible for hiring the temporary workers”
and “had the power to refuse to send a worker back to a job site where he or
she had performed unsatisfactorily”; that the agency “controlled employee work
schedules and conditions of employment,” and “retained the authority to
intervene if problems arose with a worker’s job performance”; that it had
“unfettered discretion in determining the rate and method of payment” and
issued the workers’ paychecks; and that it maintained all employment records.
Id. at 675-76 (citations omitted).
In this case, all such authority was vested solely in Granite Bay Care, not
Granite Bay New Hampshire.

The plaintiffs have pointed to no evidence

contradicting the Granite Bay Care Maine State Director’s declaration that
Granite Bay New Hampshire had no involvement in the hiring, promotion,
discipline, and termination of Granite Bay Care employees; that Granite Bay
New Hampshire did not interfere with Granite Bay Care’s supervision and
control of work schedules and conditions; and that Granite Bay Care
maintained its own employment and business records.

Furthermore, the

parties agree that Granite Bay Care alone determined the rate and method of
compensation of its own employees and contractors.
23

The plaintiffs’ allegedly contradictory evidence consists of Mumpini’s and
Alicea’s role as directors of both companies; the attendance at monthly
strategic planning meetings by key individuals from both companies; the Maine
State Director’s adoption of the Granite Bay New Hampshire staffing model and
personnel handbook for use in Maine; the payroll administrator’s joint
oversight over payroll matters during the first six months of Granite Bay Care’s
existence; and the naming of Granite Bay New Hampshire as a party to the
non-disclosure/non-competition/non-disparagement

contracts

that

the

plaintiffs signed. I deal with each of those.
By itself, the common role played by Alicea and Mumpini in both
companies is of little import to the Baystate factors in assessing whether
Granite Bay New Hampshire is the plaintiffs’ employer. Similarly, the fact that
key individuals from both companies attended strategic planning meetings with
Alicea and Mumpini does not establish that the companies had any authority
over one another’s employees; the plaintiffs do not point to any evidence
indicating that Granite Bay New Hampshire’s representatives somehow
influenced Granite Bay Care’s employment decisions at these meetings. The
Maine State Director’s use of the Granite Bay New Hampshire staffing model
and handbook may demonstrate that the Granite Bay New Hampshire model
was an important influence on his own decision-making as State Director of
Granite Bay Care, but it does not suggest that Granite Bay New Hampshire
exercised control over Granite Bay Care’s employees. See Cavallaro v. UMass
Mem’l Health Care, Inc., 2013 WL 360405, at *8 (D. Mass. Jan. 28, 2013)
24

(“[T]he mere assertion that the corporations followed uniform policies is not
sufficient to support any reasonable inference that they exercised control over
[plaintiff’s] compensation.”).
The non-disclosure/non-competition/non-disparagement contracts are
not enough to establish Granite Bay New Hampshire as the plaintiffs’ employer.
The plaintiffs do not point to any testimony contradicting Mumpini’s and
Alicea’s statements that the designation of Granite Bay New Hampshire as a
party to those contracts was simply a typographical error. Their sole evidence
consists of the contract language, which only named Granite Bay New
Hampshire once.23 Even viewing the contracts in the light most favorable to
the plaintiffs and assuming the inclusion of Granite Bay New Hampshire was
intentional, the plaintiffs do not allege that Granite Bay New Hampshire was a
party to their actual employment contracts.24 And although the documents in
question stated, “Provider has requested that . . . Vendor pay Employee a bimonthly stipend for the services performed by Provider as specified in Provider
Contract (‘Compensation’),” McCarron Contract at 840, those documents did
23 Furthermore, despite the designation of Granite Bay New Hampshire as a “Vendor,”
paragraph 1 of the agreement, titled “Vendor’s Business,” described only the business of
Granite Bay Care in Maine, and paragraph 6 limited the “Territory” covered by the noncompetition clause to Maine only. McCarron Contract at 840.
24 Indeed, Granite Bay New Hampshire was not named in any of the accompanying contracts
included in the plaintiffs’ exhibit, which enumerated the Adult Foster Care Provider’s duties
and responsibilities and granted Granite Bay Care the right to terminate the agreement at any
time, see McCarron Contract at 848. The non-disclosure/non-competition/non-disparagement
contract seemingly referred to these contracts in paragraph 2: “Provider . . . has further
requested Vendor pay Employee a bi-monthly stipend for the services performed by Provider as
specified in Provider Contract (‘Compensation’).” McCarron Contract at 840. Although
“Provider Contract” was not defined in the non-disclosure/non-competition/nondisparagement agreement, the reference to “services performed by Provider as specified in
Provider Contract,” combined with the terms of the accompanying contracts in the plaintiffs’
exhibit, shows that the non-disclosure/non-competition/non-disparagement agreement was
not itself the contract for the Provider’s services.

25

not provide for payment by either corporation. In short, those documents were
neither employment agreements nor guarantees of compensation, and thus do
not support the proposition that Granite Bay New Hampshire employed the
plaintiffs.
As for the payroll administrator’s brief oversight, that does not establish
that Granite Bay New Hampshire controlled the compensation and rate and
method of payment of Granite Bay Care employees, especially in light of the
fact that the parties have elsewhere agreed that Granite Bay Care individually
determined the rate and method of compensation of its employees. DSMF I
¶ 47; Pls.’ Resp. I ¶ 47. In any event, even if this Bayside factor were to tilt
slightly in the plaintiffs’ favor, it does not alter the outcome, given that the
other three factors overwhelmingly favor Granite Bay New Hampshire.
(2)

Maine Law Claim

The plaintiffs ground their Maine law argument in the Law Court’s
decision in Cormier, which I summarized earlier. Unlike the First Circuit in
Baystate, the Cormier court did not provide a precise formulation for its
economic reality determination, noting only that it found “particularly
compelling the fact that [one of the corporations] exercises, in effect, overall
operational and administrative direction . . . through its centralized
management functions.”

527 A.2d at 1300.

These functions included the

hiring and payment of employees, advertisement of jobs, screening of job
applicants, and conducting orientation for new employees. Id. at 1299.

