Acosta, Secretary of Labor, United States Department of Labor v. Medical Staffing of America, LLC et al
Filing
324
MEMORANDUM OPINION AND ORDER - the Court FINDS Defendant liable for failing to pay overtime and maintain pay records in accordance with the FLSA. Accordingly, JUDGMENT IS ENTERED FOR PLAINTIFF, and Defendants are ENJOINED from committing further vio lations of the FLSA. Plaintiff is ORDERED to provide the Court with an updated calculation of back pay and liquidated damages within 60 days of the date of this opinion. Defendants are ORDERED to cooperate with Plaintiff by providing Plaintiff with all information necessary for compliance with this order. Signed by District Judge Raymond A. Jackson on 1/13/2022. (tamarm, )
FILED
IN THE UNITED STATES DISTRICT COUR
FOR THE EASTERN DISTRICT OF VIRGINl
Norfolk Division
CLERK, U.S. DISTRICT COURT
NORFOLK, VA
MARTIN J. WALSH,
SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,
Plaintiff,
JAN 1 4 2.■^2
Case No. 2:18-cv-226
Case No. 2:19-cv^75
MEDICAL STAFFING OF AMERICA,LLC, d/b/a
STEADFAST MEDICAL STAFFING, and LISA
PITTS,
Defendants.
MEMORANDUM OPINION AND ORDER
The Court issues this Memorandum Opinion and Order after a bench trial in the abovestyled matter to resolve the U.S. Department of Labor's ("Plaintiff or "DOL") claims against
Medical Staffing of America, LLC, d/b/a Steadfast Medical Staffing, and Lisa Pitts ("Defendants")
for failing to pay overtime and maintain pay records in accordance with the Fair Labor Standards
Act ("FLSA"), as amended, 29 U.S.C. § 201, et seq. For the reasons below, the Court FINDS that
the nurses employed by Defendants are employees of Defendants. Accordingly, the Court FINDS
Defendants liable for violating the FLSA and enters judgment for Plaintiff.
I.
PROCEDURAL HISTORY
On May 2, 2018, Plaintiff filed the Complaint in this matter, initiating an enforcement
action against Defendants for willfully misclassifying their workers as independent contractors
and violating the FLSA. Complaint ("Compl."), ECF No. 1. Defendants answered the Complaint
on July 11,2018. Answer, ECF No. 8. On July 23, 2020, after full briefing by the parties, the Court
denied the parties' cross-motions for summary judgment. Summary Judgment Order ("Summ. J.
Or."), ECF No. 251. The Court held a bench trial, which commenced on August 31, 2021. Note,
ECF No. 301-311. The parties filed post-trial briefs, and this matter is now ripe for judicial
determination. The Court issues the following Findings of Fact and Conclusions of Law, as
required by Rule 52(a) of the Federal Rules of Civil Procedure.
II.
A.
FINDINGS OF FACT
Stipulated Facts
The parties have stipulated to the following facts, which the Court accepts and finds:
1.
Since at least August 18, 2015, Steadfast Medical Staffing ("Steadfast") has been a
limited liability corporation with a place of business at 5750 Chesapeake
Boulevard, Norfolk, Virginia 23513, and under the ownership of Lisa Ann Pitts
("Ms. Pitts"). Id. at 2. Joint Pretrial Or.("J. Pretrial Or."), ECF No, 261 at 1.
2.
Since at least August 18, 2015, Steadfast has had an annual gross volume of sales
made or business done of not less than $500,000.00. Id.
3.
The individuals listed in Schedule A were paid straight-time hourly for all hours
worked, including for all hours worked over 40 hours in a workweek. Id.
4.
Lisa Pitts has maintained 100% ownership interest in Medical Staffing of America,
LLC since at least August 2015. Id.
5.
Since August 18, 2015, Steadfast has negotiated and established contracts with
healthcare facilities. J. Pretrial Or. at 2.
6.
Steadfast's negotiated contracts established an hourly rate Steadfast would receive
for placing nurses, including the individuals listed in Schedule A. Id.
7.
Since August 18, 2015, "Medical Staffing of America" appears on the earnings
statements of individuals listed in Schedule A. Id.
B.
Additional Factual Findings
The Court makes the following additional factual findings (unless otherwise noted, the
facts below are reflective of Defendants' business practices since August 18, 2015):
Steadfast Relationship with the Nurses
1.
Lisa Pitts is responsible for the day-to-day operations of Medical Staffing of
America, LLC ("Steadfast"). Trial Transcript ("Tr.") at 517:25-518:5.
2.
Steadfast is a nursing registiy that maintains a database of licensed nurses and
connects those nurses with work opportunities at healthcare facilities. Tr. at 23:911, 227:14-15, 514:5-16, 520:6-19, 907:1-6; Plaintiffs Trial Exhibit("PX")24.
3.
Specifically, Steadfast receives staffing requests from healthcare facilities with
which it has contracted ("client-facilities" or "facilities"), identifies nurses on its
registry who satisfy the facilities' needs, then provides the nurses with the
opportunity to accept or reject assignments (or "shifts") with those facilities. J.
Pretrial Or. at 2; Tr. at 907:1-6, 920:4-921-4, 945:11-946:12, 947:1 1-948:16;
Defendants' Trial Exhibit("DX")58-59.
4.
The individuals listed in Schedule A of the Complaint include individuals who
worked for Steadfast as Certified Nursing Assistants ("CNA"), Licensed Nurse
Practitioners ("LPN"), and Registered Nurses ("RN")' at some point between
August 18, 2015 and June 27, 2021. Tr. at 55:13-18, 86:7-9, 114:1-6, 520:5-19;
Tenth Revised Schedule A, ECF No. 287 at Ex. 1; PX-7; PX-7a; PX-21; PX-22;
PX-24.
' The Certified Nursing Assistants ("CNA"), Licensed Nurse Practitioners ("LPN"), and Registered Nurses
("RN")listed in Schedule A arc hereinafter referred to as "nurses."
5.
Steadfast compensated the nurses for work performed on behalfofor for the benefit
of Defendants at some point between August 18, 2015 and June 27, 2021. PX-7;
PX-7a; PX-8; PX-22.
6.
Steadfast does not pay the nurses overtime (a rate of one and one-half times their
regular rate of pay for hours worked over 40 hours in a week). Tr. at 32:23-25,
94:21-25, 95:1-6, 121:12-17, 176:7-10, 200:22-25,231:11-20,316:9-20, 551:114, 677:17-23; PX-7; PX-7a.
7.
Steadfast pays the nurses straight-time for all hours worked (except for holidays).
Tr. at 527:11-15, 551:10-25; PX-21.
