Ader v. Simonmed Imaging Inc.

• Decision Date: 10 June 2020
• Docket Number: No. CV-17-02085-PHX-JJT,CV-17-02085-PHX-JJT
• Citation: 465 F.Supp.3d 953
• Parties: Keith ADER, et al., Plaintiffs, v. SIMONMED IMAGING INCORPORATED, et al., Defendants.
• Court: U.S. District Court — District of Arizona

465 F.Supp.3d 953

Keith ADER, et al., Plaintiffs,

v.SIMONMED IMAGING INCORPORATED, et al., Defendants.

No. CV-17-02085-PHX-JJT

United States District Court, D. Arizona.

Signed June 10, 2020

Daniel Lee Bonnett, Jennifer Lynn Kroll, Susan Joan Martin, Michael Martin Licata, Martin & Bonnett PLLC, Phoenix, AZ, for Plaintiffs.

Christopher Miller Suffecool, Cory G. Walker, Peter Christopher Prynkiewicz, Littler Mendelson PC, Phoenix, AZ, for Defendants.

ORDER

John J. Tuchi, United States District Judge

At issue is Defendants’ Motion for Partial Summary Judgment (Doc. 150, Def. Mot.) and Statement of Facts (Doc. 151, DSOF), to which Plaintiffs filed a Response (Doc. 161, Pl. Resp.), a Controverting Statement of Facts (Doc. 162, Pl. CSOF), and a Supplemental Declaration with Exhibits (Doc. 163), and Defendants filed a Reply (Doc. 166). Also at issue is Plaintiffs’ cross-Motion for Partial Summary Judgment (Doc. 152, Pl. Mot.), Statement of Facts (Doc. 153, PSOF), and Declaration with Exhibits (Doc. 154), to which Defendants filed a Response (Doc. 164, Def. Resp.) and a Controverting Statement of Facts (Doc. 159, Def. CSOF) and Plaintiffs filed a Reply (Doc. 165).

For the following reasons, the Court grants in part and denies in part Plaintiffs’ Motion and denies Defendants’ Motion.

I. BACKGROUND

This collective action is brought under the Fair Labor Standards Act ("FLSA") and various state wage and labor laws. Plaintiffs Keith Ader and Jeffrey Cochran and Opt-In Plaintiffs John Cimino, Peter Nerat, and Lawrence Ginsberg (collectively, "Plaintiffs") were all employed as Field Service Engineers ("FSE")¹ by Defendants SMI Imaging, LLC ("SMI") and SimonMed Imaging Incorporated ("SimonMed"). SimonMed is an outpatient medical imaging and radiology provider. (Doc. 86, Fourth Am. Compl. ("FAC") ¶ 31; Doc. 87, Answer ¶ 31.) Defendant Howard John Simon ("Dr. Simon") is the President, CEO, and sole director of SimonMed, and SimonMed is the only LLC member of SMI. (FAC ¶ 14; Answer ¶ 14; Def. Mot. at 13.)

Although some details surrounding the duties of an FSE are in dispute, the parties generally agree that FSEs perform installations and deinstallations, preventative maintenance, and repairs of medical diagnostic equipment used or operated by SimonMed. Different FSEs may specialize in different machines by different manufacturers. For example, while one FSE might focus on mammography

equipment, another may work primarily with Siemens-manufactured CT Scans

.

From September 2014—when Ader and Cochran were hired—until April 2017, FSEs were salaried employees and treated as exempt under the FLSA. (See PSOF ¶ 59; Def. CSOF ¶ 59.) Consequently, they did not receive overtimes wages during that time period. However, Plaintiffs were told that they could receive compensatory time for weeks in which they worked excessive hours. (See Doc. 154 Ex. 13 at 93–94.) The availability of compensatory time allegedly ceased sometime in 2016. In April 2017, Defendants reclassified the FSEs as salaried, non-exempt workers and began paying overtime wages. (PSOF ¶ 41; Def. CSOF ¶¶ 41, 43.) Plaintiffs’ exempt status and lack of overtime wages from 2014 through 2017 are at the center of this dispute.

The parties stipulated to conditionally certify an FLSA collective action and opt-in class of FSEs. (Doc. 68.) The Fourth Amended Complaint alleges the following claims:

• Count 1: violations of the FLSA overtime provisions, see 29 U.S.C. § 207, on behalf of Plaintiffs and all FLSA class members;

• Count 2: violations of the Arizona Wage Act, see A.R.S. § 23-350 et seq. , on behalf of Plaintiffs and all class members;

• Counts 3 & 4: retaliation in violation of the FLSA, see 29 U.S.C. § 215, on behalf of Ader and Cochran, respectively; and

• Count 5, failure to pay overtime in violation of California state law, see Cal. Lab. Code § 1194, on behalf of Ader and Cochran.