26

No such centralized management existed in this case, and nothing in
Cormier or subsequent caselaw indicates that the Maine Law Court’s approach
to economic reality in the case of joint employers would be more employeefavorable from the First Circuit’s approach in Baystate. I therefore reach the
same conclusion under Maine law as under federal law, and conclude that
Granite Bay New Hampshire, not the plaintiffs, is entitled to summary
judgment on the plaintiffs’ state law claim.
II.

Do the Defendants25 Have a Federal Good Faith Reliance Affirmative
Defense?

29 U.S.C. § 259(a) creates a “good faith” defense to FLSA liability:
[N]o employer shall be subject to any liability or
punishment for or on account of the failure of the employer
to pay minimum wages or overtime compensation under the
Fair Labor Standards Act of 1938 . . . if he pleads and
proves that the act or omission complained of was in good
faith in conformity with and in reliance on any written
administrative regulation, order, ruling, approval, or
interpretation, of the agency of the United States specified in
subsection (b) of this section [i.e., the Administrator of the
Wage and Hour Division of the Department of Labor], or
any administrative practice or enforcement policy of such
agency with respect to the class of employers to which he
belonged.

Id. (emphasis added).

Courts have interpreted § 259(a) as creating a three-

factor test requiring “that the act or omission complained of was (1) taken in
good faith and was (2) in conformity with and (3) in reliance on a written
administrative interpretation by a designated agency.”

Cole v. Fresh Farm

Poultry, Inc., 824 F.2d 923, 926 (11th Cir. 1987).
First, I recount additional undisputed facts pertinent to this motion.
25 I refer to all the defendants as the motion does, but I am granting summary judgment to
Granite Bay New Hampshire on the basis that it was not the plaintiffs’ employer.

27

In May 2007, the United States Department of Labor sent a letter to
Granite Bay Care’s lawyer initiating a payroll audit and requesting access to
documents. Defs.’ Statement of Material Facts (“DSMF II”) ¶ 4 (ECF No. 64);
Pls.’ Statement of Material Facts in Opp’n to Defs.’ Statement of Material Facts
(“Pls.’ Resp. II”) ¶ 4 (ECF No. 70). The Department of Labor’s investigation did
not focus on Adult Foster Care Providers, but focused instead on Respite
Workers, a category different from these plaintiffs’ positions. Pls.’ Additional
Statement of Material Facts (“PASMF II”) ¶ 1 (ECF No. 70); Defs.’ Resp. to Pls.’
Additional Statement of Material Facts (“Defs.’ Resp. II”) ¶ 1 (ECF No. 83).
Granite Bay Care provided all its employee payroll files and contracts for Direct
Support Professionals and Adult Foster Care Providers.

DSMF II ¶ 5; Pls.’

Resp. II ¶ 5. The Department of Labor Wage and Hour Investigator reviewed
the documents and asked questions about the employees’ contracts, including
the contracts of the Adult Foster Care Providers.26 DSMF II ¶ 6; Pls.’ Resp. II
¶ 6. The Investigator told Granite Bay Care’s State Director that he was aware
of the Adult Foster Care Provider business model because his sister received
similar services.

DSMF II ¶ 8; Pls.’ Resp. II ¶ 8.

During the course of the

investigation, the Investigator interviewed Adult Foster Care Providers as well

The plaintiffs assert that the substance of these questions, along with numerous other
statements made by the Investigator and other Department of Labor representatives, is
inadmissible hearsay. Pls.’ Resp. II ¶ 6. However, the defendants make clear that these
statements are not being offered for the truth of the matter asserted, but rather only to show
that the statements were made and that Granite Bay Care relied upon them in good faith.
Defs.’ Reply to Pls.’ Opp’n to Defs.’ Mot. for Partial Summ. J. at 4-5 (ECF No. 85). I therefore
consider the statements for that limited purpose.
26

28

as Respite Workers. DSMF II ¶ 12; Pls.’ Resp. II ¶ 12.27 After reviewing Granite
Bay Care’s files during the 2007 investigation, the Investigator compiled a list
of names and reviewed them with Granite Bay’s State Director, specifically
asking which named individuals were Adult Foster Care Providers. DSMF II
¶ 9; Pls.’ Resp. II ¶ 9. The Investigator removed those names from the list of
individuals who he believed were entitled to overtime. Id.28 The individuals
removed from the list worked both as Adult Foster Care Providers and as Direct
Support Professionals. DSMF II ¶ 10; Pls.’ Resp. II ¶ 10.29 The Investigator did
not raise any concerns over this dual role. DSMF II ¶ 11; Pls.’ Resp. II ¶ 11. At
a meeting on August 30, 2007, the Investigator met with Granite Bay Care’s
State Director and explained his findings, focusing on the Respite Workers.

The plaintiffs deny this allegation and state that the investigation did not focus on Adult
Foster Care Providers or their compensation, but rather on Respite Workers. Pls.’ Resp. II
¶ 12. In fact, the parties agree that the investigation focused on Respite Workers, as stated
above, but this fact alone does not create a dispute as to whether the Investigator interviewed
Adult Foster Care Providers during the course of his investigation.
28 The plaintiffs deny this allegation and state, “Defendant contends that several of the persons
who made complaints to USDOL were Adult Foster Care Providers who were also plaintiffs in
the private civil lawsuit against Granite Bay Care, and that USDOL did not prosecute their
claims.” Pls.’ Resp. II ¶ 9. However, this allegation does not raise a dispute as to whether the
Investigator reviewed the list and removed the names of Adult Foster Care Providers. The
plaintiffs also object to this evidence and argue that Granite Bay Care’s State Director’s
testimony as to why the Investigator removed names from the list lacks a foundation. However,
the State Director testified that the Investigator “went down the list” with him and that he
“ha[d] a discussion with [the Investigator] around why he was doing that” and that the
Investigator “indicated that it was fine for the [Adult Foster Care Providers] to cover their own
weekends, it was their home, they could—they could choose not to avail themselves of respite
and, therefore, that they—that money should not be included in his assessment.” Robinson
Dep. II 64:11-65:3 (ECF No. 64-1). Because the Investigator’s statements would be hearsay if
offered for their truth, I consider them only for the fact that he made them as that might bear
upon the defendants’ good faith reliance.
29 The plaintiffs deny this allegation and claim that the record cited does not support it, Pls.’
Resp. II ¶ 10, but in the cited portion of his deposition, Granite Bay Care’s State Director
testified that all of the Adult Foster Care Providers at the time also worked as Direct Support
Professionals, Robinson Dep. II 65:4-9 (ECF No. 64-1). The plaintiffs’ denial is therefore
unsupported.
27

