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Sanchez v. Caregivers Staffing Services Inc.

United States District Court, E.D. Virginia, Alexandria Division

January 26, 2017




         THIS MATTER comes before the Court on Plaintiff s Motion for Partial Summary Judgment and Defendants' Motion for Summary Judgment on all counts.

         Blanca Sanchez ("Plaintiff") previously worked for both Caregivers Staffing Services, Inc. and Caregivers Home Health Services, Inc. ("Defendants"). Both companies provide services in the home health care industry. Staffing Services is owned exclusively by Silvia Echeverria, and it provides non-skilled services. Home Health is owned both by Ms. Echeverria and Ms. Teresita Cauterucci; it provides skilled services. The companies have separate scheduling, separate time-keeping procedures, and separate payroll. While Ms. Echeverria is an administrator for both companies, she has never personally employed Plaintiff.

         Plaintiff is trained as a home health aide and personal care aide, but she has not been trained or licensed to work as a registered nurse (RN), practical nurse (LPN), or certified nurse assistant (CNA). While working for Defendants, she provided in-home personal care on an hourly basis at $16 per hour to clients of Staffing Services. Plaintiff provided personal care bathing visits on a flat fee basis at $25 per visit to clients of Home Health. Plaintiff did not provide any client of either employer with ostomy care, medically-related repositioning services, or complex or sterile wound care requiring professional training. Plaintiff did not provide clients with housework except for one client on weekends. The housework took minimal time to complete.

         In November 2014, Defendants announced that nurses and physical therapists would start receiving overtime compensation. During the meeting, Plaintiff asked Ms. Echeverria for overtime compensation. Shortly after the meeting, another employee, Joe Cauterucci, told Plaintiff that she was fired. Plaintiff called Ms. Echeverria about this, and Ms. Echeverria assured Plaintiff that she was not fired. After Human Resources investigated the matter, Mr. Cauterucci apologized to Plaintiff for mistakenly telling her that she was fired. Plaintiff signed a letter that released Defendants from any claims arising from this incident.

         Plaintiff reported her time using different time-cards depending on whether she performed work for Home Health or Staffing Services. When Plaintiff combined her hours worked for Home Health and Staffing Services, she worked more than forty hours per week between January 1, 2015, and July 31, 2015. She did not receive overtime compensation at one and a half times her normal pay rate for these hours. Plaintiff has not worked more than forty hours per week for either Home Health and/or Staffing Services since July 31, 2015.

         Plaintiff did not have any reduction of patients in April, May, or June of 2015. In July 2015, Plaintiff's work hours with Staffing Services decreased when one of her primary patients died. In October 2015, Plaintiff stopped working for Staffing Services altogether when she requested a reassignment from one of her patients. In both November 2015 and January 2016, Home Health offered Plaintiff full-time employment. She declined it.

         On November 25, 2015, Plaintiff filed the present action in federal court. With the Court's permission, Plaintiff filed an Amended Complaint on March 31, 2016, which listed three counts: (1) violation of the Fair Labor Standards Act ("FLSA") overtime requirements; (2) quantum meruit; and (3) FLSA retaliation. On October 28, 2016, Plaintiff moved for Partial Summary Judgment on Count One, and Defendants moved for Summary Judgment on all counts. In her Opposition to Defendants' Motion for Summary Judgment, Plaintiff conceded that she is not entitled to recovery on Count Two for quantum meruit.

         Under Federal Rule of Civil Procedure 56, a court should grant summary judgment if the pleadings and evidence show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In reviewing a motion for summary judgment, the court views the facts in the light most favorable to the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Once a motion for summary judgment is properly made, the opposing party has the burden to show that a genuine dispute of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

         First, Defendants are entitled to summary judgment on Count One. The FLSA requires employers to pay overtime compensation at time and a half to any non-exempt employee for any hours worked in excess of forty hours per week. 29 U.S.C. § 207. There are exemptions to the FLSA requirement, such as the "companionship services" exemption. The companionship exemption was changed in 2015. Previously, this exemption excused employers from paying overtime compensation to employees who provided fellowship and protection to elderly, injured, ill, or disabled persons. This exemption did not apply to an employee who provided skilled care requiring medical training or performed a substantial amount of housework.

         The Department of Labor ("DOL") amended the "companionship services" exemption to broaden the FLSA's overtime compensation. Under the amended rule, third-party home health care providers of direct care workers cannot claim the companionship exemption. The new DOL rule was set to take effect on January 1, 2015. In December 2014, the Home Care Association of America challenged the new rule in the U.S. District Court for the District of Columbia. The District Court stayed the new rule and then held that the rule exceeded the DOI/s rule-making authority. The DOL appealed to the D.C. Circuit Court of Appeals, who reversed and held that the new rule was valid. On October 13, 2015, the D.C. Circuit issued its mandate and reinstated the new rule. The DOL issued a notice that it would not enforce violations of the new rule prior to November 12, 2015.

         On the overtime issue, Plaintiff asserts that the new DOL rule entitles her to overtime pay for hours worked in excess of forty hours per week between January 1, 2015, and July 31, 2015. The parties agree that Plaintiff is entitled to overtime pay if the new rule was effective on January 1, 2015. If the new rule was not yet effective until the D.C. Circuit issued its mandate, then Plaintiff is not entitled to overtime compensation because she provided companionship services.

         The new DOL rule was not yet effective during the time for which Plaintiff claims she is entitled to overtime compensation. The sequence of events created a legal nullity, which prevented the DOL rule from becoming effective until the D.C. Circuit's . opinion was made effective with its October 13, 2015, mandate. In this sequence, the rule was set to become effective January 1, 2015, but the DOL rule did not become effective on January 1 because the D.C. District Court stayed the effective date until January 14, 2015. On January 14, 2015, the D.C. District Court vacated the DOL rule, reasoning that the rule exceeded the DOL's rule-making authority. Accordingly, the DOL rule did not become effective until the D.C. Circuit reversed and issued a mandate, making the reversal effective.

         Plaintiff argues that the D.C. Circuit's opinion should be given full retroactive effect, making the new DOL rule valid as of January 1, 2015, and entitling her to overtime compensation. This argument is unpersuasive because the DOL rule was a legal nullity during the time-frame for which Plaintiff seeks overtime pay. Furthermore, if the rule was given full retroactive effect, it would unfairly force employers to pay overtime compensation for hours worked when overtime pay for companionship services was not required from employers nor expected by employees. Thus, the former ...

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