Alves v. Affiliated Care of Putnam, Inc.

• Decision Date: 30 March 2022
• Docket Number: 16-CV-1593 (KMK)
• Parties: MARIA ALVES, et al., on behalf of all others similarly situated, Plaintiffs, v. AFFILIATED CARE OF PUTNAM, INC., et al, Defendants.
• Court: U.S. District Court — Southern District of New York

MARIA ALVES, et al., on behalf of all others similarly situated, Plaintiffs, v. AFFILIATED CARE OF PUTNAM, INC., et al, Defendants.

No. 16-CV-1593 (KMK)

United States District Court, S.D. New York

March 30, 2022

Nathaniel K. Charny, Esq. H. Joseph Cronen, Esq. Russell Gustavson Wheeler, Esq. Charny & Wheeler PC Rhinebeck, NY Counsel for Plaintiffs

Daniel C. Stafford, Esq. McCabe & Mack LLP Poughkeepsie, NY Counsel for Plaintiffs

Steven Felsenfeld, Esq. Felsenfeld Legal, PLLC Ossining, NY Counsel for Defendants

OPINION & ORDER

KENNETH M. KARAS UNITED STATES DISTRICT JUDGE

Maria Alves (“Alves”), Dirce Freires (“Freires”), Louise Henry (“Henry”) Camile Jones (“Jones”), Anna Maria Silva (“Silva”), Paula Simmonds (“Simmonds”), Leny Smith (“Smith” and collectively, “Plaintiffs”) bring this Action on behalf of themselves and others similarly situated against Affiliated Home Care of Putnam, Inc. (“Affiliated”) and Barbara Kessman (“Kessman” and collectively, “Defendants”), seeking to recover overtime compensation and other damages pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and Article 6 of the New York State Labor Law (“NYLL”) and its corresponding regulations. (Second Am. Compl. (“SAC”) ¶¶ 1-8 (Dkt. No. 262).)^[1] Plaintiffs bring (1) a Motion for Class Certification and Final Certification of the Collective Action, ((Dkt. No. 287), and (2) a Motion for Summary Judgment, (see Not. of Mot. (Dkt. No. 289); Defendants bring their own Motion for Summary Judgment, (Dkt. No. 296).

For the reasons set forth below, Plaintiffs' Motion for Class Certification and Final Certification of the Collective Action is granted in full, Plaintiffs' Motion for Summary Judgment is granted in part and denied in part, and Defendants' Motion for Summary Judgment is denied in full.

I. Background

A. Factual Background

The following facts are taken from the Plaintiffs' Statement Pursuant to Local Rule 56.1, (Pls.' Rule 56.1 Statement in Supp. of Mot. (“Pls.' 56.1”) (Dkt. No. 291)), Defendants' Statement Pursuant to Local Rule 56.1, (Defs.' Rule 56.1 Statement in Opp'n to Mot. (“Defs.' 56.1”) (Dkt. No. 302)), Pls.' Counter Statement Pursuant to Civil Rule 56.1, (Pls.' Counter Statement in Supp. of Mot. (“Pls.' Counter 56.1”) (Dkt. No. 316)), and other documents.^[2] 1. The Parties

During the relevant time period, Plaintiffs were engaged as personal care aids (“PCAs”) and consumer directed personal assistants (“CDPAs”) by Affiliated, the principal shareholder and executive officer of which is Kessman. (Pls.' 56.1 ¶¶ 1, 2.)^[3] In particular, Alves was employed by Affiliated from October 7, 2006, through December 4, 2015. (Pls.' 56.1 ¶ 9.) Alves' responsibilities included “bathing and grooming patients, ” services Alves asserts are “typically provided by home health aides.” (Feb. 2017 Op. & Order (“Feb. 2017 Op.”) 2 (Dkt. No. 33) (citing Am. Compl. ¶ 20 (Dkt. No. 10)).) Alves avers that at the direction of Defendants, she also performed tasks “outside the scope of her employment, ” (id. (citing Am. Compl. ¶ 21)), such as “removing garbage, dusting, cleaning refrigerators, cleaning ovens, cleaning common areas and areas of homes not ordinarily used by patients, shoveling snow, ironing the patients' clothes and sheets, ironing clothes belonging to other members of the household, washing windows and curtains, transporting firewood into homes, and caring for plants and gardens, ” (id. (citing Am. Compl. ¶ 20)). Alves alleges that “[d]espite regularly working in excess of 40 hours per week, ” Defendants never provided her overtime pay. (Id. at 3 (quoting Am. Compl. ¶ 24).) Alves further alleges that she “became aware through observations and conversations that other employees of Defendants performed the same or similar tasks” as Alves and that Alves “observed these employees frequently working over 40 hours per week and not being paid overtime wages.” (Id. (quoting Decl. of Maria Alves (“Alves Decl.”) ¶ 6 (Dkt. No. 15-1)).)

2. The Home Care Final Rule

The following legal background is taken from the Court's February 7, 2017 Opinion & Order, (see Feb. 2017 Op. at 6-7):

Prior to 2015, the FLSA exempted domestic service employees from minimum wage and maximum hour requirements. See 29 U.S.C. § 213(a)(15) (“[Minimum wage and maximum hour provisions of] this title shall not apply with respect to . . . any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves . . . .”). However, the performance of general household work of the type Plaintiffs contend they performed is not exempt from overtime payment if such work exceeded 20 percent of the total weekly hours worked. See 29 C.F.R. § 552.6(b) (“The term companionship services also includes the provision of care if the care is provided attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek.” (emphasis added)).