29

DSMF II ¶ 13; Pls.’ Resp. II ¶ 13. The Investigator also told the State Director
that the Adult Foster Care Providers were “fine.” Id.
On September 17, 2007, the Investigator sent an e-mail to Granite Bay
Care’s lawyer and attached a Department of Labor opinion that discussed the
“companionship exemption” to the FLSA and set forth factors to consider in
determining whether a residence was a private home to which the exemption
applied. DSMF II ¶ 14; Pls.’ Resp. II ¶ 14; PASMF II ¶ 10; Defs.’ Resp. II ¶ 10.
The Investigator concluded in the e-mail that the homes where Granite Bay
Care’s clients resided were not the private homes of the Respite Workers, so
that the exemption did not apply to them. PASMF II ¶ 9; Defs.’ Resp. II ¶ 9.
The last paragraph of this e-mail stated that Adult Foster Care Providers who
did not use Respite services could have their Respite care payment considered
as an additional foster care stipend:
As I indicated at the meeting, my overtime back wage
figures are subject to revision as circumstances warrant,
such as for the instances [the State Director] mentioned
with the adult foster care provider opting not to avail
themselves of the respite care and instead being paid the
respite care stipend themselves. In that case, I will instead
consider the respite care payment as an additional foster
care stipend.

DSMF II ¶¶ 15-16; Pls.’ Resp. II ¶¶ 15-16. Granite Bay Care’s lawyer forwarded
the e-mail and attachment to the State Director, who read both the e-mail and
the Department of Labor opinion. PASMF II ¶ 8; Defs.’ Resp. II ¶ 8.
On November 7, 2007, Granite Bay Care representatives, including its
lawyer,

met

with

Department

of

Labor

representatives,

including

the

Investigator and the Department of Labor District Director. DSMF II ¶ 17; Pls.’
30

Resp. II ¶ 17.

The District Director reviewed the Investigator’s previous

determinations, and Granite Bay Care’s lawyer asked the District Director to
state in writing that the Adult Foster Care Provider model was acceptable.
DSMF II ¶ 18; Pls.’ Resp. II ¶ 18.

The District Director responded that the

Department of Labor did not ordinarily do so, but that if Granite Bay Care sent
such a letter, he would respond in writing if something in the letter were
incorrect. Id.
After the meeting, the Department of Labor issued a letter of findings,
which made no findings regarding Adult Foster Care Providers. DSMF II ¶ 19;
Pls.’ Resp. II ¶ 19.

Granite Bay Care’s lawyer in turn sent a letter to the

District Director to “memorialize our mutual understanding of DOL’s
investigation and outcome.” DSMF II ¶ 20; Pls.’ Resp. II ¶ 20; PASMF II ¶ 19;
Defs.’ Resp. II ¶ 19.

The letter set forth Granite Bay Care’s position on the

Adult Foster Care Providers and stated: “The DOL’s investigation did not focus
on the [Providers] or hourly workers and found no violations with regard to the
[Providers] or hourly workers.”

DSMF II ¶¶ 20-21; Pls.’ Resp. II ¶¶ 20-21.

Granite Bay Care’s State Director never received or was made aware of a
Department of Labor response to the letter. DSMF II ¶ 22; Pls.’ Resp. II ¶ 22.30
The Department of Labor sent follow-up e-mails seeking unrelated information
from Granite Bay Care, but neither those e-mails nor a February 22, 2008
The plaintiffs deny the defendants’ blanket assertion that “[t]he DOL never responded to the
statement in the letter.” DSMF II ¶ 22; Pls.’ Resp. II ¶ 22. The State Director testified only that
he never received nor was made aware of a response. Robinson Dep. II 74:22-75:2 (ECF No.
64-1). Viewing the facts most favorably to the plaintiffs, I conclude that the defendants have
shown only that the State Director was not aware of a response, not that there never was a
response.
30

31

letter from DOL’s District Director to Granite Bay Care’s lawyer addressed or
corrected the statement in the lawyer’s letter regarding Adult Foster Care
Providers. DSMF II ¶¶ 23-24; Pls.’ Resp. II ¶¶ 23-24.
In 2010 the Department of Labor initiated another investigation of
Granite Bay Care’s employment practices, and initially concluded that the
company’s Adult Foster Care Providers were due overtime payments. DSMF II
¶ 27; Pls.’ Resp. II ¶ 27.

At a meeting between Granite Bay Care and

Department of Labor representatives, Granite Bay Care’s State Director
contended that the company had acted in good faith based on the Department
of Labor’s review in 2007, and that the Department of Labor had misled
Granite Bay Care into believing that its compensation model for Adult Foster
Care Providers was viable. DSMF II ¶ 28; Pls.’ Resp. II ¶ 28. After a series of
meetings between the Department of Labor and Granite Bay Care regarding the
issue, the Department of Labor took no further action.

DSMF II ¶ 30; Pls.’

