Mohammadi v. Nwabuisi et al
Filing
46
ORDER GRANTING IN PART AND DENYING IN PART 33 Motion for Summary Judgment; GRANTING 34 Motion for Partial Summary Judgment. Signed by Judge David Ezra. (rg)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
DANA D. MOHAMMADI,
Plaintiff,
vs.
AUGUSTINE NWABUISI, ROSE
NWABUISI, RESOURCE HEALTH
SERVICES, INC. d/b/a RESOURCE
HOME HEALTH SERVICES, INC.,
and RESOURCE CARE
CORPORATION,
Defendants.
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Cv. No. SA:12-CV-00042-DAE
ORDER: (1) GRANTING IN PART AND DENYING IN PART DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT; (2) GRANTING PLAINTIFF’S
MOTION FOR PARTIAL SUMMARY JUDGMENT
On April 29, 2013, the Court heard oral argument on the Motion for
Summary Judgment filed by Rose Nwabuisi, Augustine Nwabuisi, Resource Care
Corporation, and Resource Health Services, Inc. (collectively, “Defendants”)
(doc. # 33); and the Motion for Partial Summary Judgment filed by Plaintiff Dana
Mohammadi (doc. # 34). After considering the supporting and opposing
memoranda, and in light of the parties’ arguments at the hearing, the Court, for the
reasons that follow, GRANTS IN PART AND DENIES IN PART Defendants’
Motion for Summary Judgment (doc. # 33) and GRANTS Plaintiff’s Motion for
Partial Summary Judgment (doc. # 34).
1
BACKGROUND
Resource Health Services, Inc. d/b/a Resource Home Health Services,
Inc. and Resource Care Corporation are Texas-based corporations that provide a
range of in-home healthcare services, including the provision of nurses. (Doc. # 33
(“Defs.’ MSJ”) ¶ 1.) Both corporations are wholly owned by Defendant Rose
Nwabuisi (“Ms. Nwabuisi”), who is also the Nurse Administrator in charge of the
nurses. (Id.; doc. # 34-3 (“Nwabuisi Dep.”) at 55–56.) Defendant Augustine
Nwabuisi (“Mr. Nwabuisi”) is the CEO of both corporations. (Defs.’ MSJ ¶ 1.)
The two corporations employ over 500 employees, and annual revenues exceed $5
million. (Nwabuisi Dep. at 24.) For the purposes of this Order, both corporations
will be referred to collectively as “Resource.”
Plaintiff Dana Mohammadi f/k/a Dana Nassouri was employed by
Resource as a licensed vocational nurse (“LVN”) from approximately June 2009
through approximately October 2011. (Doc. # 24 ¶¶ 4.2–4.3.) LVNs like Plaintiff
are paid an hourly rate and are expected to work from 8:30 a.m. to 5 p.m., with 30
minutes for lunch. (Defs.’ MSJ ¶¶ 4, 8.) Resource tracks LVNs’ hours using a
time card system. (Id.) If an LVN performs a home visit outside the regular
workday, he or she is paid a flat fee per visit and is required to complete a Patient
Visit record detailing all information concerning the patient and the visit.
(Id. ¶¶ 6–7.)
2
In March 2010, Resource loaned Plaintiff $3,500 “for a personal
loan.” (Doc. # 34 (“Pl.’s MPSJ”) Ex. F.) On October 26, 2010, Resource loaned
Plaintiff an additional $1,700 “for [a] personal emergency.” (Id. Ex. G.) Each
time, the terms of the loan were memorialized in forms entitled “An Agreement to
Loan Money or Advance Wages from the Company.” (See id. Exs. F, G.) Those
forms included provisions authorizing Resource to withhold portions of Plaintiff’s
wages in order to repay the loans. (See id.)
In November of 2010, Plaintiff voluntarily resigned from Resource to
pursue another job. (Defs.’ MSJ ¶ 10; doc. # 34-3 at 32.) On or around September
2011, approximately ten months after she left Resource, Plaintiff contacted Ms.
Nwabuisi and requested to be rehired. (Defs.’ MSJ ¶ 12.) Ms. Nwabuisi rehired
Plaintiff in the Austin office, where she started on October 3, 2011. (Id. ¶¶ 12–13.)
On October 31, however, Plaintiff was terminated. (Id. ¶ 14.) Defendants claim
that Plaintiff was fired because she failed to come to work and made excuses that
inconvenienced other employees (id.); Plaintiff claims that she informed
Defendants that she was undergoing “oral surgery for a serious dental condition”
and later “learned she had been fired, most likely for taking a brief medical leave
from her position.” (Doc. # 35 at 21.) The paycheck that Plaintiff received for the
pay period of October 1–15, 2011, totaled just $0.90, because Defendants deducted
$1,322.00 from Plaintiff’s wages. (Id. Ex. Q.)
3
In the fall of 2011, Plaintiff filed two claims with the Texas
Workforce Commission. The first sought unemployment benefits; the second was
for uncompensated wages, mileage reimbursements, and unpaid overtime
compensation. (Id. at 21–22.) When Plaintiff retained counsel, however, she
withdrew her wage claim with the TWC “in order to avoid claim preclusion and to
seek the full amount she is entitled to under the FLSA.” (Id. at 22.)
On February 2, 2012, Plaintiff brought an action in this court, alleging
that Defendants had violated the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 201 et seq.; the Texas Minimum Wage Act (“TMWA”), Tex. Lab.