On October 1, 2013, the Department of Labor (“DOL”) issued the “Home Care Final Rule, ” see Application of the Fair Labor Standards Act to Domestic Service, 78 Fed.Reg. 60, 454 (Oct. 1, 2013) (codified at 29 C.F.R. 552), effecting changes to the DOL's regulations regarding domestic services employment. Among other changes, the new rule precluded third-party employers-such as Defendants-from claiming the exemption under the FLSA's overtime provisions for companionship services or live-in domestic service employees. See 29 C.F.R. § 552.109(a) (“Third party employers of employees engaged in companionship services within the meaning of § 552.6 may not avail themselves of the minimum wage and overtime exemption . . . .”). The Rule was intended to go into effect on January 1, 2015, see 78 Fed.Reg. at 60, 494, however, in June 2014, associations of home care companies filed an action challenging the new rule, see Home Care Ass'n of Am. v. Weil, 76 F.Supp.3d 138 (D.D.C. 2014). In December 2014 and January 2015, the United States District Court for the District of Columbia issued opinions and orders vacating the rule's revised third-party regulation and revised definition of companionship services, respectively. See id. at 148 (“[T]he United States Department of Labor's Third Party Employer regulation, promulgated in 78 Fed.Reg. 60, 557 and to be codified at 29 C.F.R. § 552.109, is hereby VACATED.”); Home Care Ass'n of Am. v. Weil, 78 F.Supp.3d 123, 130 (D.D.C. 2015) (“[T]he United States Department of Labor's regulation defining ‘companionship services,' promulgated in 78 Fed.Reg. 60, 557 and to be codified at 29 C.F.R. § 552.6, is hereby VACATED.”). The DOL appealed, and on October 13, 2015, the Court of Appeals for the District of Columbia Circuit issued a unanimous opinion affirming the validity of the Home Care Final Rule and reversing the orders of the district court. Home Care Ass'n of Am. v. Weil, 799 F.3d 1084, 1097 (D.C. Cir. 2015), cert. denied, 136 S.Ct. 2506 (2016). On October 27, 2015, the DOL said that it would not begin enforcing the final rule until November 12, 2015. See Application of the Fair Labor Standards Act to Domestic Service; Dates of Previously Announced 30-Day Period of Non-Enforcement, 80 Fed.Reg. 65, 646 (codified at 29 C.F.R. § 552).

3. Overtime Payments

Plaintiffs in this Action fall under two categories: (1) PCAs who were paid as W-2 employees, and (2) CDPAs who were paid as 1099 independent contractors.^[4] (See Pls.' Mem. in Supp. of Mot. for Summ. J. (“Pls.' MSJ Mem.”) 4 (Dkt. No. 290) (citing Pls.' 56.1 ¶¶ 11-13, 20); see also Defs.' 56.1 ¶ 10.) Although Defendants concede that they are obligated to pay overtime to the W-2 PCAs, Defendants dispute that they are obligated to pay overtime to the 1099 CDPAs. (See Defs.' 56.1 ¶ 11.)

The Parties do not dispute that in March 2016, upon advice of counsel, Affiliated paid all PCAs their owed overtime from October 13, 2015 forward. (Id. ¶ 13.) However, the Parties dispute whether overtime is owed from the period from January 1, 2015 to October 13, 2015. (See Pls.' Counter 56.1, Part II ¶ 20.)^[5] Additionally, the Parties do not dispute that PCAs must be certified, whereas CDPAs do not require any certification. (Id., Part II ¶¶ 2-3.) The Parties disagree, however, on whether the CDPAs should be categorized as independent contractors, and thus whether the CDPAs are entitled to overtime. (See id., Part II ¶¶ 4, 5, 8-10, 12, 13-18.)

4. Causes of Action

The SAC asserts three claims: (1) failure to pay overtime in violation of the FLSA, (SAC ¶¶ 51-54), (2) failure to pay overtime in violation of the NYLL, (id. ¶¶ 55-57), and (3) failure to provide wage notices and statements in violation of the NYLL, (id. ¶¶ 58-61). Plaintiffs seek liquidated damages as provided for by the FLSA and the NYLL, pre- and post-judgment interest, and any further relief available under the FLSA and the NYLL and its corresponding regulations. (Id., Request for Relief ¶¶ (d)-(e)).^[6] Plaintiffs also request attorney's fees and costs. (Id., Request for Relief ¶¶ (g)-(h)).

B. Procedural History^[7]

Alves filed her original Complaint on March 2, 2016, (Dkt. No. 1), and Defendants filed an Answer on May 2, 2016, (Dkt. No. 9). Alves filed an Amended Complaint on May 12, 2016. (Dkt. No. 10). Defendants filed both an Answer to the Amended Complaint and a Counterclaim against Alves on May 26, 2016. (Dkt. No. 11.) Alves filed an Answer to Defendants' Counterclaim on June 20, 2016. (Dkt. No. 12.)

On August 17, 2016, Alves filed a Motion to Proceed as a Collective Action. (Dkt. Nos. 15, 16.) On September 15, 2016 Defendants filed their Opposition to Alves' Motion, (Dkt. No. 22), and on September...