Resp. II ¶ 30.
With that factual background, I turn to the requirements of the good
faith defense. The defendants argue that the DOL Investigator’s e-mail dated
September 17, 2007 was a “ruling” to which they conformed in good faith
reliance, thus qualifying them for an affirmative defense under § 259(a).31 The

In their motion, the defendants relied on the e-mail, their discussions with DOL
representatives, and their letter to DOL. See Defs.’ Mot. for Partial Summ. J. at 10-11 (ECF No.
63). But in their reply brief they made clear that they do not argue that the Department of
Labor’s failure to respond to the lawyer’s letter stating Granite Bay’s understanding of the
findings against it represented a “ruling.” See Defs.’ Reply to Pls.’ Opp’n to Defs.’ Mot. for
Partial Summ. J. at 5 (ECF No. 85). Although the discussions and the letter might bear on
good faith, they cannot fulfill the requirement that the ruling or interpretation be written. With
31

(continued next page)
32

plaintiffs respond both that the e-mail does not constitute a “ruling” under
§ 259(a) and that in any event, Granite Bay Care did not rely on it in good faith.
Because I conclude that the Investigator’s e-mail does not fit section 259(a) as
a ruling or interpretation, I need not rule on the good faith issue.
Courts are divided on whether a DOL Investigator’s interpretation can
ever constitute a “ruling, approval, or interpretation, of the agency” (emphasis
added) within the meaning of § 259(a). The Department of Labor’s view is that
where the “agency” whose regulation, order, ruling,
approval, interpretation, administrative practice or
enforcement policy may be relied on is confined to “the
agency of the United States” specified in the section, the Act
expressly limits the meaning of the term to the official or
officials actually vested with final authority under the
statutes involved. . . . Furthermore, it appears from the
statement of the managers on the part of the House
accompanying the Conference Committee Report, that the
term “agency” as appearing in the Portal Act was employed
in this sense. As there stated (p. 16), the regulations,
orders, ruling, approvals, interpretations, administrative
practices and enforcement policies relied upon and
conformed with “must be those of an ‘agency’ and not of an
individual officer or employee of the agency. Thus, if
inspector A tells the employer that the agency interpretation
is that the employer is not subject to the (Fair Labor
Standards) Act, the employer is not relieved from liability,
despite his reliance in good faith on such interpretations,
unless it is in fact the interpretation of the agency.”
Similarly, the Chairman of the Senate Judiciary Committee,
in explaining the conference agreement to the Senate, made
the following statement concerning the “good faith” defense.
particular respect to DOL’s failure to contradict the letter from Granite Bay Care, Department
of Labor regulations make clear that “[a] failure to act or a failure to reply to an inquiry on the
part of an administrative agency is not a ‘regulation, order, ruling, approval, or interpretation’
within the meaning of” § 259. 29 C.F.R. § 790.17(f). Moreover, to the extent that the plaintiffs
seek overtime pay predating the alleged “ruling” in 2007, the defendants obviously cannot
argue that they “relied” upon something that did not yet exist. See 29 C.F.R. § 790.17(h) (“An
employer does not have a defense under these two sections unless the regulation, order, ruling,
approval, or interpretation, upon which he relies, is in effect and operation at the time of his
reliance.”); In re Cargill Meat Solutions Wage and Hour Litig., 632 F. Supp. 2d 368, 390 (M.D.
Pa. 2008) (holding that defendant could not have “relied upon” an opinion letter issued four
months after it made the policy decision in question).

33

“It will be noted that the relief from liability must be based
on a ruling of a Federal agency, and not a minor official
thereof. I, therefore, feel that the legitimate interest of labor
will be adequately protected under such a provision, since
the agency will exercise due care in the issuance of any
such ruling.”

29 C.F.R. § 790.19(b).32 Several courts have held that the written approval of a
Wage and Hour Investigator accordingly is not enough to establish a good faith
defense under § 259(a). See, e.g., Cusumano v. Maquipan Int’l, Inc., 390 F.
Supp. 2d 1216, 1222 (M.D. Fla. 2005) (“[§ 259] requires reliance upon a written
administrative interpretation from the Administrator of the Wage and Hour
Division of the Department of Labor, but Defendants’ Exhibit B was sent by a
Wage and Hour Investigator, not the Administrator.

Further, this sort of

correspondence does not constitute a written administrative interpretation.”
(citing district court cases from Colorado, Wisconsin, and Pennsylvania)). I find
the Cusumano reasoning persuasive.
On the other hand, the Eastern District of New York held in Mascol v. E
& L Transp., Inc., 387 F. Supp. 2d 87, 100-01 (E.D.N.Y. 2005), that a letter
signed by a Wage and Hour Investigator was a “ruling” within the ambit of
§ 259(a):
Since the letter was issued by the Wage and Hour Division
as a result of a specific official investigation, even though it
was not a published formal statement, it qualifies as an
official letter representing the position of the Wage and
Hour Division and so it must be a “ruling” of an “Agency” as
contemplated by the Portal Act.
32 Section 790 is part of a subchapter setting forth “statements of general policy or
interpretation not directly related to regulations,” and sets forth the Wage and Hour Division’s
conclusions and interpretations of the Portal-to-Portal Act, “provid[ing] a practical guide to
employers and employees as to how the office representing the public interest in enforcement of
the law will seek to apply it.” 29 C.F.R. § 790.1(c).

34

Id. But in Mascol, the correspondence in question was a letter “issued from
the Employment Standards Administration, Wage and Hour Division, DOL, and
signed by” the Investigator, and it addressed squarely the FLSA violation at
issue: “We believe your firm to be exempt from OT [overtime] under FLSA Reg.
Section 13(b)17.” 387 F. Supp. 2d at 91. In contrast, the Investigator’s e-mail
here focused on Respite care providers and did not purport to state an Agency
position, let alone a position on Adult Foster Care Providers.

The language

upon which Granite Bay Care relies stated:
As I indicated at the meeting, my overtime back wage
figures are subject to revision as circumstances warrant,
such as for the instances [Granite Bay’s State Director]
mentioned with the adult foster care provider opting not to
avail themselves of the respite care and instead being paid
the respite care stipend themselves. In that case, I will
instead consider the respite care payment as an additional
foster care stipend.