Code. § 62.001 et seq.; and state contract law. (Doc. # 7.) Plaintiff filed an
Amended Complaint on June 4, 2012, to add a retaliation claim based on
allegations that Defendants had “blackballed” her by giving negative performance
reviews to potential employers. (Doc. # 24 (“FAC”) ¶¶ 6.1–6.5.) The FAC alleged
(1) that “Defendants did not pay Plaintiff her promised hourly rate for each hour
she worked”; (2) that “Plaintiff was not paid the federally mandated minimum
wage for each hour she worked”; (3) that Plaintiff was not paid overtime for the
hours she worked in excess of forty hours per week; and (4) that Defendants
retaliated against Plaintiff for filing this lawsuit. (Id. ¶¶ 4.4–4.7, 4.11–4.12.)
4
Defendants filed their Amended Answer on October 17, 2012
(doc. # 32), and a Motion for Summary Judgment on November 16, 2012
(doc. # 33).
Plaintiff filed a Motion for Partial Summary Judgment on the same
day. (Doc. # 34.) Plaintiff’s Motion requested that the Court grant Plaintiff
summary judgment on the following issues:
1) Whether or not, as a matter of law, Plaintiff is entitled to overtime
compensation and liquidated damages;
2) Whether or not, as a matter of law, Rose Nwabuisi is individually liable;
3) Whether or not, as a matter of law, Augustine Nwabuisi is individually
liable; and
4) Whether or not, as a matter of law, Defendants’ violation of the FLSA was
willful, thereby entitling Plaintiff to claim damages for a three-year period.
(Id. at 2.)
STANDARD OF REVIEW
Summary judgment is proper when the evidence shows “that there is
no genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251–52 (1986). The main purpose of summary judgment is to dispose of
factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317,
323–24 (1986).
The moving party bears the initial burden of demonstrating the
absence of any genuine issue of material fact. Id. at 323. If the moving party
5
meets this burden, the non-moving party must come forward with specific facts
that establish the existence of a genuine issue for trial. ACE Am. Ins. Co. v.
Freeport Welding & Fabricating, Inc., 699 F.3d 832, 839 (5th Cir. 2012). In
deciding whether a fact issue has been created, “the court must draw all reasonable
inferences in favor of the nonmoving party, and it may not make credibility
determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 150 (2000). However, “[u]nsubstantiated assertions,
improbable inferences, and unsupported speculation are not sufficient to defeat a
motion for summary judgment.” Brown v. City of Houston, 337 F.3d 539, 541
(5th Cir. 2003). “Where the record taken as a whole could not lead a rational trier
of fact to find for the non-moving party, there is no ‘genuine issue for trial.’”
Matsuhita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106
(1986) (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289
(1968)).
DISCUSSION
I.
Defendants’ Motion for Summary Judgment
A. FLSA Minimum Wage Claim
Plaintiff alleges that Defendants violated 29 U.S.C. § 206(a) when
they willfully failed to pay her at least the federally mandated minimum wage for
each hour she worked in a workweek. (FAC ¶ 5.3.) Plaintiff bases this claim on a
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paycheck she received for the pay period of October 1, 2011–October 15, 2011.
(Doc. # 35 at 16; id. Ex. Q.) Plaintiff worked at least 60.07 hours during those two
weeks. (Id. at 16.) However, because Defendants deducted $1,322.00 from
Plaintiff’s wages, her paycheck totaled just $0.90. (See id.) As a result, claims
Plaintiff, she was compensated at a rate of just $0.01 per hour. (Doc. # 35 at 16.)
Defendants do not contest that Plaintiff’s paycheck was for just $0.90;
however, Defendants insist that the money was withheld from Plaintiff’s paycheck
“pursuant to the contractual arrangements to reduce her loan balance with
Resource.” (Defs.’ MSJ ¶ 37.) Defendants assert that a condition of Plaintiff’s
return to employment with Resource was that she repay her debt to Defendants.
(Doc. # 33-6 (“Ms. Nwabuisi Decl.”) ¶ 7.) The loan documents Plaintiff signed
stated that Resource “may deduct money from [Plaintiff’s] pay from time to time”
to make “installment payments on loans or wage advances given to [Plaintiff] by
[Resource]” and that “if there [was] a Balance remaining when [Plaintiff] le[ft] the
Company, the last paycheck . . . may be withheld to offset the Balance of money
owed . . . .” (See Pl.’s MPSJ Exs. F, G.) Defendants claim that “this pay check
was insufficient to cover the entire loan” but that “Resource wrote off the balance.”
(Defs.’ MSJ ¶ 37.)
Plaintiff, however, contends in her sworn affidavit that repaying the
loans was not a term of her being rehired. (Doc. # 35-1 (“Pl.’s Nov. 29
7
Decl.”) ¶ 13.) Moreover, Plaintiff asserts that she has fully repaid both loans.
(Doc. # 33-3 at 11.) In light of Plaintiff’s sworn statements, there is a genuine
dispute of material fact regarding whether or not Defendants were authorized to
deduct $1,322.00 from Plaintiff’s paycheck—and, accordingly, whether or not
Defendants paid Plaintiff the minimum wage for this pay period. Therefore,
summary judgment on this claim is denied.