8.
"Medical Staffing America" appears on the nurses' paystubs and earnings
statements. Joint Pretrial Statement("J. Pretrial Statement"), ECF No. 84 at 2.
9.
The nurses provide staffing services for businesses located across state lines. Tr. at
128:11-17, 820:6-9.
10.
The nurses render services that are integral to Steadfast's business. Joint Pretrial
Statement. J. Pretrial Statement at 2.
11.
The nurses do not have opportunities for profit or loss depending on their
managerial skill. Tr. at 292:18-20, 317:13-15; PX-17.
12.
The nurses do not own their own businesses and have not advertised their services.
Tr. at 92:8-12, 140:25-141:5, 176:25-177:5, 290:18-23; 715:10-716:3.
13.
Steadfast classifies the nurses on its registry as independent contractors. Tr. at
522:11-17.
14.
Before a nurse is added to Steadfast's registiy, the nurse is required to complete an
application that includes questions about the nurse's employment history, skill set,
and references. Tr. at 87:14-88:13; PX-26. Steadfast repeatedly refers to itself as
an "employer" and the nurses as "employees" in the application. PX-26. Steadfast
occasionally refers to the application as an "application for employment" in the
application and related documents. Id.
15.
Steadfast also pays for the nurses to undergo a credentialing process, in which
Steadfast(1) performs a background check;(2) confirms that the nurse is properly
licensed;(3)conducts a drug screening and tuberculosis test;(4) has the nurse sign
a Health Insurance Portability and Accountability Act ("HIPAA") compliance
form; and (5) confirms that the nurse has a negative COVID test or proof of
vaccination. Tr. at 246:3-10, 282:2-19, 289:24-25, 290:1-2, 916:24-917:1 1; J.
Pretrial Statement at 2.
16.
Once a nurse applies and passes the credentialing process. Steadfast enters into an
"independent contractor" agreement with the nurse and adds the nurse to its
registry. Tr. at 522:11-17, 1009:8-10; PX 25.
17.
Nurses must obtain and maintain their own licensure. Tr. at 83:23-25, 84:15-18,
99:5-10, 184:24-185:4, 211:6-17. Steadfast does not pay for or reimburse nurses
for licensing or educational expenses. Tr. at 83:4-8.
18.
Once a nurse is added to Steadfasfs registry. Steadfast trains the nurse on the
following topics: HIPAA compliance, substance abuse, and harassment. Tr. at
66:7-25; PX-32.
19.
The nurses are also covered under Steadfast's insurance policy, and Steadfast is
responsible for processing all workers' compensation claims for any injuries the
nurses incur while working at a facility. Tr. at 42:25-43:15; PX-28.
20.
Steadfast does not have an "employee handbook." Tr. at 919:15-16.
21.
Nurses on Steadfast's registry are required to wear badges bearing the name,
"Steadfast Medical," while working at client-facilities. Tr. at 72:16-73:3, 99:25100:5, 124:14-20.
22.
Steadfast does not provide the nurses with any equipment. Tr. at 84:1-14, 98:8-16,
635:1-3, 682:19-21, 700:16-19, 812:5-8.
23.
During the 2020-2021 COVID-19 pandemic lockdowns. Steadfast provided the
nurses with letters that the nurses could present to government officials, permitting
them to travel to work. Tr. at 1002:12-1003:25.
24.
Steadfast's relationship with the nurses is permanent in nature, even if a term limit
is stated in a nurse's contractor agreement. See e.g. Tr. at 86:5-11,81 1:19-25; PXII; PX-16; PX-25.
25.
Steadfast maintains "employee change" forms for the nurses that document each
nurse's "hire/term date" and "tax jurisdiction." PX-16.
26.
Steadfast's agreements with the nurses include "non-competition" clauses, in which
the nurses are prohibited from working for Steadfast's competitors without
Steadfast's express, written consent. PX-10; PX-12; PX-25.
27.
The nurses are not permitted to hire other nurses, employees,or contractors to work
for them at client-facilities. Tr. at 73:24-74:7, 122:15-25, 141:12-18, 270:7-16,
823:23-824:5.
28.
Steadfast identifies available shifts and then communicates with nurses regarding
available shifts via phone, email, text, and/or a mobile application that Steadfast
launched in January 2021 to digitize the scheduling process (the "Zira app"). Tr. at
74:8-13, 96:12-16, 744:7-745:9.
29.
In the Zira app. Defendants are notified whenever a nurse accepts a shift, and
Defendants can edit/decline shifts. Tr. at 800:23-801:2.
30.
Because Steadfast gives nurses the opportunity to accept or decline shifts, the
nurses do not have a start date or set work schedule. See e.g. Tr. at 128:14-129:16,
189:5-12, 210:6-18, 238:17-239:1 1, 266:23-25, 284:4-7, 298:16-20, 702:10-
704:18, 851:3-21,945:5-946:1.
31.
Steadfast does not require the nurses to work a minimum number of hours or
prohibit the nurses from exceeding a maximum number of hours. Tr. at 638:21-23,
662:19-21, 685:7-23, 705:11-16, 817:7-9.
32.
The nurses must notify and/or obtain approval from Steadfast, not client-facilities,
when they are running late to a shift, want time off, are sick, or othewise cannot
complete a shift. Tr. at 37:15-38:5, 70:13-72:11,95:7-23, 121:24-22:11, 335:18338:20, 1035:13-17.
33.
Steadfast determines the nurses' hourly pay rate, and nurses cannot negotiate their
pay rate with Steadfast unless changing the rate would benefit Steadfast. Tr. at
29:8-25,61:3-11,74:8-13,96-12-16, 116:2-6, 144:15-22, 151:8-17, 198:18-23,
203:20-21,210:22-211:5,217:10-22,222:13-19,229:15-25,232:15-18,246:1319, 292:1-5,330:19-24.
34.
The nurses on Steadfast's registry can only increase their wages by working more
hours. Tr. at 247:2-20, 252:1-11, 284:8-13, 674:21-23.
35.
Steadfast is solely responsible for compensating the nurses and handling any
compensation related issues, including wage garnishments. Tr. at 33:19-35:6,
97:19-24,93:5-11, 138:22-24, 184:4-6, 199:6-8,222:20-25,286:16-18,292:1417, 293:24-25, 297: 22-24, 33:19-34:10, 377:5-18, 531:22-532:11, 595:6-22,
673:18-21; PX-7a; PX-8; PX-19,PX-21-22.
36.