DSMF II ¶¶ 15-16; Pls.’ Resp. II ¶¶ 15-16. This statement is too slender a reed
to meet the definition of either an “interpretation” on the topic (“a statement
‘ordinarily of an advisory character, indicating merely the agency’s present
belief concerning the meaning of applicable statutory language’ . . . includ[ing]
bulletins, releases, and other statements issued by an agency which indicate
its interpretation of the provisions of a statute,” 29 C.F.R. § 790.17(c)), or a
“ruling” (“an interpretation made by an agency ‘as a consequence of individual
requests for rulings upon particular questions,’” 29 C.F.R. § 790.17(d)).
The defendants argue that “if there was any issue or concern with
payment of adult foster care providers on an hourly basis or with the potential
payment of overtime, there would have been no reason for this statement to be
35

made.” Defs.’ Mot. for Partial Summ. J. at 8 (ECF No. 63). Perhaps so, but
that does not turn the e-mail into an interpretation or a ruling, and neither
does the District Director’s silence in response to Granite Bay’s lawyer’s letter
or DOL’s 2010 decision not to proceed.

See 29 C.F.R. § 790.17(g) (“If for

example, the agency declines to express an opinion as to the application of the
law in a particular fact situation, the agency is refraining from interpreting the
law rather than giving an interpretation.”); De Luna-Guerrero v. N.C. Grower’s
Ass’n, Inc., 370 F. Supp. 2d 386, 392 (E.D.N.C. 2005) (“[I]t is not enough for
the agency to state that it will not express an opinion.” (citing 29 C.F.R.
§ 790.17(g))).
As a result, I deny the defendants summary judgment on their good faith
affirmative defense to the federal claim.
III.

The Plaintiffs’ Motion for Summary Judgment of Liability on the State
Law Claim
A.

Supplemental Jurisdiction

It is well established that under the supplemental jurisdiction statute
there is subject matter jurisdiction to adjudicate any state claim that forms
part of the same case or controversy as the federal claim. 28 U.S.C. § 1367;
Pagan–Colon v. Walgreens, 697 F.3d 1, 18 n. 12 (1st Cir. 2012). The parties
agree that appropriate compensation for the work under the Fair Labor
Standards Act (“FLSA”) claim involves the same work, conducted in the same
place, as the Maine law wage and hour claims. The defendants challenge my
exercise of supplemental jurisdiction over the state claims in this case only if I
grant them summary judgment on the FLSA claim. Because I have not granted
36

summary judgment on the federal claim against all the defendants, I will
continue to exercise jurisdiction over the state law claims under 28 U.S.C.
§ 1367.
B.

Statute of Limitations

The plaintiffs request that summary judgment be granted on the
defendants’ affirmative defense of the statute of limitations.33 I am not sure
why this issue is still in play. The parties agree that Maine’s general six-year
statute of limitations applies to this case.

The defendants’ liability under

Maine wage and hour laws can extend only as far back as the beginning of
each plaintiff’s employment. The defendants say that date is less than six years
in each case and the plaintiffs have not disagreed.

Because none of the

plaintiffs worked for the defendants for more than six years before filing their
respective complaints,34 I grant summary judgment to the plaintiffs on the
statute of limitations defense with regard to liability under Maine law.

I refer to all the defendants as the motion does, but I am granting summary judgment to
Granite Bay New Hampshire on the basis that it was not the plaintiffs’ employer, and to
Mumpini and Alicea on the basis that Maine law does not allow for individual liability.
34 Kayi Affo and Andre Folikoue Teko and Sharon McCarron filed their initial complaint on
December 16, 2011, Sharon Fairbanks filed her initial complaint on April 9, 2012 and Jessica
Palmer was added as a plaintiff when Fairbanks filed a First Amended Complaint on June 9,
2012.
33

37

C.

Employee/Independent Contractor35

The Maine wage-and-hour statute sets the minimum wage and overtime
standards for Maine employees.

Under Maine law, employers are generally

required to compensate their employees at or above the stated minimum wage
for the first 40 hours of work and at one and one-half times the employee’s
regular wage for time over 40 hours. 26 M.R.S.A. § 664 (1) & (3). Although
certain exemptions exist, the parties agree that none of those exemptions
applies to this case. The issue is whether the plaintiffs, when working as Adult
Foster Care Providers, were properly classified as independent subcontractors
in being paid a stipend without regard to minimum wage or overtime, rather
than as Granite Bay Care employees. If not, damages will follow.

The defendants assert that the record fails to set forth individualized circumstances covering
each aspect of the plaintiffs Kayi Affo, Sharon Fairbanks and Jessica Palmer’s relationship with
Granite Bay Care to demonstrate the employment relationship as a matter of law. Defs.’ Opp’n
to Pls.’ Mot. for Summ. J. at 22 (ECF No. 78). With respect to the plaintiffs Andre Folikoue
Teko and Sharon McCarron, the defendants assert that although the evidentiary record
provides specific factual evidence related to their employment relationship with Granite Bay
Care, there remain issues of fact that prevent summary judgment. Id. The defendants rely on
two cases to support the position that “individual plaintiffs cannot rely solely on evidence of a
pattern or practice to establish individual instances of discrimination.” Id. at 11 (citing
Ramirez v. DeCoster, 194 F.R.D. 348, 362 (D. Me. 2000), and Smith v. Northeastern Ill. Univ.,
2002 U.S. Dist. LEXIS 4498, at *12-13 (N.D. Ill. Mar. 19, 2002)).
Although the defendants’ cases support the requirement of individualized treatment in
discrimination cases where individual plaintiffs have experienced different conditions and
treatment, they do not support requiring separate treatment of each plaintiff in this case,
where the material facts do not include individualized evidence. Except for a few discrete
statements of fact proffered by the plaintiffs, on which I have not relied, the record shows that
Granite Bay Care treated Adult Foster Care Providers and Direct Support Professionals in a
uniform way. This standardization is found in the stipulated record, the Adult Foster Care
Provider and Direct Support Professional contracts, and the defendants’ evidentiary record,
including the affidavit of Kenneth Olson, who served as the Director of Operations for Granite
Bay Care from 2009 through 2012, and the depositions of Gregory Robinson, who served as
the State Director for Granite Bay Care from 2004 through 2011.
35