B. FLSA Overtime Claim
Plaintiff alleges that Defendants violated 29 U.S.C. § 207 when they
willfully failed to pay her overtime for each hour that she worked in excess of forty
hours in a workweek. (FAC ¶ 5.4.) Plaintiff’s overtime claim is based on: “(1)
overtime hours worked that are reflected in Plaintiff’s time cards that are
uncompensated in Plaintiff’s pay checks”; (2) “uncompensated work time
associated with responding to calls during evenings and weekends to coordinate
patient visits”; (3) unpaid compensable time spent engaging in marketing activities
with Defendants and attendance at events at Defendants’ request; and (4) “unpaid
hours spent performing provider visits.” (Doc. # 35 at 2.) Defendants move for
summary judgment on this claim, arguing that Plaintiff has not substantiated her
claims that she worked any overtime hours. (Defs.’ MSJ ¶¶ 3, 8–10, 15–22.) As
described in more detail below, however, Defendants have not met their burden of
showing that there is no genuine issue as to whether Plaintiff worked more than 40
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hours in a week. In fact, quite the opposite is true: Plaintiff has shown that there is
no genuine dispute that, on at least some occasions, she did work more than 40
hours per week.
1. Overtime Under the FLSA
The FLSA provides that “no employer shall employ any of his
employees . . . for a workweek longer than forty hours unless such employee
receives compensation for his employment in excess of the hours above specified
at a rate not less than one and one-half times the regular rate at which he is
employed.” 29 U.S.C. § 207(a)(1). The Act defines “employ” as including “to
suffer or permit to work.” 29 U.S.C. § 203(g). “The broad meaning that has
emerged from Supreme Court cases describes work as exertion or loss of an
employee’s time that is (1) controlled or required by an employer, (2) pursued
necessarily and primarily for the employer’s benefit, and (3) if performed outside
the scheduled work time, an integral and indispensable part of the employee’s
principal activities.” Chao v. Gotham Registry, Inc., 514 F.3d 280, 285 (2d Cir.
2008) (citations omitted). “[A]n employer’s actual or imputed knowledge that an
employee is working is a necessary condition to finding the employer suffers or
permits that work.” Id.
“An employee bringing an action pursuant to the FLSA, based on
unpaid overtime compensation, must first demonstrate that she has performed work
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for which she alleges she was not compensated.” Harvill v. Westward Commc’ns,
L.L.C., 433 F.3d 428, 441 (5th Cir. 2005); see also Reeves v. Int’l Tel. and Tel.
Corp., 616 F.2d 1342, 1351 (5th Cir. 1980) (holding that FLSA plaintiff must
show, “with definite and certain evidence, that he performed work for which he
was not properly compensated”), abrogated on other grounds by McLaughlin v.
Richland Shoe Co., 486 U.S. 128 (1988). As the Supreme Court has explained:
[A]n employee has carried out his burden if he proves that he has in fact
performed work for which [she] was improperly compensated and if he
produces sufficient evidence to show the amount and extent of that work as a
matter of just and reasonable inference. The burden shifts to the employer to
come forward with evidence of the precise amount of work performed or
with evidence to negative the reasonableness of the inference to be drawn
from the employee’s evidence. If the employer fails to produce such
evidence, the court may then award damages to the employee even though
the result may only be approximate.
Anderson v. Mount Clemens Pottery Co., 328 U.S. 680, 687–88 (1946)).
“Evidence of hours worked need not be ‘perfectly accurate’ as long as it provides
‘a sufficient basis to calculate the number of hours worked by each employee.’”
Colindres v. QuietFlex Mfg., 427 F. Supp. 2d 737, 752–53 (S.D. Tex. 2006)
(quoting Marshall v. Mammas Fried Chicken, Inc., 590 F.2d 598, 598 (5th Cir.
1979)).
2. Resource’s Overtime Policy
Plaintiff has produced a copy of Resource’s written Payroll Policy,
which states: “This Organization does not pay overtime (to providers) or time and
10
a half. It is within your rights to choose not to work overtime. All hours worked
over forty hours (office employees) will be paid as none [sic] overtime hours.”
(See doc. # 34-6.) Defendants do not deny that this is a true and accurate copy of
the Payroll Policy; instead, they insist that this aspect of the payroll policy did not
apply to Plaintiff, who Defendants claim was “a nurse and . . . not a ‘provider.’”
(See doc. # 36 ¶ 6; see also Nwabuisi Decl. ¶ 5.) In other words, some of
Defendants’ statements insinuated that Plaintiff, as a nurse, was indeed paid at a
rate of time-and-a-half for any overtime hours she worked.
In light of the other materials Defendants themselves produced,
however, it is clear that what Defendants mean is not that Resource pays nurses
overtime whenever they work more than 40 hours per week; it is that Resource
pays a nurse overtime only if that nurse obtained written authorization from
management to work those hours. Defendants’ own Exhibit 3, which is a summary
of “importan[t]” company policies, states: “The company does not pay over time
[sic]. Anyone staying over after [sic] hours or before hours must get authorization
from management in writing.” (Doc. # 33-9; see also Defs.’ MSJ ¶ 19 (“[Plaintiff]
is not a provider but an LVN. Resource does not allow overtime for LVNs except
with managerial written consent.”).) In other words, if a nurse works overtime
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hours without such prior authorization, he or she is not paid at a rate of
time-and-a-half. (See Nwabuisi Dep. at 109–113.1)
While an employer does not violate the FLSA merely by discouraging
employees from working overtime or by requiring employees to request overtime
hours, see Von Friewalde v. Boeing Aerospace Operations, Inc., 339 F. App’x 448,
459 (5th Cir. 2009) (rejecting “the notion that an employer does not have the right
to require an employee to adhere to its procedures for claiming overtime”), having
such a policy does not immunize an employer from responsibility for paying
overtime if the employer knows or should know that the employee is, in fact,
working overtime hours. See id. at 460 (holding that an employer’s “policy against
unauthorized overtime offer[ed] no defense” where “his managers were clearly
aware that [the employee] was working overtime”); Newton v. City of Henderson,
47 F.3d 746, 748 (5th Cir. 1995) (“An employer who is armed with [knowledge
that an employee is working overtime] cannot stand idly by and allow an employee
1
“Q: What would happen if somebody did work overtime? A: They have to get
permission to work overtime. Q: Uh-huh. And if they worked overtime how
would they be paid? A: I will not answer that. Q: Do you know the answer to that
question? A: I know the answer. They would be paid the time that they have.