Steadfast pays the nurses an hourly rate from their own financial accounts on a
weekly basis. Since April 2019, Steadfast has provided nurses the option to be
compensated on an expedited basis via a program called,"Next Day Pay" or"NOP"
Tr. at 60:24-25, 90:5-7, 115:24-116:1, 538:15-22, 539:22-540:14, 804:23-805:9,
1039:4-1042:1; PX-8; PX-19; PX-21, PX-34.
37.
Steadfast guarantees the nurses their hourly pay rate for hours worked, regardless
of whether a client-facility pays Steadfast for the nurse's work. Tr. at 1041:221042:1.
38.
Not receiving a paycheck from Steadfast would impact the nurses' ability to meet
their financial obligations. See e.g. Tr. at 75:6-8, 97:25-98:2, 125:15-18, 184:710.
39.
Steadfast requires the nurses to track their hours when working at client-facilities
using timesheets that were created by Steadfast and then submit those timesheets
to Steadfast for payment. Tr. at 38:25-39:6, 92:13-93:11, 117:21-118:4, 178: 320, 204:6-17, 215:8-216:25, 224:11-17, 230:10-231:6, 265:25-266:9, 283:10284:3, 315:1-13, 433:7-10; PX-9; PX-53; PX-55.
40.
Before Steadfast compensates a nurse for completing a shift, Steadfast requires a
staff member at the client-facility to sign the nurse's timesheet to verify the start
and end times of the nurse's shift. See e.g. Tr. at 110:23-111:5, 131:25-132:6,
253:15-17.
41.
Steadfast disciplines nurses by cancelling nurses' shifts or otherwise "removing
them from the schedule." Tr. at 30:1-9, 35:14-20, 40:1^2:2, 44:1-8, 1 19:17120:12, 206:4-207:5, 335:18-336:7, 647:8-16.
42.
Steadfast disciplines nurses for a variety of reasons including, but not limited to,
discussing compensation with a co-worker or client-facility; attempting to contact
client-facilities to set their own schedules or rates; being recruited by a client-
facility; working for a competitor; declining or cancelling shifts; and being
intoxicated or otherwise engaged in unprofessional conduct while working at a
client-facility. Tr. at 30:1-25, 31:5-22, 35:14-20, 37:1-5, 41:18-22, 62:6-63:3,
177:15-178:2, 248:22-250:20, 283:1-9, 647:8-16, 883:18-886:9-20.
43.
The nurses do not exercise independent judgment and perform activities typical of
nurses in the medical industry including, but not limited to, administering
medications, treating wounds, taking notes, and otherwise caring for patients. Tr.
at 99:11-21,360:3-387:19,414:14^34:4; PX-10; PX-12.
44.
Steadfast instructs nurses on how they should behave while working at client-
facilities by sending the nurses written memorandums on topics including, but not
limited to, work attire, punctuality, and timekeeping. Tr. at 137:18-138:1, 181:38, 536:11-15, 1031:17-19, 1035:10-16.
45.
The Board of Nursing contacts Steadfast if it has any questions or issues with the
nurses on Steadfast's registiy. Tr. at 979:22-980:2, 1004:17-20, 1006:9-15.
46.
The nurses complained to Steadfast on numerous occasions that they were not
receiving overtime. Tr. at 78:3-13, 127:5-18, 185:24-186-7; 221:21-222:3,
344:10-345:1.
Steadfast^s Relationship with Client-Facilities
47.
Healthcare facilities enter into staffing contracts with Steadfast to obtain healthcare
services from the nurses on Steadfast's registry. Tr. at 514:10-12,525:8-10,920:421;PX-10.
48.
Healthcare facilities that contract with Steadfast for nursing services are clients of
Steadfast. Tr. at 922:25-923:1, 947:21-22, 1050:11-14.
49.
Client-facilities rely on Steadfast to ensure that the nurses are properly licensed and
othemise qualified for work. Tr. at 407:19-23, 907:25-909:12; PX-10.
50.
Steadfast does not provide client-facilities with a complete listing of the nurses on
its registiy or the nurses' contact information; Steadfast decides which nurse is sent
to respond to the client-facilities' needs. Tr. at 365:3-7, 368:10-12,426:23-427:9.
51.
Client-facilities are prohibited from recruiting the nurses on Steadfast's registiy.
PX-10; PX-12. Steadfast enforces the prohibition by requiring facilities to first buy
out Steadfast's contract with a particular nurse or by removing nurses who receive
employment offers from facilities from the registry. Id.; Tr. at 31:5-22, 177:15178:2, 248:22-250:22, 273:6-14.
52.
In some of Steadfast's staffing contracts with healthcare facilities, the nurses on
Steadfast's registry are expressly designated as "employees" or "employed
personnel" of Steadfast, and Steadfast assumes all legal responsibility as the nurses'
"employer." See e.g. PX-10 at 48, 82-83, 90, 134-135, 142.
10
53.
Steadfast and client-facilities negotiate the amount a facility will be charged for the
work performed by the nurses. Tr. at 941:12-942:20, 943:2-10; PX-10.
54.
Client-facilities require Steadfast to submit invoices detailing the total hours
worked by the nurses and pay Steadfast a set hourly rate for the hours worked by
the nurses at their respective facilities. Tr. at 135:9-20,375:1-24,376:1-10,377:524, 378:6-9, 379:6-380:4, 380:5-381:19, 381:14-19, 430:21-433:10, 586:11-17,
431:15-432:5, 432:8-19, 587:3-15, 527:5-10; PX-10; PX-11.
55.
The hourly rate a facility pays Steadfast is not the same rate Steadfast pays the
nurses. Steadfast retains a percentage of the hourly rate charged to facilities as
revenue. Tr. at 534:6-16, 942:12-20, 943:2-10; PX-10.
56.
Steadfast requires client-facilities to provide Steadfast with feedback on the nurses'
performance. Tr. at 374:7-19, 400:2-5,423:21-25.
57.
If a client-facility no longer wants a particular nurse to work at its facility, the
facility contacts Steadfast and requests that the nurse be put on a "do not return" or
"DNR" list. See e.g. Tr. at 397:8-398:4.
58.
By not paying overtime. Steadfast can charge client-facilities lower rates for their
services than their competitors who do pay overtime. These lower rates make
Steadfast's services more desirable to healthcare facilities than their competitors'
services, creating unfair competition in interstate commerce. Tr. at 623:18-624:6.
The Nurses'Relationship with Client-Facilities
59.
There is no contractual relationship between the nurses and client-facilities. Tr. at
514:10-12, 525:8-10, 920:4-21.
11
60.
Client-facilities do not interview applicant nurses. Tr. at317:23-318:l,428:10-15,
369:4-9.
61.
Steadfast does not permit the nurses to negotiate their hourly pay rate with clientfacilities directly. See e.g. Tr. at 123:8-16, 183:3-9, 198:18-21, 203:12-21,
270:20-23, 282:24-25.