38

Eight-Factor Test

I examined the Maine law independent contractor/employee issue
recently in Scovil v. FedEx Ground Package Sys., Inc., 886 F. Supp. 2d 45, 5152 (D. Me. 2012). I concluded there that the eight factors from Murray's Case,
154 A. 352 (Me. 1931), determine the nature of the relationship under Maine
wage and hour laws. I rely upon the Scovil reasoning without revisiting it.36
The Murray’s Case relationship test teaches consideration of the
following factors:
(1) the existence of a contract for the performance by a
person of a certain piece or kind of work at a fixed price;
(2) independent nature of his business or his distinct
calling; (3) his employment of assistants with the right to
supervise their activities; (4) his obligation to furnish
necessary tools, supplies, and materials; (5) his right to
control the progress of the work except as to final results;
(6) the time for which the workman is employed; (7) the
method of payment, whether by time or by job; (8) whether
the work is part of the regular business of the employer.

Scovil, 886 F. Supp. 2d at 52 (quoting Murray’s Case, 154 A. at 354). Although
no one factor is controlling, the principal test of the relationship is “the right to
control.” Scovil, 886 F. Supp. 2d at 52. But the Law Court has also clarified
that when a workers’ protective statute is being interpreted (as it is here), more
attention should be given to two of the eight factors: the nature of the work
(Murray’s Case’s “independent nature of his business or his distinct calling”)
and its importance to the employer’s business (Murray’s Case’s “whether the
work is part of the regular business of the employer”). Legassie v. Bangor Pub.
Although the parties cite a number of federal cases, including Rutherford Food Corp. v.
McComb, 331 U.S. 722 (1947), I have not found it necessary to address them, given the Maine
Law Court’s own extensive attention to this state law topic.
36

39

Co., 741 A.2d 442, 445 & n.4 (Me. 1999). With these standards in mind, I
consider the relationship between the parties in this case.
(1)

Existence of a contract for the performance by a person of a
certain piece or kind of work at a fixed price

The parties agree that Providers entered into contracts with Granite Bay
Care in which they agreed to assume responsibility for the care of a disabled
individual who was in need of mental health services. Stipulated Facts ¶¶ 2, 5,
40, 41, 43. The contract required that the Provider be responsible for the care
of the client twenty-four hours per day, five days per week. Stipulated Facts
¶ 2.
The contract required that the Provider provide services certain hours of
each week. McCarron Contract at 836-37, 847, 849. The services that were
provided under the contract were compensated in the form of a stipend, paid
bimonthly or monthly. Stipulated Facts ¶ 5. The stipend was further broken
down into a per diem amount to facilitate the calculation of an adjusted
stipend if the Provider were absent on a day in which he or she otherwise
would have been providing care. Stipulated Facts ¶ 6; McCarron Contract at
847, 849. In fact, the plaintiffs’ stipends were reduced on a per diem basis
when they were absent for a day or more and Respite coverage needed to be
obtained.

Stipulated Facts ¶¶ 6, 36; McCarron Contract at 847.

The

contractual “stipend” was directly proportional to the number of days the
Provider worked.

In other words, this was payment for time worked—like a

wage—and not payment for a service whereby the Provider could make a profit
by performing more quickly.
40

This factor favors the finding of an employee relationship.
(2)

Independent nature of the business or his distinct calling

The parties agree that the Providers did not operate an independent
business or have a traditional “calling,” although some had experience in
caring for disabled individuals.

Stipulated Facts ¶ 10.

Indeed, Granite Bay

Care provided training for the Providers. Stipulated Facts ¶¶ 13, 22, 23. The
Providers did not ordinarily perform other services for other entities during the
time of their employment with Granite Bay Care. Stipulated Facts ¶ 35.37
This factor favors the finding of an employee relationship.
(3)

Employment of assistants with the right to supervise their
activities

The contract did not permit the Providers to hire assistants or
substitutes, but instead required Granite Bay Care’s approval of any Respite
Care provider identified by the Provider.

McCarron Contract at 848.38

Providers did not supervise Respite Workers. Pls.’ Statement of Material Facts
(“PSMF III”) ¶ 5 (ECF No. 57); Defs.’ Resp. to Pls.’ Statement of Material Facts
(“Defs.’ Resp. III”) ¶ 5 (ECF No. 75). If a Provider did not like the manner in
which a Direct Support Professional or a Respite Care Worker treated the
The plaintiffs assert that because the Providers’ job duties required them to engage only in
ordinary tasks such as cooking, cleaning and driving, and needed no specialized education, the
Providers did not have a distinct “calling” or business. Pls.’ Mot. for Partial Summ. J. at 11
(ECF No. 56). I do not find this argument based on the nature of the work persuasive. Many
businesses operating as independent contractors provide services where they cook or clean or
drive.
38 The defendants complain that only two plaintiffs provided affidavits that they were not
allowed to hire assistants. Defs.’ Resp. in Opp’n to Pls.’ Mot. for Summ. J. at 17 (ECF No. 78).
But there is no suggestion that the Providers’ contract language did not apply to all these
plaintiffs. Defs.’ Resp. to Pls.’ Statement of Material Facts (“Defs.’ Resp. III”) ¶¶ 4, 5 (ECF No.
75). Affidavits were therefore unnecessary on this topic unless there was evidence that Granite
Bay Care and the plaintiffs ignored this provision.
37

41

disabled individual or the manner in which they performed their jobs, the
Provider

complained

to

Granite

Bay

Care’s

management

about

those

employees. Id.
This factor favors the finding of an employee relationship.
(4)

Obligation to furnish necessary tools, supplies, and materials

Providers were required to come equipped with a cell phone, a vehicle
and a computer to assist in supporting and caring for their assigned
individuals, McCarron Contract at 843 ¶ h, no specialized tools.

They were

also responsible for providing bedroom furnishings for their own rooms.
McCarron Contract at 843 ¶ g; Stipulated Facts ¶ 17. But they did not have to
provide the home, food for the clients, heat, insurance or utilities. PSMF III
¶ 6; Defs.’ Resp. III ¶ 6.