They don’t have any need to work overtime. [. . .] Q: So if somebody worked over
40 hours in a week they would be paid overtime? A: With authorization. Q: If
they—if they were working without authorization, then they wouldn’t be paid? A:
They have no need to do that. [. . .] Q: When you say they have not had the need
to do that, does that mean it’s never ever happened in the entire existence of the
organization? A: To the best of my knowledge they work their normal eight
hours.”
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to perform overtime work without proper compensation, even if the employee does
not make a claim for the overtime compensation.”) (alteration in original; citation
and internal quotation marks omitted); 29 C.F.R. § 785.13 (“[I]t is the duty of the
management to exercise its control and see that the work is not performed if it does
not want it to be performed . . . . The mere promulgation of a rule against such
work is not enough. Management has the power to enforce the rule and must make
every effort to do so.”). Accordingly, Plaintiff is entitled to overtime
compensation for any overtime hours Defendants knew or should have known she
worked.
3. Defendants Had Actual or Constructive Knowledge That Plaintiff
Worked More than 40 Hours During Some Weeks
Apparently recognizing that Plaintiff is entitled to overtime
compensation for hours about which they had actual or constructive knowledge,
Defendants argue not that Resource did pay Plaintiff overtime but that Plaintiff
“cannot show with definite and certain evidence that she actually worked any
unpaid overtime” or “that Resource knew or should have known about this alleged
overtime.” (Defs.’ MSJ ¶ 27.) As described in more detail below, however, there
is no genuine dispute that Defendants knew or should have known that Plaintiff, at
least on some occasions, worked more than 40 hours per week.
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Defendants insist that Plaintiff has submitted no time cards
demonstrating that she worked in excess of 40 hours per week. (Id. ¶ 29.)
However, Plaintiff has submitted a sampling of time sheets and payroll checks that
indicate that she worked more than 40 hours during various weeks and yet was
paid at her normal rate for those extra hours. For example, reducing the time
clocked each day by thirty minutes for a lunch break, Plaintiff clocked a total of
83.25 hours during the weeks of May 17–21 and May 23–29, 2010 (see
doc. # 33-10 at 18; doc. # 35-3 at 2). The corresponding paycheck, however,
indicates that Plaintiff was paid at her normal rate of $17.31 per hour even for the
overtime hours she worked, not at time-and-a-half. (Doc. # 35-3 at 13.) Similarly,
according to the time cards that Defendants submitted, Plaintiff clocked a total of
42.25 hours for the week of June 7–11. (Doc. # 33-10 at 19.) Again, however, the
corresponding paycheck indicates that she was paid for all hours at her normal rate.
(Doc. # 35-3 at 14.) While hand-written alterations to some of Plaintiff’s other
time cards make it difficult to discern exactly how many hours Plaintiff clocked in
those weeks (see, e.g., id. at 9, 11), many of the paychecks she submitted indicate
that she was paid for more than 40 hours each week but never at an overtime rate.
(See, e.g., id. at 12, 16.) In any case, Defendants—who presumably have easier
access to the relevant documents—have not argued or presented any evidence to
14
suggest that the time cards or payroll documents Plaintiff has produced are
inaccurate.
Defendants claim in their pleadings that Plaintiff never complained
about the wages allegedly missing from her paycheck. (MSJ ¶ 11; doc. # 36 ¶ 3(c),
(h).) However, Defendants have submitted no sworn declarations in support of
that contention. Plaintiff, on the other hand, asserts in her sworn declaration that
she “spoke with Defendant Rose Nwaibuisi [sic] approximately a dozen times
regarding not being paid for overtime hours worked” and was told “not to worry,
that [she] would be compensated for [her] labor.” (Pl.’s Nov. 29 Decl. ¶ 12.)
Even assuming that Plaintiff never explicitly requested overtime
compensation, however, Defendants’ claims that they were unaware of any
overtime hours that Plaintiff worked are insufficient to prevent summary judgment
against them on this issue. As already described, Plaintiff had submitted to
Resource at least three time cards, using Defendants’ own clock-in/clock-out
system, that showed that she worked more than 40 hours in a week. There is no
dispute that those same cards were then used to calculate her pay: Even
Defendants’ own Exhibit 4, which is a summary of the hours Plaintiff worked and
the hours for which she was compensated, states clearly that Plaintiff more often
than not worked more than 40 hours each week. (See doc. # 33-10 (indicating in a
15
column titled “# of hrs for pay period” that Plaintiff almost always worked 88
hours every two weeks).)