62.
Client-facilities do not require nurses to complete timesheets for compensation and
are not involved in any compensation issues between Steadfast and the nurses. Tr.
at 135:9-20, 375:1-18, 377:5-24, 378:6-9, 379:6-380:4, 380:5-381:19, 381:14-
19, 430:25-433:10, 431:15-432:5,432:8-19.
63.
While some nurses prefer to use their oWn equipment (e.g. stethoscopes, blood
pressure cuffs, etc.), the nurses are not required to use their own equipment because
client-facilities provide all tools and equipment the nurses need to perform their
work. Tr. at 84:1-14; 98:8-99:4; 184:16-23, 825:13-826:8.
64.
Client-facilities do not discipline the nurses and contact Steadfast regarding any
issues they may have with a nurse's performance. Tr. at 150:20-24,373:24-374:19,
396:1-11,423:16-17, 424:9-18.
65.
Client-facilities do not train the nurses, but some client-facilities provide nurses
with an "orientation" that includes a tour of the facility and "certain documents"
related to the nurse's specific work assignment. Tr. at 396:12-15, 445:22—446:2.
Steadfast's Recordkeeping
66.
When working with Zira Technologies, Inc. to develop the Zira app. Steadfast
declined the option to include a feature that would have tracked the number of hours
12
the nurses worked in excess of 40 hours each workweek. Tr. at 1016:23-1017:23;
PX-2 at 74-75, 81-82; PX-3 at 5.
67.
Steadfast does not record the nurses' total overtime pay and total additions or
deductions from wages for each pay period. PX-7; PX-7a; PX-8.
68.
Steadfast does not record the hours worked for straight-time pay separately from
the hours worked for overtime pay. Tr. at 803:3-8; PX-7; PX-7a; PX-8.
Good Faith Defense
69.
Defendants never contacted any personnel within the U.S. Department of Labor
("DOL") to determine whether their compensation policies complied with the
FLSA.Tr. at 552:14-19.
70.
In 2018, after concluding an initial administrative investigation into Defendants'
pay practices. Plaintiff informed Defendants that their pay practices violated the
FLSA. Tr. at 550:25-551:25.
71.
Prior to Plaintiffs investigation. Defendants never consulted an attorney to
determine how the nurses on their registry should be classified before Defendants
classified the nurses as independent contractors. Tr. at 904:2-24, 1106:10-13.
72.
After Plaintiffs administrative investigation, Ms. Pitts met with John Michael
Bredehoft, Esq. on two occasions—in June 2018 and January 2019—and discussed
the classification status of Steadfast's nurses. Tr. at 1069:13-15, 1096:2-3.
73.
Mr. Bredehoft spoke with Ms. Pitts and Steadfast Payroll Manager, Christine Kim,
to glean information about Defendants' business operations. Tr. at 1069:13-15,
1077:8-12, 1096:2-3.
13
74.
In addition to speaking with Ms. Pitts and Ms. Kim, Mr. Bredehoft reviewed
Steadfast's application form for nurses, all of Steadfast's nurse contracts, all of
Steadfast's contracts with healthcare facilities, and some of Steadfast's invoices to
client-facilities. Tr. at 1100:2-1101:8, 1096:7-14. Defendants provided Mr.
Bredehoft the above-referenced documentation. Id.
15.
Based on the information Defendants provided Mr. Bredehoft, in January 2019, Mr.
Bredehoft communicated to Ms. Pitts "to a veiy high degree of confidence" that
Defendants' nurses were independent contractors because Steadfast did not
exercise significant control over its nurses. Tr. at 1071:2-8, 1075:22-1077:12,
1079:2-1082:23. He also indicated that Ms. Pitts had an "excellent chance" of
prevailing on the issue of worker classification under the FLSA. Id.
76.
Mr. Bredehoft also advised Defendants, however, to remove the non-compete
clause in their contractor agreements and cease using a document called,
"Employment Application," when recruiting nurses as those features are
inconsistent with the nurses being classified as independent contractors. Tr. at
1097:21-1098:5, 1100:2-1101:15, 1116:13-16.
77.
Mr. Bredehoft never conducted an independent factfinding to verify whether the
infonnation Defendants provided to Mr. Bredehoft reflected Steadfast's actual
business practices. Tr. at 1069:19-20, 1095:1-1096:14. Mr. Bredehoft never
discussed Steadfast's business practices with any of Steadfast's nurses or office
employees (apart from Ms. Kim, who was convicted for felonious embezzlement);
he did not discuss Steadfast's business practices with any of Steadfast's client-
14
facilities; and Mr. Bredehoft only reviewed documentation provided by Defendants
in evaluating Defendants' business practices. Id; Tr. at 792:11-13, 793:11-13.
78.
Mr. Bredehoft did not review any of the memorandums Defendants sent to the
nurses before advising Defendants regarding the nurses' classification status. Tr. at
1110:21 - 1111:4.
79.
Mr. Bredehoft did not discuss the DOL Wage and Hour Division ("WHD")'s Field
Assistance Bulletin No. 2018^("FAB") with Defendants. Tr. at 1107:15-21.
80.
Defendants are familiar with the WHD's FAB No. 2018-4("FAB"). Tr. at 993:1216, 1029:13-17.
81.
Defendants know that they must pay employees overtime under the FLSA. Tr. at
535:24-536:2; 1092:13-1093:11.
Back Wages
82.
Plaintiff used the information in Steadfast's payroll summaries and Next Day Pay
("NDP") records to calculate the total hours worked and alleged backpay for the
nurses from August 18, 2015 through June 27, 2021. J. Pretrial Statement at 2; Tr.
at 453:21-454:6, 459:3-6, 474:21-475:3, 476:13^77:1, 478:2^79:2, 480:4-18,
485:11-25; PX-7; PX-7a; PX-21; PX-22.
83.
Between February 1, 2019 and June 27, 2021, where the total number of hours a
nurse worked in one workweek exceeded 168 (the maximum number of hours in a
week). Plaintiff used an average of 112 hours as the maximum hours worked to
adjust the back-wage calculation based on employee interviews. Tr. at 481:8-25.
15
84.
Plaintiff calculated backpay by dividing each nurse's gross weekly wage by the
nurse's total hours worked for that workweek^ to determine the nurse's regular rate
of pay. Plaintiff then multiplied each nurse's regular rate of pay by the hours
worked over 40 in that workweek and multiplied the resulting number by .5 to
account for the fact that Steadfast paid these individuals straight-time for eveiy hour
worked. The resulting number equaled the total backpay owed to that nurse for that
workweek. Tr. at 459:21-460:13, 482:8-20; PX-21; PX-22.