Defendants now move for partial summary judgment on the overtime claims in Counts 1 and 5, and on Cochran's retaliation claim, Count 4. (Def. Mot. at 17.) As to the overtime claims, Defendants argue Plaintiffs were properly classified as exempt employees and therefore not entitled to overtime wages. Defendants maintain that even if the Court finds Plaintiffs were misclassified, they are not entitled to overtime because they cannot establish the amount and extent of their overtime worked as a matter of just and reasonable inference. Alternatively, Defendants argue that if the Court concludes Plaintiffs have sufficiently established the amount of overtime worked, Plaintiffs are only eligible for back overtime pay at a rate of one-half their regular rate, as opposed to time-and-a-half. Defendants also move for summary judgment on the issue of whether Dr. Simon is personally liable for any potential wage violations. Finally, Defendants request the court dismiss Cochran's retaliation claim.

Plaintiffs cross-move for partial summary judgment on Count 1. They seek a declaration that they (1) were misclassified as exempt employees, (2) are entitled to liquidated damages in an amount to be proven at trial, and (3) are entitled to an overtime rate of 1.5 times their regular rate of pay, which they argue is based on a 40-hour work week. (Pl. Mot. at 1.)

Additionally, both parties move for summary judgment on the issue of whether Defendants’ FLSA violations (if established) were willful, such that the statute of limitations is extended from two to three years.

II. LEGAL STANDARD

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when: (1) the movant shows that there is no genuine dispute as to any material fact; and (2) after viewing the evidence most favorably to the non-moving party, the movant is entitled to prevail as a matter of law. Fed. R. Civ. P. 56 ; Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Eisenberg v. Ins. Co. of N. Am. , 815 F.2d 1285, 1288–89 (9th Cir. 1987). Under this standard, "[o]nly disputes over facts that might affect the outcome of the suit under governing [substantive] law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A "genuine issue" of material fact arises only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

In considering a motion for summary judgment, the Court must regard as true the non-moving party's evidence, if it is supported by affidavits or other evidentiary material. Celotex , 477 U.S. at 324, 106 S.Ct. 2548 ; Eisenberg , 815 F.2d at 1289. However, the non-moving party may not merely rest on its pleadings; it must produce some significant probative evidence tending to contradict the moving party's allegations, thereby creating a material question of fact. Anderson , 477 U.S. at 256–57, 106 S.Ct. 2505 (holding that the plaintiff must present affirmative evidence in order to defeat a properly supported motion for summary judgment); First Nat'l Bank of Ariz. v. Cities Serv. Co. , 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968).

"A summary judgment motion cannot be defeated by relying solely on conclusory allegations unsupported by factual data." Taylor v. List , 880 F.2d 1040, 1045 (9th Cir. 1989). "Summary judgment must be entered ‘against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.’ " United States v. Carter, 906 F.2d 1375, 1376 (9th Cir. 1990) (quoting Celotex , 477 U.S. at 322, 106 S.Ct. 2548 ).

III. ANALYSIS

A. Learned Professional Exemption

The first issue the Court must answer, and on which all other overtime issues depend, is whether Plaintiffs were properly classified as exempt before 2017. The FLSA mandates that employers pay overtime compensation for time worked in excess of 40 hours in a week unless an exemption applies. 29 U.S.C. § 207(a)(1). Whether an exemption applies is a question of law, but the underlying facts pertaining to an employee's job duties may involve questions of fact. See Solis v. Washington , 656 F.3d 1079, 1083 (9th Cir. 2011). Thus, if no genuine dispute exists as to an FSE's job duties, the Court can hold as a matter of law that Plaintiffs either do or do not fall into an exemption.

As the employer, Defendants bear the burden of establishing an exemption applies. Klem v. Cty. of Santa Clara , 208 F.3d 1085, 1089 (9th Cir. 2000). The FLSA exemptions "are to be withheld except as to persons plainly and unmistakably within their terms and spirit." Id. The criteria in regulations is "absolute," such that the employer must prove an employee "meets every requirement before the employee will be deprived of the protection of the Act." Bothell v. Phase Metrics, Inc. , 299 F.3d 1120, 1125 (9th Cir. 2002).

Defendants contend the learned professional exemption applies.² See 29 U.S.C. § 213 ; 29 C.F.R. § 541.300. For Plaintiffs to qualify for this exemption, their primary duty must (1) require advanced knowledge in (2) a field of science or learning that is (3) customarily acquired by a prolonged course of specialized intellectual instruction. 29 C.F.R. § 541.301. Defendants must show all three elements are satisfied; Plaintiffs argue that none are. However, because an FSE's knowledge is not "customarily acquired by a prolonged course of specialized intellectual instruction," the Court finds the exemption does not apply and declines to address the first and second prongs.

By including the third prong in the learned professional exemption, the regulations "restrict[ ] the exemption to professions where specialized academic training is a standard prerequisite for entrance into the profession." 29 C.F.R. § 541.301(d).³ The exemption is not available for occupations that "customarily may be performed with only the general knowledge acquired by an academic degree in any field, with knowledge...