This is not a case in which an employee secretly worked overtime
hours and never recorded them on her time sheets. Cf. Brumbelow v. Quality
Mills, Inc., 462 F.2d 1324, 1327 (5th Cir. 1972) (affirming judgment for employer
because employee was estopped from claiming that she had worked more hours
than she claimed in her time sheets); Forrester v. Roth’s I.G.A. Foodliner, Inc., 646
F.2d 413, 414 (9th Cir. 1981) (affirming summary judgment for employer because
employee did not demonstrate that employer should have known that he worked
more hours than those claimed on his time sheets). Instead, Defendants had plain
and clear evidence, in the form of Plaintiff’s automated time cards, that Plaintiff
had worked more than 40 hours during at least some weeks. Plaintiff’s paychecks
compensated her for more than 40 hours per week (though not at overtime rates),
indicating that Resource was, indeed, aware that Plaintiff had worked more than 40
hours. Even assuming Plaintiff did not complain about overtime compensation,
therefore, there is no genuine dispute that Defendants knew or should have known
that Plaintiff had worked more than 40 hours in some weeks. See Brennan v. Gen.
Motors Acceptance Corp., 482 F.2d 825, 827 (5th Cir. 1973) (holding that a court
“need only to inquire whether the circumstances of the present case were such that
the employer either had knowledge . . . or else had the ‘opportunity through
16
reasonable diligence to acquire knowledge’”) (quoting Gulf King Shrimp Co. v.
Wirtz, 407 F.2d 508, 512 (5th Cir. 1969)).
Plaintiff also asserts that she worked many hours each week that were
not reflected in her time cards and for which she was not paid overtime.
(Doc. # 34-2 (“Pl.’s Nov. 8 Decl.”) ¶ 9.) First, Plaintiff insists in her sworn
declaration that she “made approximately five [home] visits before normal
business hours . . . eight to ten visits after normal business hours, and four to five
visits each weekend” (id.)—on average, over ten more each week than Defendants
paid her for. (Pl.’s MPSJ at 8.) In light of the foregoing, Plaintiff asserts that she
“routinely worked from approximately 7:00 am to 9:00 pm or 10:00 pm from
Monday to Friday during [her] employment with Defendants.” (Id. ¶ 12.)
Moreover, even though Defendants paid a flat fee of $25 or $30 per home visit,
Plaintiff asserts that this flat fee (Defs.’ MSJ ¶¶ 6–7.), when divided by the actual
number of hours she worked, “was substantially less than one-and-a-half times her
regular rate.” (Pl.’s MPSJ at 8.)
Plaintiff also asserts in her sworn declaration that Defendants gave her
a company-issued cell phone that rang multiple times per day, including before and
after her normally scheduled 8:30 a.m.–5:00 p.m. shift and on the weekends. (Pl.’s
Nov. 29 Decl. ¶ 4.) Plaintiff asserts that she was not compensated for the time she
spent answering these calls. (Id.) “On Saturdays and Sundays,” she asserts, she
17
“was on call twenty-four hours per day to respond to individual’s [sic] urgent
calls”; and she estimates that she worked “between six and eight hours each
weekend . . . .” (Id.) Finally, Plaintiff claims that she was not paid overtime for
hours spent, inter alia, attending marketing events with Defendants and driving
Defendants to and from the airport. (Pl.’s Nov. 8 Decl. ¶ 8.)
In response, Defendants insist that Plaintiff was paid for all patient
visits she performed. Defendants point out that LVNs are required to submit
Patient Visit Records for each patient visit they perform; they insist that Plaintiff
submitted many such records (see Ms. Nwabuisi Decl. Ex. 5) and “was paid for all
patient visit[s] pursuant to every Patient Visit Record[] [she] submitted . . . .”
(Defs.’ MSJ ¶ 29.) Defendants argue that Plaintiff never complained about not
being paid while she worked for Resource or even after she voluntarily resigned
but “now contends or ‘remembers’ through speculation that there are some 1800
hours from June 2009 to November 2010 where she worked overtime” without
compensation. (Id.; Nwabuisi Dep. at 100.) Moreover, Defendants insist that even
if Plaintiff did perform patient visits for which she was not paid, she “has presented
no evidence that Resource knew or should have known about the overtime she
purposefully failed to report or document.” (Defs.’ MSJ ¶ 33.)
For the reasons already given, whether Plaintiff complained about not
being paid overtime is irrelevant to Defendants’ liability if they knew or should
18
have known about the hours she was working, and Defendants have proffered no
competent summary judgment evidence to support their claim that they were
unaware of the overtime hours Plaintiff worked. Remarkably, Defendants did not
even submit sworn testimony denying that Plaintiff worked on evenings and
weekends coordinating patient visits, attending marketing events, and receiving
phone calls. Instead, in response to Plaintiff’s sworn testimony, Defendants
proffer only blanket denials as to overtime hours worked (see, e.g., Defs.’
MSJ ¶ 33; doc. # 36 ¶¶ 7–8), and Ms. Nwabuisi, in her deposition, conceded that
Plaintiff did regularly accompany her and Mr. Nwabuisi to lunch and dinner
meetings. (Nwabuisi Dep. at 48–51; 76–77.) Accordingly, the Court denies
Defendants summary judgment on Plaintiff’s overtime claim and instead grants
Plaintiff summary judgment on the following issues: (1) that Defendants knew or
should have known that Plaintiff, at least on occasion, worked more than 40 hours
per week; and (2) that under the FLSA Plaintiff was entitled to overtime
compensation for those hours.
C. FLSA Retaliation Claim
Plaintiff amended her Complaint in order to add a claim for
retaliation, alleging that “Defendants intentionally retaliated against Plaintiff
because she engaged in activity protected by the FLSA . . . .” (FAC ¶ 6.2) The
Complaint was devoid of any factual allegations and merely recited the elements of
19
a retaliation claim. (See FAC ¶¶ 6.1–6.5.) In her Response to Defendants’
Motion, however, Plaintiff explained that “[s]hortly after applying [to Maxim
Staffing Solutions], Plaintiff’s former colleague, Henry Coulston, called Plaintiff
and told her Defendants were blackballing her.” (Doc. # 35.) This is the only
evidence Plaintiff has provided in support of this claim.