85.
Based on the calculations explained above, the total alleged backpay for Steadfast's
nurses from August 18, 2015 through June 27, 2021 is $3,619,716.49. Tr. at 487:710; PX-21; PX-22; PX-43.
86.
Defendants were ordered to review Plaintiffs back wage calculations for accuracy.
J. Pretrial Statement at 4.
87.
Defendants did not offer evidence to refute Plaintiffs damages calculations or offer
a counter-calculation of damages.
HI.
CONCLUSIONS OF LAW
The Court has made the following conclusions of law:
1.
Subject matter jurisdiction in this action iSjConfeiTed upon the Court by 29 U.S.C.
§217and28U.S.C. §§ 1331.
2.
This Court has personal jurisdiction over Plaintiff pursuant to 28 U.S.C.§ 1345 and
personal jurisdiction over Defendants because Defendants are domiciled in
Virginia.
- Amounts for gross weekly wage and total hours worked appear in Defendants' payroll summaries. PX-21;
PX-22.
16
3.
Venue is proper under 28 U.S.C. § 1391 in any judicial district in which the
defendant is properly subject to personal jurisdiction. 28 U.S.C. § 1391(b) and (c).
Venue is proper pursuant to § 1391 because a substantial part of the acts giving rise
to the claims occurred in this District; Defendants have sufficient connection with
this District; and Defendants are domiciled in this District.
4.
Under the FLSA,employers are required to pay their employees overtime (not less
than one and one-half times an employee's regular rate of pay for every hour
worked over 40 hours in a workweek). 29 U.S.C. § 207.
5.
Employers subject to the FLSA are also required to "make, keep, and preserve"
records ofthose who work for the employer and their applicable "wages, hours, and
other conditions and practices of employment," including employees' total
overtime earnings each week. 29 U.S.C. § 211(c); 29 C.F.R. § 516.2. Employers
must also produce those records to the Government when "necessary and
appropriate" for enforcing the FLSA. Id.
6.
Under the FLSA,"employer" includes "any person acting directly or indirectly in
the interest of an employer in relation to an employee . . . ." 29 U.S.C. §203(d).
"Employee" means "any individual employed by an employer," and "employ"
means "to suftbr or permit to work." 29 U.S.C. §§ 203(e)(1),(g).
7.
Federal courts utilize a six-factor test to determine whether an individual is an
employee or independent contractor under the FLSA:"(1)the degree ofcontrol that
the putative employer has over the manner in which the work is performed,(2) the
worker's opportunities for profit or loss dependent on his managerial skill,(3) the
worker's investment in equipment or material, or his employment of other workers.
17
(4) the degree of skill required for the work,(5) the permanence of the working
relationship, and (6) the degree to which the services rendered are an integral part
of the putative employer's business." McFeeley v. Jackson St. Entm 7, LLC , 825
F.3d 235, 241 (4th Cir. 2016); Sclniltz v. Cap. Int'l Sec., Inc., 466 F.3d 298 (4th
Cir.
Alley V. Quality Eco Techs., LLC, No. 3:20CV355, 2021 WL 1 196188,
at*6(E.D. Va. Mar. 29, 2021).
8.
No single factor in the six-factor test is dispositive as "the test is designed to capture
the economic realities of the relationship between the worker and the putative
employer." McFeeley, 825 F.3d at 241; Schiiltz, 466 F.3d at 305."The touchstone
of the 'economic realities' test is whether the worker is 'economically dependent
on the business to which he renders service or is, as a matter of economic [reality],
in business for himself.'" McFeeley, 825 F.3d at 241 (quoting Schultz, 466 F.3d at
304). The degree of control a putative employer has over the way an alleged
employee's work is performed is the "most important factor" in making this
determination. Smith v. CSRA, No. 20-1377, 2021 U.S. App. LEXIS 26390, at *31
(4th Cir. Sep. 1, 2021)(citing Garrett v. Phillips Mills, Inc., 721 F.2d 979,982(4th
Cir. 1983)).
9.
Any employer who is subject to the FLSA and willfully fails to pay overtime wages
to its employees is liable for all unlawfully kept overtime wages and an equal
amount as liquidated damages. 29 U.S.C. § 216(e)(2).
10.
The FLSA also authorizes district courts to issue injunctive relief to "restrain
violations" of Sections 206 and 207 of the Act upon a showing of cause. 29 U.S.C.
§ 217. Whether to issue an injunction under the FLSA is within the discretion of
the district court. See Sec'y ofLabor, United States DOL v. Access Home Care,
Inc., Civil Action No. l:18-cv-581 (AJT/MSN), 2019 U.S. Dist. LEXIS 231687,
at *12-13(E.D. Va. Mar. 20, 2019)(citing McComb v. Homeworkers' Handicraft
Coop., 176 F.2d 633, 641 (4th Cir. 1949); see also Tobin v. Flippo, 91 F. Supp.
302, 304 (E.D. Va. 1950) (holding that whether to issue an injunction is
"discretionaiy with the trial court").
11.
In deciding whether to issue an injunction under the FLSA, courts may consider
(1) the employer's previous conduct;(2) whether it is currently compliant (or noncompliant) with the FLSA; and (3) the dependability of any assurances that it will
comply with the Act in the future. See Access Home Care, 2019 U.S. Dist. LEXIS
231687, at *12-13 (E.D. Va. Mar. 20, 2019)(citing Martin v. Funtime, Inc., 963
F.2d 110, 114 (6th Cir. 1992)); see also Acosta v. Emerald Contractors Inc., Civil
Action No. TDC-18-3762,2019 U.S. Dist. LEXIS 160500, at *14-15(D. Md. Sep.
19, 2019).
12.
If, however, an employer "shows to the satisfaction of the court that the act or
omission giving rise to such 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." 29 U.S.C. §
260; Van Dyke v. Bluefield Gas Co., 210 F.2d 620, 622(4th Cir 1954).
13.
The employer has the "plain and substantial burden ofpersuading the court by proof
that his failure to obey the statute was both in good faith and predieated upon such
reasonable grounds that it would be unfair to impose upon him more than a
compensatory verdict." Burnley v. Short, 730 F.2d 136, 140 (4th Cir. 1984). An
19
employer's subjective "'[g]ood faith' and 'reasonable grounds' are measured
objectively, 29 C.F.R. § 790.22(c), and establishing either element is sufficient to
satisfy the statute." Calderon v. GEICO Gen. Ins. Co., 809 F.3d 111, 116 (4th Cir.
2015). An employer must meet this burden by a preponderance of the evidence.