Granite Bay Care leased the homes in which they

provided services. PSMF III ¶ 7; Defs.’ Resp. III ¶ 7. Moreover, they did not
have to pay any of the costs of maintaining the homes. PSMF III ¶ 8; Defs.’
Resp. III ¶ 8. They informed Granite Bay Care of needed repairs. Stipulated
Facts ¶ 18. Granite Bay Care or the landlord made all the repairs. Id. Bills for
the maintenance of the homes went to Granite Bay Care’s corporate office to be
processed and paid. Stipulated Facts ¶¶ 19-20.
Nothing about the tools, supplies and materials suggests that this is an
independent contractor relationship, although this factor does not lead strongly
in either direction.

42

(5)

Right to control the progress of the work except as to final results

With respect to control “[i]t is not the fact of actual interference with the
control, but the right to interfere, that makes the difference between an
independent contractor and a servant or agent.” Murray’s Case, 154 A. at 354
(emphases added) (citation omitted).

The plaintiffs assert that Granite Bay

Care had the right and power under its Adult Foster Care Provider contract, as
well as under the disabled client’s “Person Centered Plan,” to direct and control
their work. Granite Bay Care disagrees. Although the unusual work setting
here may have made actual control on a continuous basis difficult, I conclude
that Granite Bay Care nevertheless retained the right to control the plaintiffs.
The Adult Foster Care Provider contract provided specific responsibilities
and obligations for the Provider.

Stipulated Facts ¶ 21; McCarron Contract.

However, the parties have stipulated that the contract covered only part of the
services and/or work performed to provide disabled individuals support and
care during each week.

Stipulated Facts ¶ 1.

Granite Bay Care instructed

Providers on how their role should be performed and trained Providers on how
to work with disabled individuals. Stipulated Facts ¶ 22. Under the contract,
Granite Bay Care not only directed the hours of the work but also required
Providers to request leave if they wanted to be absent from the home that
Granite Bay Care provided for the client.

Stipulated Facts ¶ 2; McCarron

Contract at 843, 848. Granite Bay Care set and enforced rules regulating the
conduct of the Providers in the home, such as prescribing who could authorize
visitors to the home and prohibiting the possession of alcohol, weapons or

43

pornography. Stipulated Facts ¶ 26; McCarron Contract at 843. The contract
required Providers to direct questions about agency matters to Granite Bay
Care’s Program Manager. McCarron Contract at 838, 843. In addition, Granite
Bay Care reserved the right to terminate a Provider’s contract at any time
without cause and without notice.

Stipulated Facts ¶ 8.

Providers, on the

other hand, were required to give 90 days’ notice before ending the contract.
Stipulated Facts ¶ 9.

A Provider’s failure to provide the required notice of

termination could “impact the individual’s employment status in other [Granite
Bay Care] programs” if he or she were so employed.39 Id. Granite Bay Care
required Providers to provide all required documents and a monthly report to
its Program Manager. McCarron Contract at 843 ¶ c.
Each client that Granite Bay Care served had his or her own unique
needs.

In order to meet those needs a detailed Person Centered Plan was

developed. A team consisting of the legal guardian for the disabled individual,
a representative of the State of Maine, staff from Granite Bay Care and the
Provider generated the Plan. PSMF III ¶ 12; Defs.’ Resp. III ¶ 12. The Plan had
to be approved by the State and the guardian, and then was enforced by
Granite Bay Care. PSMF III ¶ 13; Defs.’ Resp. III ¶ 13. The Providers had to
follow the Plan in teaching daily living skills and in the general delivery of
services to the disabled client. McCarron Contract at 836 ¶ c. The Providers
stayed in regular contact with the legal guardian for the disabled client. Defs.’
39 Direct Support Professional and Respite Care employees who failed to deliver the requisite
quality of services could be terminated immediately. As a consequence of being terminated as
an employee, if they served as Adult Foster Care Providers, their contract could also be
terminated. Stipulated Facts ¶ 25.

44

Additional Statement of Material Facts (“DASMF III”) ¶ 29 (ECF No. 75); Pls.’
Resp. to Defs.’ Additional Statement of Material Facts (“Pls.’ Resp. III”) ¶ 29
(ECF No. 82).

The Provider was the connection to the legal guardian and

attended all meetings and provided the detailed update on what the disabled
individual had done and how the client was progressing. DASMF III ¶ 31; Pls.’
Resp. III ¶ 31.
Granite Bay Care acknowledges that it monitored the Providers’
performance under the contract, DASMF III ¶ 34; Pls.’ Resp. III ¶ 34, but it
asserts that its focus was on the ultimate results of the Providers’ work rather
than on how the results were achieved. It cites Legassie, 741 A.2d at 444, for
support of its argument that the Providers were therefore independent
contractors. Id. (“The right to control the ‘details of the performance,’ present
in the context of an employment relationship, must be distinguished from the
right to control the result to be obtained, usually found in independent
contractor relationships.” (citation omitted)).

Granite Bay Care says that

although it tailored care to the individual client and provided individualized
mental health services, the Providers were provided “unfettered discretion in
how they performed their duties.” Defs.’ Opp’n to Pls.’ Mot. for Summ. J. at 18
(ECF No. 78). To support this assertion, Granite Bay Care points out that a
Provider made hundreds of decisions each day:
when to wake the consumer, when the consumer should
get dressed, what the consumer should eat for the day,
when and how to prepare and cook meals, how to involve
the consumer in those activities, what leisure activities the
consumer can or should engage in, when the consumer can
watch television and which shows he or she may watch,
45

what and when the consumer can read, when the consumer
can have time to relax and what the consumer will do
during that period, what games the consumer can play,
topics to discuss with the consumer, when telephone calls
can be made, when and what to clean in the house, when
to perform hygiene related functions, when, where and how
long to go out for walks or drives or to attend church or
activities, what activities to participate in, when to prepare
for bed and to go to bed, how to provide guidance and
instruction to the consumer on daily activities such as
those described above, how and when to reinforce
instruction and lessons that were experienced during the
course of the day, how to continue to assist the consumer
with their growth and development, and how, when and
why to restrain and/or discipline the consumer for his or
her conduct. In addition, the [Provider] is responsible for
modeling appropriate behavior throughout the time he or
she spends with the consumer.