Plaintiff’s evidence is insufficient to withstand a motion for summary
judgment for multiple reasons. First, it is well settled that “the admissibility of
summary judgment evidence is subject to the same rules of admissibility applicable
to a trial.” Pegram v. Honeywell, Inc., 361 F.3d 272, 285 (5th Cir. 2004) (quoting
Resolution Trust Corp. v. Starkey, 41 F.3d 1018, 1024 (5th Cir. 1995)). The
burden is on the proponent to show by a preponderance of the evidence that the
material is admissible as presented or to explain the admissible form that is
anticipated. Fed. R. Civ. P. 56 advisory committee’s notes. As currently
presented, Plaintiff’s only piece of evidence—Henry Coulston’s alleged
statement—is inadmissible hearsay. (See doc. # 35 at 17 (“Shortly after applying,
Plaintiff’s former colleague, Henry Coulston, called Plaintiff and told her
Defendants were blackballing her.”).) Plaintiff does not explain what the basis of
Mr. Coulston’s knowledge is or explain whether he would be able to testify that he
has personal knowledge that Defendants were blackballing Plaintiff. Plaintiff’s
counsel admitted at the hearing that Mr. Coulston’s deposition had not been taken.
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Accordingly, Plaintiff has not met her burden of showing by a preponderance of
the evidence that Mr. Coulston’s statement is admissible as presented or to explain
the admissible form that is anticipated as required by Federal Rule of Civil
Procedure 56. See Fed. R. Civ. P. 56 advisory committee’s notes.
Aside from Mr. Coulston’s statement, which will not be considered
for the reasons described, Plaintiff has provided no evidence in support of her
retaliation claim. “Unsubstantiated assertions, improbable inferences, and
unsupported speculation are not sufficient to defeat a motion for summary
judgment.” Brown v. City of Houston, 337 F.3d at 541. All Plaintiff has presented
is speculation that the reason she has had trouble obtaining employment is because
Defendants are “blackballing” her; this is not sufficient to defeat a motion for
summary judgment. Accordingly, the Court grants Defendants summary judgment
on Plaintiff’s retaliation claim.
D. Claims Under the Texas Minimum Wage Act
Plaintiff’s claims under the Texas Minimum Wage Act (“TMWA”),
Tex. Lab. Code § 62.201, are based on the same facts she asserts in support of her
minimum-wage claim under the FLSA. However, The TMWA expressly provides
that its provisions “do not apply to a person covered by the Fair Labor Standards
Act of 1938 (29 U.S.C. Section 201 et seq.).” Tex. Lab. Code § 62.151. There is
no dispute that Plaintiff is covered by the FLSA. Accordingly, Plaintiff is not
21
covered by the TMWA, and the Court grants Defendants summary judgment on
this claim.
E. Common-Law Claims
Plaintiff’s final cause of action is one for common-law breach of
contract. (FAC ¶¶ 8.1–8.7.) The Amended Complaint merely recites the elements
of a breach-of-contract claim and is devoid of any factual allegations that might
explain what the basis of this claim is. (See id.) However, in her Response to
Defendants’ Motion for Summary Judgment, Plaintiff explains that “Defendants
contracted with [her] and agreed to compensate [her] for all hours worked” and
that they breached the contract by failing to correctly compensate her.
(Doc. # 35 at 18.)
Defendants move for summary judgment on the ground that “it would
be [Plaintiff] who breached this contract first in time” by failing to submit accurate
time cards and Patient Visit Records. (Defs.’ MSJ ¶ 38.) However, the Court need
not determine whether there exists a genuine issue of material fact regarding
whether either party breached the contract between them, because—as Plaintiff’s
counsel conceded at the hearing—Plaintiff’s state-law breach-of-contract claim is
preempted by her FLSA claims.
“Courts within this circuit and other circuits that have addressed the
issue have concluded that state law claims are preempted by the FLSA to the
22
extent the plaintiff seeks damages for unpaid minimum wages or unpaid overtime
compensation.” Coberly v. Christus Health, 829 F. Supp. 2d 521, 525 (N.D. Tex.
2011) aff’d sub nom. Coberly v. Health, 490 F. App’x 643 (5th Cir. 2012)
(collecting cases). Plaintiff’s breach-of-contract claim is based on allegations that
“Plaintiff was not fully compensated for all hours worked” (doc. # 35 at 18), and
Plaintiff argues that this Court should not grant Defendants summary judgment on
her breach-of-contract claim because “[t]here is a genuine dispute of material fact
. . . regarding whether or not Plaintiff was compensated for all hours worked.”
(Id.) This is merely a restatement of the claims Plaintiff brings under the FLSA.
Because Plaintiff’s breach-of-contract claim is preempted by the FLSA, the Court
grants summary judgment in favor of Defendants on that claim.
II.
Plaintiff’s Motion for Partial Summary Judgment
Plaintiff’s Motion for Partial Summary Judgment requests that the
Court grant her summary judgment on the following issues:
1) Whether or not, as a matter of law, Plaintiff is entitled to overtime
compensation and liquidated damages;
2) Whether or not, as a matter of law, Rose Nwabuisi is individually liable;
3) Whether or not, as a matter of law, Augustine Nwabuisi is individually
liable; and
4) Whether or not, as a matter of law, Defendants’ violation of the FLSA was
willful, thereby entitling Plaintiff to claim damages for a three-year period.