Troutt V. Stavola Bros., 905 F. Supp. 295, 298(M.D.N.C. 1995).
14.
To support a good faith defense, an employer must attempt to "look into the law,"
"seek legal advice," or otherwise take "active steps to ascertain the dictates of the
FLSA and then move to comply with them." McFeeley, 825 F.3d at 245. See also
Anderson v. Penn Nat'I Gaming, Inc., Civil Action No. 3:04CV42,2007 U.S. Dist.
LEXIS 71703, at *6 (N.D.W. Va. Sep. 26, 2007)(citing Reich v. Southern New
England Telecomm. Corp., 121 F.3d 58, 71 (2d Cir. 1997)).
15.
"[T]o reap the benefit of the good faith defense of § 260 based on the advice of
counsel[,] the defendant must honestly and truly seek the advice of counsel, counsel
must give advice that is reasonable in a legal sense, and the defendant must act in
strict conformity with that advice." Fuentes v. CAIInt 'I, Inc., 728 F. Supp. 2d 1347,
1358-59 (S.D. Fla. 2010)(citing Townley v. Floyd & Beasley Transfer Co., No.
88-AR-0907-S, 1989 WL 205342, at *4(N.D. Ala. Dec. 8, 1989))."[W]hat advice
was sought, what disclosures were made by the defendants to their counsel, whether
the legal advice was reasonable, and whether the defendants strictly complied with
the legal advice" are all factors the court can consider in deciding whether a
defendant proved its good faith defense "to the satisfaction of the court." Id. at
1359; 29 U.S.C. § 260.
20
IV.
DISCUSSION
In analyzing the economic realities of the relationship between the nurses and Steadfast,
the Court must determine whether the nurses are employees of Steadfast or independent
contractors by considering:(1) the degree of control Steadfast had over the manner in which the
nurses performed their work; (2) the nurses' opportunities for profit or loss based on their
managerial skill;(3) the nurses' investment in equipment or material, or the employment of other
workers;(4) the degree of skill required for the nurses' work;(5) the pemianence of the working
relationship between the nurses and Steadfast; and (6)the degree to which the nurses' services are
integral to Steadfast's business. McFeeley, 825 F.3d at 241; Schultz, 466 F.3d at 298; Alley, 2021
WL 1196188, at *6. If employer liability is established, the Court will need to detennine whether
Defendants are liable for willfully failing to pay overtime and maintain pay records under the
FLSA.
A.
Defendant's Degree of Control Over the Manner of Work
The evidence shows that Defendants exercise extensive control over the nurses' manner of
work, and therefore, employ the nurses under the FLSA. The U.S. Wage and Hour Division
("WHD")published Field Assistance Bulletin No. 2018-4("FAB")to "provide guidance to Wage
and Hour Division (WHD) field staff to help them deteiTnine whether home care, nurse, or
caregiver registries ... are employers under the Fair Labor Standards Act(FLSA)." U.S. Dep't of
Labor, Wage & Hour Div., Field Assistance Bull. No. 2018-4, Determining Whether
Nurse or Caregiver Registries Are Employers of the Caregiver 1 (2018)
("FAB No. 2018-
4"). The FAB also details "specific examples of common registry business practices, which may,
when the totality of factors is analyzed, establish the existence of an employment relationship
under the FLSA." Id. The FAB generally describes a registry that is not an employer as an entity
21
that "act[s] as the liaison between the caregiver and the client but does not typically negotiate the
terms or conditions of the job on either party's behalf." Id. at 2. The Court relies on the FAB as
guidance in assessing the extent to which Defendants exercise control over the nurses' manner of
work below.
1.
Scheduling and Assigning Work
First, the record clearly establishes that Defendants have an extensive degree of control
over the scheduling and assigning of work between the nurses and client-facilities. According to
the FAB,"a registry's exercise of control over the caregiver's work schedules and assignments
may indicate that the registry is an employer of the caregiver." FAB No. 2018-4 at 5. In this case.
Defendants are in complete control of what infonnation, if any, nurses receive regarding available
shifts at client-facilities. Findings of Fact ("FOF")
28-29, 32, 42, 50, 59. It is only through
contact with Defendants via phone, email, text, or the Zira app that nurses can learn of available
shifts at client-facilities. Id. Moreover, Defendants prohibit nurses from communicating with
facilities directly regarding available shifts and scheduling. Id. For these reasons, the way nurses
are scheduled and assigned work is indicative of an employment relationship with Defendants.
2.
Investment in Training and Insurance
Defendants also invest in the nurses' training and insurance, which weighs in favor of an
employment relationship. A registry's investment in "a caregiver's training or pay for his or her
licenses, insurance, or medical supplies... may indicate that the registry is acting as the caregiver's
employer, instead of simply a referral service." FAB 2018-4 at 8. The record reflects that
Defendants train nurses on a variety of topics (e.g. HIPAA compliance, substance abuse, and
harassment); cover nurses under their own malpractice insurance policy; and provide nurses
worker's compensation benefits. FOF
18-19. The evidence also demonstrates that Defendants
22
send nurses written memorandums with guidance on healthcare worker professionalism. Id. 44.
Therefore, Defendants have demonstrated an investment in the nurses' training and insurance that
is equivalent to the investment of an employer.
3.
Setting the Pay Rate
Defendants admit that they set the nurses' pay rate, an action typical of an employer.
According to the FAB,"[a] registry typically does not determine a caregiver's rate of pay. The
client instead negotiates the rate of pay directly with the caregiver." FAB 2018-4 at 6. "[A]
registry's decision to effectively set a caregiver's rate of pay without the caregiver making the
ultimate determination indicates that the registry is acting as the caregiver's employer." Id. at 7. In
this case, not only do Defendants determine the nurses' pay rates without any input from the nurses.
Defendants expressly forbid nurses from negotiating their pay rates with facilities directly and
withhold the nurses' contact infonuation from facilities. FOF 33, 61. Even the nurses' ability to
negotiate their pay rate with Defendants is limited by the extent to which changing the pay rate
would benefit Defendants. Id. ^[33. Thus, Defendants' decision to set the nurses' pay rates is
consistent with the actions of an employer.
4.
Continuous Paymentsfor Caregiver Services
Like an employer. Defendants receive continuous payments from client-facilities for the
nurses' services. As the FAB advises:
"A registry may instead choose to charge fees that fluctuate based
on the number of hours that a caregiver works for the client. Such a
registiy may have an ongoing interest in the employment
relationship, including in the number of hours the caregiver works
and whether those hours are tracked accurately. The registry's fees
are based on the ongoing caregiver relationship, not the registry's
initial referral or administrative efforts. The caregiver's pay then
depends, in part, on the amount the registry charges. Such charges,
therefore, may indicate that the registry is the caregiver's
employer."