DASMF III ¶ 25; Pls.’ Resp. III ¶ 25.

Because of the mental health issues

experienced by its disabled clients, Granite Bay Care explains that each of the
“events” described above was much more significant than it might otherwise
seem to an individual not involved in the delivery of mental health services.
According to Granite Bay Care, this individualized decision-making by the
Providers throughout the day and night was critical to the development of that
client and was the essence of the responsibilities performed by the Providers
under the contract.

It says that Providers used their own judgment and

discretion and were given the freedom to perform their duties of caring for an
individual client on an hourly and daily basis.

Granite Bay Care was not

present in the home with the Providers and, it says, because of the need for
personalized care, did not micromanage the Providers on a daily or weekly
basis.

46

Granite Bay Care’s arguments may show that constant monitoring of
Providers was impractical, but they do not show that Granite Bay Care
surrendered the right to control what Providers did.

Many workers

conventionally categorized as employees are not and cannot be supervised on a
moment-by-moment or even hour-by-hour basis (consider teachers or coaches),
especially in today’s world of telecommuting.

But that does not mean that

their employer lacks the right to control them, only the opportunity.

Even

without intervening in the details of how the Providers performed each task or
job duty, Granite Bay Care controlled the work of the Providers.

Given the

terms of the contract and the Plans that structured and ordered Providers’
work, the ultimate supervision and oversight of their work by Granite Bay Care
and the training provided by Granite Bay Care, the Providers did not have the
right to control their own work. They were not given any contractual discretion
to deviate from contracts or Plans.

They were subject to the direction and

supervision of Granite Bay Care.
This factor favors the finding of an employee relationship.
(6)

Time for which the workman is employed

The Provider contract was for a one-year term. McCarron Contract at
835. In practice, Providers signed a new contract each year they served and all
were employed for more than one year. Sharon McCarron Aff. ¶ 5 (ECF No. 573); Andre Folikoue Teko Aff. ¶ 5 (ECF No. 57-4); Kayi Affo Contracts (ECF No.
68-2; Jessica Bradbury Palmer Contracts (ECF No. 68-3); Sharon Fairbanks
Contracts (ECF No. 68-4); Sharon McCarron Contracts (ECF No. 68-5); Andre

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Folikoue Teko Contracts (ECF No. 68-6).

Granite Bay Care could terminate

them without cause and without notice, but the Providers had the obligation to
give advance notice if they left Granite Bay. Stipulated Facts ¶¶ 8-9.
The plaintiffs assert that the “prolonged duration” of the employment
indicates that they were employees.

The defendants cite Owen v. Royal

Industries, Inc., 314 A.2d 60, 62 (Me. 1974), a workers’ compensation case, to
confirm that independent contractors can in fact be engaged on a long-term
basis. Defs.’ Opp’n to Pls.’ Mot. for Summ. J. at 20 (ECF No. 78). Owen does
recognize that proposition, albeit in passing.
I conclude that this factor does not favor either categorization of the
relationship.
(7)

Method of payment―by time or by job

Granite Bay Care compensated the Providers according to a fixed fee for
a month. Defs.’ Opp’n to Pls.’ Mot. for Summ. J. at 20-21 (ECF No. 78). But
there was no way the Providers could complete the “job” in a shorter time.
Instead, as discussed above, Granite Bay Care reduced a Provider’s stipend for
each missed day of work. The stipend also varied according to the number of
days in the month. McCarron Contract at 849 (semi-monthly stipend
breakdown).
The per diem reduction weighs in favor of finding an employee
relationship.

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(8)

Whether the work is part of the regular business of the employer

The work that Providers did was not only “part of the regular business of”
Granite Bay Care, it was central to its business. Granite Bay Care’s mission
stated: “Granite Bay Care (Care) is a locally owned and operated human service
agency providing intensive clinical, nursing, residential, and community based
services to adults with cognitive and physical disabilities, in a growing number
of locations spanning North to South, Bangor to Berwick.” Stipulated Facts
¶ 39. Granite Bay Care accomplished this mission through engaging persons
in various positions including Providers and Direct Support Professionals.
Stipulated Facts ¶ 41.

Providers worked in cooperation with the Direct

Support Professionals doing very similar work at different times of the day.
Together they were an integral part of the mission that Granite Bay Care chose:
the care and protection of developmentally and physically disabled people in a
home-based setting.

Stipulated Facts ¶¶ 3, 14, 39-41.

It is an admirable

mission, but to say that these Providers were independent contractors would
mean that Granite Bay Care contracted out the heart of its business.
This factor favors employee status.
* * * * *
I conclude that none of the Murray’s Case factors supports independent
contractor status, and that most of them favor employee status. The factors of
special importance (according to Legassie) in worker protection cases such as
this—(2) the nature of the work and (8) its relation to the employer’s business—
strongly favor employee status. The factor emphasized in tort liability cases—

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(5) right to control—also strongly favors employee status. On this record and
under Maine law, a factfinder could not find that the Providers were
independent contractors, but only that they were employees. Therefore, the
plaintiffs are entitled to summary judgment that Granite Bay Care is liable on
the Maine state law claim for violation of Maine’s wage and hour statute in
treating these employees as independent contractors.
CONCLUSION
As a result of all my rulings, summary judgment shall be entered in favor
of Granite Bay Connections, Inc. (the New Hampshire nonprofit) on all the
plaintiffs’ claims, and in favor of Kasai Mumpini and Caroletta Alicea on the
state law claims. Summary judgment on liability shall be entered in favor of
the plaintiffs on their Maine state law claim against Granite Bay Care, Inc. The
amount of damages on that claim, as well as liability on the federal law claim
(including that of Mumpini and Alicea), remain for trial.
SO ORDERED.
DATED THIS 30TH DAY OF MAY, 2013
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

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