23
(Pl.’s MPSJ at 2.) Plaintiff explains that she “is not seeking summary judgment on
Defendant’s total liability” but merely on the four discrete issues listed. (Pl.’s
MPSJ at 16.) For the reasons that follow, the Court grants Plaintiff’s Motion.
A. As a Matter of Law, Plaintiff Is Entitled to Overtime Compensation and
Liquidated Damages
As Defendants’ counsel reiterated at the hearing, there is no dispute
that Plaintiff is an employee entitled to the protections of the FLSA. (See also
doc. # 36 ¶ 3(a).) Moreover, for the reasons given above, there is no genuine
dispute that Plaintiff, on at least some occasions, worked more than 40 hours per
week; that Defendants knew or should have known about Plaintiff’s overtime
hours; and that Defendants nevertheless paid Plaintiff her standard hourly rate for
all hours. Accordingly, the Court grants Plaintiff’s Motion insofar as it requests a
declaration that Plaintiff is entitled to overtime compensation as a matter of law,
with the total amount of liability to be determined at trial.
As for Plaintiff’s request for summary judgment on the issue of
liquidated damages, Section 216(b) of the FLSA provides that any employer who
violates the FLSA “shall be liable to the employee . . . in the amount of [her]
unpaid minimum wages, or [her] unpaid overtime compensation, as the case may
be, and in an additional equal amount as liquidated damages.” However, “if [an]
employer shows to the satisfaction of the court that the act or omission giving rise
24
to [the FLSA action] was in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation of the [FLSA], the court may,
in its sound discretion, award no liquidated damages or award any amount thereof
not to exceed the amount specified in section [216(b) of the FLSA].” 29
U.S.C. § 260. “An employer found liable under section 206 or section 207 has the
‘substantial burden’ of proving to the satisfaction of the trial court that its acts
giving rise to the suit are both in good faith and reasonable.” Mireles v. Frio
Foods, Inc., 899 F.2d 1407, 1415 (5th Cir. 1990). As the Fifth Circuit has
explained:
[T]he presumption of willfulness stands, absent positive and compelling
proof of good faith. It is not enough, for instance, to plead and prove
ignorance of the wage requirements. Knowledge will generally be imputed
to the offending employer . . . . Nor does the complete ignorance of the
possible applicability of the [FLSA] shield the employer from liability for
liquidated damages . . . . Good faith requires some duty to investigate
potential liability under the [FLSA] . . . . Lack of good faith is demonstrated
when an employer knows, or has reason to know, that his conduct is
governed by the [FLSA].
Reeves, 616 F.2d at 1353 (internal quotations marks and citations omitted). “Mere
ignorance of the provisions of the [FLSA] is an insufficient ground to defeat the
‘reasonable grounds’ exception authorized by § 260.” Cox v. Brookshire Grocery
Co., 919 F.2d 354, 357 (5th Cir. 1990).
Defendants have provided absolutely no evidence to support a finding
that their violation of the FLSA was in good faith or that they had reasonable
25
grounds for believing that they were not required to pay Plaintiff overtime
compensation when she worked more than 40 hours per week. Instead, Ms.
Nwabuisi conceded in her deposition that Defendants did not consult an
accountant, attorney, or any other professional with knowledge regarding FLSA
compliance even after an employee filed suit against them under the FLSA.
(Nwabuisi Dep. at 64–65.) The outcome of the prior FLSA case is inapposite;
rather, the lawsuit is relevant because it makes clear that Defendants knew or
should have known that their conduct was governed by the FLSA. As described
above, “[l]ack of good faith is demonstrated when an employer knows, or has
reason to know, that his conduct is governed by the [FLSA].” Reeves, 616 F.2d at
1353 (internal quotation marks omitted). Defendants have not met their
“‘substantial burden’ of proving . . . that [their] acts giving rise to the suit are both
in good faith and reasonable.” Mireles, 899 F.2d at 1415. Accordingly, Plaintiff is
entitled to liquidated damages in an amount to be determined at trial.
B. Rose and Augustine Nwabuisi Are Employers Who Are Jointly and
Severally Liable for Plaintiff’s Unpaid Wages to the Extent Resource Is
Under the FLSA, an “‘[e]mployer’ includes any person acting directly
or indirectly in the interest of an employer in relation to an employee and includes
a public agency, but does not include any labor organization (other than when
acting as an employer) or anyone acting in the capacity of officer or agent of such
26
labor organization.” 29 U.S.C. § 203(d). A “‘[p]erson’ means an individual,
partnership, association, corporation, business trust, legal representative, or any
organized group of persons.” Id. § 203(a). Whether a person is an employer under
the FLSA is a question of law, although “subsidiary findings are of fact.” Beliz v.
W.H. McLeod & Sons Packing Co., 765 F.2d 1317, 1327 (5th Cir. 1985). The
definition of “employer” under the FLSA is “expansive,” extending liability to
persons with “managerial responsibilities” and “substantial control of the terms
and conditions of the [employee’s] work.” Donovan v. Grim Hotel Co., 747 F.2d
966, 971 (5th Cir. 1984) (quoting Falk v. Brennan, 414 U.S. 190, 195 (1973)).