23
FAB 2018-4 at 7. Here, the amount Defendants invoice client-facilities is based directly on the
numbers of hours worked by the nurses, not the initial referral or administrative efforts. FOP 54-
55. Defendants set the nurses' hourly rate, negotiate a higher hourly rate with client-facilities, and
retain the difference as revenue. Id. For these reasons, the record clearly establishes that
Defendants have an ongoing interest in its relationship with the nurses and facilities, which is
indicative of an employment relationship.
5.
Paying Wages
Defendants are acting as the nurses' employer by, guaranteeing direct payment of wages
from Defendants' own financial accounts. A registry "may be exercising control over the
caregiver,[if] the caregiver may economically depend on the registry's preferences and decisions."
FAB 2018-4 at 6. Specifically,
"[a] registry's direct payment of its own funds to the caregiver. . .
may indicate that the registry is the caregiver's employer. This is
true regardless of whether the registry typically receives
reimbursement from the client because, in this situation, the registry
may be effectively guaranteeing the payment even if the client does
not ultimately pay. In such circumstances, the caregiver may be
economically dependent on the registiy, which indicates that the
registry is the caregiver's employer."
FAB 2018-4 at 7. In this case. Defendants pay the nurses directly, from their own accounts, and
regardless of whether client-facilities pay Defendants for its nurses' services. FOF
35-37.
Defendants guarantee nurses straight-time pay for virtually all hours worked on a weekly or, at the
nurses' election, an expedited basis. Id.\ Stipulated Findings of Fact ("SFOF") ^ 3. Moreover.
"Medical Staffing of America" appears on all the nurses' earnings statements. SFOF
7.
Testimony from several nurses supports that not receiving a paycheck from Defendants would
24
impact the nurses' ability to meet their financial obligations. FOF 38. Ultimately, the nurses are
economically dependent on Defendants as their employer.
6.
Tracking Caregiver Hours
Defendants' efforts to maintain detailed and accurate records of the nurses' time is more
like the efforts of an employer than an agency providing a mere administrative function. "[A]
registry's active creation and verification of time records may indicate that the registry ... [is] an
employer of the caregiver. Tracking and independently verifying time worked is generally a form
of supervision on which the caregiver depends to ensure proper payment." FAB 2018-4 at 8. In
the instant matter, Defendants create the timesheets the nurses must use to record their time and
submit to Defendants for payment. FOF 39. While Defendants require a staff member at client-
facilities to verify nurses' hours by signing the timesheets, generally, client-facilities do not require
the nurses to track their hours nor do they maintain a record ofthe nurses' hours. Id. 40,62. Thus,
Defendants' method of tracking caregiver hours is indicative of an employment relationship.
7.
Supervision and Discipline
Finally, the record reflects that Defendants exercise excessive control over the nurses by
supervising the nurses' performance and disciplining th^m when Defendants' deem necessaiy.
According to the FAB, "[a] registiy usually has no right to alter or terminate the terms and
conditions of the caregiver's employment[,]" "monitor or supervise caregivers[,] ... or evaluate
caregivers' performance" without assuming employer liability. FAB 2018-4 at 5-6. Testimony
from several nurses and client-facility representatives establish that Defendants are responsible for
supervising and disciplining nurses. FOF 21, 23, 25, 32, 41, 42,44. Defendants require facilities
to provide Steadfast with feedback on the nurses' performance. Id.
56. Client-facilities do not
discipline the nurses and contact Defendants regarding any issues they may have with a nurse's
25
performance. Id.
64. And finally, several nurses testified that Defendants discipline nurses by
cancelling nurses' shifts or otherwise diminishing their ability to obtain work through the registry.
Id. 41^2. Defendants "remove nurses from the schedule" at their discretion for a variety of
reasons, e.g. discussing compensation with a co-worker or client-facility; attempting to contact
client-facilities to set their own schedules or rates; being recruited by a client-facility; working for
a competitor; and declining or cancelling shifts. Id. Thus, the level of supervision and discipline
Defendants exercise over the nurses is indicative of an employment relationship.
For the reasons above. Defendants have extensive control over the nurses' manner of work,
a level of control that far exceeds the administrative functions in which a registi7 may engage
without creating an employment relationship with the caregivers on its registiy.
B.
The Remaining Factors
Virtually all the remaining factors—workers' opportunities for profit/loss; the permanence
of the working relationship; workers' investment in equipment/other workers; and the degree to
which the work is integral to Defendants' business—indicate that Defendants are the nurses'
employer. First, it is evident that the nurses' have no opportunities for profit/loss in its relationship
with Defendants. FOF
11. Ms. Pitts is the sole owner of Steadfast, and there is no evidence that
the nurses have an interest in Steadfast beyond their role as workers for a set hourly pay rate. Id. 'd
4; SFOF ^14. Furthermore, the non-competition clauses in the contracts between Defendants and
the nurses significantly hinder the nurses' ability to accumulate profit independent of Defendants.-^
FOF ^126. Second, Defendants' pay records indicate that the relationship between Defendants and
the nurses is permanent in nature, even if a term limit is stated in a nurse's contractor agreement.
Id. 24. Third, the evidence shows that nurses do not invest in equipment to an extent indicative
^ See FAB 2018-4 at 6(stating that "prohibiting a caregiver from registering with other referral services .. .[or]
clients outside of the registty" indicates the existence of an employment relationship).
26
of an independent contractor status and that Defendants prohibit nurses from hiring other nurses,
employees, or contractors to work for them at client-facilities. Id.
22, 63. Finally, the parties
agree that the work the nurses perfomi is integral to Defendants' business. Id.
10.
Therefore, like the control factor, the totality of the remaining factors courts consider in
determining whether workers are employees or independent contractors weigh in favor of the
nurses being properly classified as Defendants' employees. The degree of skill (via education and
licensures) required for the nurses' work suggests that the nurses could work in an independent
capacity, but the economic realities of the nurses' relatiqnship with Defendants under the other
1
factors outweigh this factor significantly. Ultimately, under the FLSA, the nurses on Defendants'
registry are Defendants' employees, not independent contractors.
C.
Good Faith Defense
Defendants have failed to prove a good faith defense under 29 U.S.C. § 260 that would
defeat or diminish their liability for willfully violating the FLSA's overtime and recordkeeping
provisions. Defendants allege that they have a reasonable, good faith belief that they are not
violating the FLSA after being advised by legal counsel that their nurses are likely properly
classified as independent contractors. Defendants' Supplemental Brief("Defs.' Supp. Br."), ECF
No. 322 at 28-29. Ultimately, Defendants' alleged good faith belief is not objectively reasonable.