Analyzing whether a person is an “employer” under the FLSA “must
focus upon the totality of the circumstances, underscoring the economic realities of
the [employee’s] employment.” Donovan v. Sabine Irrigation Co., 695 F.2d 190,
194 (5th Cir. 1983). “The overwhelming weight of authority is that a corporate
officer with operational control of a corporation’s covered enterprise is an
employer along with the corporation, jointly and severally liable under the FLSA
for unpaid wages.” Grim Hotel Co., 747 F.2d at 972 (quoting Donovan v. Agnew,
712 F.2d 1509, 1511 (1st Cir. 1983)); see Lee v. Coahoma County, Miss., 937 F.2d
220, 226 (5th Cir.1991) (“If an individual with managerial responsibilities is
deemed an employer under the FLSA, the individual may be jointly and severally
liable for damages resulting from the failure to comply with the FLSA.”), modified
27
on other grounds, 37 F.3d 1068 (5th Cir. 1993). A corporate officer need not have
an ownership interest in the company to be liable under the FLSA. See Reich v.
Circle C. Invs., Inc., 998 F.2d 324, 329 (5th Cir. 1993)). Instead, a court must
determine whether the officer “effectively dominates [the company’s]
administration or otherwise acts, or has the power to act, on behalf of the
corporation vis-a-vis its employees.” Sabine Irrigation Co., 695 F.2d at 194–95.
Under this expansive definition, both Ms. and Mr. Nwabuisi qualify
as “employers.” Ms. Nwabuisi is the sole owner of both Resource Health Services,
Inc. and Resource Care Corporation. (Doc. # 34-2 ¶¶ 4, 6; doc. # 33-6 at 15.) She
is also the Nurse Administrator in charge of all the nurses. (Nwabuisi Decl. ¶ 1.)
Ms. Nwabuisi interviewed, hired, and fired Plaintiff; and she directly oversaw
Plaintiff’s work. (Pl.’s MPSJ at 14; Nwabuisi Dep. at 30–31.) Ms. Nwabuisi was
also involved in creating Defendants’ pay practices and had direct control over
Defendants’ compliance with the FLSA. (Nwabuisi Dep. at 96, 110.)
Accordingly, it is clear that she “has the power to act, on behalf of the corporation
vis-a-vis its employees.” Circle C. Invs., Inc., 998 F.2d at 329.
Similarly, as described above, Mr. Nwabuisi is the CEO of both
Resource Health Services, Inc., and Resource Care Corporation. (Defs.’ MSJ ¶ 1.)
Mr. Nwabuisi participated in the interviewing, hiring, and firing of Plaintiff; signed
company checks; authorized deductions from payroll by deciding whom should
28
receive a loan or wage advance; and participated in the creation of Defendants’
system of compensation. (Nwabuisi Dep. at 78–79.) Because Mr. Nwabuisi was
“a corporate officer with operational control of [the] corporation’s covered
enterprise,” Grim Hotel Co., 747 F.2d at 972, he “is an employer along with the
corporation, jointly and severally liable under the FLSA for unpaid wages.” Id.
Accordingly, to the extent that Resource is found liable, both Ms. and Mr.
Nwabuisi are jointly and severally liable as employers under the FLSA.
C. Defendants Willfully Violated the FLSA, Entitling Plaintiff to a
Three-Year Statute of Limitations
Section 255(a) of the FLSA imposes a two-year statute of limitations
for violations of the FLSA. 29 U.S.C. § 255(a). However, the statute of
limitations is extended to three years for a willful violation. Id. To show a willful
violation of the FLSA, the “plaintiff bears the burden of establishing that his
former employers ‘either knew or showed reckless disregard for the matter whether
[their] conduct was prohibited by the statute.’” McLaughlin v. Richland Shoe Co.,
486 U.S. 128, 133 (1988).
Resource is a large, sophisticated company with over 500 employees.
(Nwabuisi Dep. at 24.) It has been in business for over 15 years and has to comply
with complicated governmental codes, such as the Texas Health and Safety Code.
(Id. at 11.) For the reasons given above, Defendants were on notice that their
29
actions were governed by and potentially violated the FLSA, and yet they failed to
take steps—such as securing legal advice from a competent professional—to
ensure Resource’s compliance with the Act. See Reich v. Bay, Inc., 23 F.3d 110,
117 (5th Cir. 1994) (“Continuing the payment practices without further
investigation into the alleged violation could constitute ‘reckless disregard’ of the
FLSA.”); cf. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 130 (1985)
(finding no willfulness where the employer “sought legal advice and consulted
with the Union” and where the parties, “in focusing on the larger overall problem,
simply overlooked the challenged aspect of the plan”); Halferty v. Pulse Drug Co.,
Inc., 826 F.2d 2, 3–4 (5th Cir. 1987) (finding no willfulness where employer
“consulted with its attorney, and examined the DOL bulletin discussing 29 C.F.R.
§ 785.23”). Furthermore, Defendants emphasized over and over again in official
Resource publications that the company did not pay overtime, indicating that they
were aware of overtime requirements generally and were seeking to avoid them.
Accordingly, the Court concludes that Defendants either knew or acted with
reckless disregard as to whether their policies were in violation of the FLSA,
entitling Plaintiff to a three-year statute of limitations.
30
CONCLUSION
For the reasons given, the Court GRANTS IN PART AND DENIES
IN PART Defendants’ Motion for Summary Judgment (doc. # 33) and GRANTS
Plaintiff’s Motion for Partial Summary Judgment (doc. # 34).
IT IS SO ORDERED.
DATED: San Antonio, Texas, May 10, 2013.
_____________________________
David Alan Ezra
Senior United States District Judge
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