As an initial matter, the evidence clearly demonstrates that Defendants could not have
classified their nurses as independent contractors in good faith prior to seeking legal counsel in
June 2018. Defendants failed to present any evidence that it sought legal advice on the
classification of its nurses or took any proactive steps to educate themselves on the FLSA prior to
meeting Mr. Bredehoft in June 2018. FOF 69, 71.
27
Moreover, Defendants' continuing reliance on Mr. Bredehoft's legal opinion on and after
June 2018 is not objectively reasonable. First, the DOL conducted a multi-year administrative
investigation into Defendant's pay practices and informed Defendants in 2018 that their pay
practices violated the FLSA. Id.
70. See Burnley,130 F.2d at 140 (citing Marshall v. Brimner,
668 F.2d 748, 753-54 (3d Cir. 1982), which affirmed an award of liquidated damages where the
employer deliberately circumvented FLSA requirements after the DOL Wage and Hour Division
investigated the employer's pay practices). Second, Defendants admit that they are familiar with
FAB 2018-4, which expressly identifies several of Defendants' pay practices as indicative of an
employment relationship with the nurses. Id.
80. See Richard v. Marriott Corp., 549 F.2d
303 (4th Cir.), cert, denied, 433 U.S. 915, 53 L. Ed. 2d 1100, 97 S. Ct. 2988 (1977)(affirming
liquidated damages where the employer was aware of an opinion letter issued by the Wage and
Hour Administrator that indicated that its pay practices were illegal). Therefore, while Mr.
Bredehoft did not review this bulletin with Defendants, they are independently aware of the
guidance and have not sought counsel regarding whether their practices comply with the guidance.
Id. II 79, 80.
And finally. Defendants failed to prove that they provided Mr. Bredehoft all the
information he would have needed to provide a fully infonned, reasonable legal opinion on
Defendants' pay practices. For example, there is no evidence that Mr. Bredehoft spoke with the
nurses, client-facilities, or anyone other than Ms. Pitts and the Payroll Manager, Ms. Kim (who
was convicted for felonious embezzlement), regarding Defendants' actual business practices. FOP
^1 77. Mr. Bredehoft did not review the memorandums Steadfast sends nurses regarding best work
practices. Id.
44; 78. And there is no evidence that Defendants informed Mr. Bredehoft that
Defendants, not the client-facilities, require nurses to notify them if they are late, sick, or otherwise
28
cannot fulfill a shift and discipline nurses by cancelling their shifts. Id. 41,42. In fact, Defendants
convinced Mr. Bredehoft of the exact opposite despite being fully aware at the time of their
meetings with Mr. Bredehoft of the reasons the DOL found Defendants' pay practices in violation
of the FLSA. See Fuentes, 728 F. Supp. 2d at 1358-59 (citing Townley, 1989 WL 205342, at *4.
which rejected an employer's good faith defense when the employer "did not furnish counsel
information necessary for a legitimate legal opinion upon which it could rely and base a subsequent
defense of'good faith'"). Thus, Defendants' reliance on Mr. Bredehoft's legal advice was not in
good faith or objectively reasonable, and they failed to prove their good faith defense by a
preponderance of the evidence.
Defendants rely on precedent from within the Fourth Circuit where courts have declined to
award liquidated damages where an employer adheres to legal advice regarding its compliance
with the FLSA. Defs.' Supp. Br. at 28-29 (citing Burnley, 730 F.2d 136 and McFeeley, 825 F.3d
235). This case is distinguished from Burnley and McFeeley because Defendants, unlike the
employers in those cases, were subject to an administrative investigation by the DOL Wage and
Hour Division, the sole agency responsible for enforcing the FLSA and sole beneficiary ofjudicial
deference on issues relating to the FLSA. See 29 U.S.C. § 259 (instmcting courts to bar court
actions against employers that rely on the DOL Wage and Hour Division's interpretation of the
FLSA). At the conclusion of that investigation, the DOL advised Defendants that their pay
practices were illegal. FOF 70. Moreover, regardless of this distinction. Defendants did not
adhere to Mr. Bredehoft's advice to forgo the non-compete clauses in its contractor agreements.
FOF 26; McFeeley, 825 F.3d at 245 (holding that an employer must adhere to the legal advice
received to prevail on their good faith defense). Mr. Bredehoft testified that if the non-compete
clause is enforced,"then [his] views would change" regarding the nurses' classification. Id. ^1 76.
29
Therefore, the record reflects that Defendants acted willfully and did not violate the FLSA in good
faith.
D.
Recordkeeping Violations
As the nurses' employer under the FLSA, Defendants are liable for failing to "make, keep,
and preserve" records of those who work for the employer and their applicable "wages, hours, and
other conditions and practices of employment.. .
29 U.S.C. § 211(c); 29 C.F.R. § 516.2. The
record reflects that Defendants declined to include an overtime-tracking function in the Zira app
and otherwise failed to accurately record the nurses' total overtime pay and total additions or
deductions from wages for each pay period. Id.\ FOF 66-68. Therefore, Defendants are liable to
Plaintiff for failing to meet the recordkeeping requirements under the FLSA.
E.
Injunctive Relief
The evidence demonstrates that Defendants have never complied with the FLSA and will
continue to violate the FLSA, rendering injunctive relief appropriate. 29 U.S.C. § 217; Access
Home Care, 2019 U.S. Dist. LEXIS 231687, at *12-13. Defendants' deposition and trial testimony
as well as other documentary evidence supports Defendants' intent to continue misclassifying the
nurses on their registry despite their familiarity with DOL guidance and law to the contrary. Id. ^1
3^ 6_7^ 80-81. Therefore, Plaintiff has shown good cause for enjoining Defendants from violating
the FLSA's overtime and recordkeeping provisions. Id.
V.
CONCLUSION
For the foregoing reasons, the Court FINDS Defendant liable for failing to pay overtime
and maintain pay records in accordance with the FLSA. Accordingly, JUDGMENT IS
ENTERED FOR PLAINTIFF, and Defendants are ENJOINED from committing further
violations of the FLSA.
30
Plaintiff is ORDERED to provide the Court with an updated calculation of back pay and
liquidated damages within sixty(60)days of the date of this opinion. Defendants are ORDERED
to cooperate with Plaintiff by providing Plaintiff with all information necessary for compliance
with this order.
The Clerk is DIRECTED to send a copy of this Order to the parties and counsel of record.
IT IS SO ORDERED.
Norfolk, Virginia
£
January/5 ,2022
^
Raymond A.Jackson
United States District Judge
31
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