Carlino v. CHG Med. Staffing

• Decision Date: 05 October 2022
• Docket Number: 1:17-cv-01323-DAD-BAK (EPG)
• Parties: JACQUELINE CARLINO, an individual on behalf of herself and others similarly situated, Plaintiff, v. CHG MEDICAL STAFFING, INC., Defendant.
• Court: U.S. District Court — Eastern District of California

JACQUELINE CARLINO, an individual on behalf of herself and others similarly situated, Plaintiff, v. CHG MEDICAL STAFFING, INC., Defendant.

No. 1:17-cv-01323-DAD-BAK (EPG)

United States District Court, E.D. California

October 5, 2022

ORDER GRANTING PLAINTIFF'S MOTION TO AMEND CLASS AND COLLECTIVE DEFINITIONS AND DENYING DEFENDANT'S MOTION FOR RECONSIDERATION OR, IN THE ALTERNATIVE, DECERTIFICATION (Doc. Nos. 71, 73)

This matter is before the court on plaintiff's motion to amend the certified class and collective definitions, filed on September 29, 2021, and defendant's motion for reconsideration of the court's order granting partial summary judgment in favor of plaintiff, or in the alternative, for decertification of the class and collective filed on September 15, 2021.^[1] (Doc. Nos. 71, 73.)

Pursuant to General Order No. 617 addressing the public health emergency posed by the COVID-19 pandemic, the motions were taken under submission on the papers. (Doc. No. 74.) For the reasons explained below, the court will grant plaintiff's motion to amend the class and collective definitions and deny defendant's motion for reconsideration, or in the alternative, decertification.

BACKGROUND

On September 29, 2017, plaintiff Jacqueline Carlino, a traveling nurse, filed a class and collective action complaint on behalf of herself and others similarly situated against her employer, defendant CHG Medical Staffing Inc. (“CHG”), alleging that CHG violated the Fair Labor Standards Act (“FLSA”) and California state law by failing to pay overtime wages to its staff of traveling nurses and technicians (“travelers”). (Doc. No. 1.) In particular, plaintiff alleges that CHG does not include the value of a weekly per diem (a stipend for meals, incidentals, and housing that travelers receive in addition to their weekly wages) (the “per diem”) in determining a traveler's regular rate for the purpose of calculating that traveler's overtime pay, which is one-and-a-half times the traveler's regular rate. (Id. at ¶¶ 12, 16.)

On February 28, 2019, the court granted plaintiff's motion for class certification pursuant to Federal Rule of Civil Procedure 23(a) and 23(b)(3) and conditional certification of an FLSA collective, certifying the following:

[Rule 23 Class:] All non-exempt hourly healthcare professionals employed in California through the RN Network division of CHG Medical Staffing, Inc., who, at any time from September 29, 2013 through the date of certification, worked overtime and had the value of their meals and incidental stipends, housing allowance, and/or housing accommodation excluded from their regular rate for purposes of calculating overtime pay.

[FLSA Collective:] All non-exempt hourly healthcare professionals employed in the United States through the RN Network division of CHG Medical Staffing, Inc. who, at any time within the three years preceding certification, worked in excess of 40 hours in one or more workweeks and had the value of their meals and incidentals stipend, housing allowance, and/or housing accommodation excluded from their regular rate for purposes of calculating overtime pay.

(Doc. No. 25 at 17-18.)

On May 15, 2022, the court issued an order denying defendant's motion for summary judgment and granting plaintiff's motion for partial summary judgment as to defendant's liability, in part. (Doc. No. 58.) Specifically, the court concluded that “the weekly per diem that CHG furnishes to a traveler constitutes remuneration for hours worked and its value must therefore be included in the traveler's regular rate for the purpose of calculating her overtime pay.” (Id. at 14.) In reaching this conclusion, the court considered not only the fact that the per diem payments are “tied to the number of hours worked in a given week,” but also that several other indicators suggested that the per diems functioned as renumeration for hours worked, including that: “the per diems are included in the employee's weekly electronic deposit or paycheck and appear as two separate line items on traveler's weekly paystub; travelers are not required to provide verification of actual expenses incurred in order to receive the per diem; and CHG does not restrict how the travelers spend the per diems.” (Id. at 10-13.) Accordingly, the court granted “summary judgment in plaintiff's favor on the issue of CHG's liability” as to plaintiff's overtime claims and her derivative claim brought under the Unfair Competition Law (“UCL”). (Id.) The relevant undisputed facts are as follows.

Defendant CHG staffs travelers on short-term travel assignments primarily at hospitals across the United States. (Doc. No. 32 at 2.) Between October 2015 and August 2016, CHG staffed plaintiff Carlino, a permanent resident of Pennsylvania, on three 13-week travel assignments, two in Wisconsin and one in Bakersfield, California. (Id. at 4.) The typical travel assignment lasted thirteen weeks and required employees to be away from their homes for the duration of the assignment. (Id. at 2.) Travelers incurred meal incidental, and lodging expenses while away from their permanent residences at their assignment locations. (Id.) In addition to their weekly wages, travelers were provided weekly per diem payments covering seven days' worth of meals, incidentals, and housing in the form of a housing allowance or company-provided housing. (Id.) To determine the per diem, CHG used the federal government's Continental United States per diem rates set by the General Services Administration and the Internal Revenue Service. (Id.) The per diems were included in travelers' weekly electronic deposits or paychecks and appeared as two separate line items on their weekly paystubs. (Id.) Travelers were not required to provide verification of actual expenses in order to receive per diems, and CHG did not restrict how travelers spent their per diems. (Id.) Whether a traveler is entitled to the full weekly per diem each week is conditioned on whether she has worked the specified minimum weekly hours required by CHG, which is generally thirty-six hours consisting of three twelve-hour shifts.

(Id. at 3.) If a traveler satisfies her weekly hours requirement, she receives her full weekly per diem. (Id.) If, however, she does not satisfy the requirement for any reason other than the client facility cancelling a scheduled shift, her weekly per diem is adjusted by CHG pursuant to a Missed Shift Adjustment (“MSA”). (Id.) The MSA adjusts a specific proportional amount of per diems downward when travelers' weekly hours fall short of their minimum hours requirement. (Id.)

On September 15, 2021, defendant filed the pending motion for reconsideration of the court's order granting partial summary judgment in plaintiff's favor as to defendant's liability on plaintiff's overtime claims and derivative UCL claim. (Doc. No. 71.) In the alternative, defendant moved for an order decertifying the Rule 23 class and FLSA collective. (Id.) Plaintiff filed an opposition to defendant's pending motion on October 15, 2021, and defendant filed its reply thereto on October 29, 2021. (Doc. Nos. 75, 76.)

On September 29, 2021, plaintiff filed the pending motion to amend the definitions of the Rule 23 class and the FLSA collective. (Doc. No. 73.) Defendant filed an opposition to plaintiff's motion on November 1, 2021, and plaintiff filed her reply thereto on November 8, 2021. (Doc. Nos. 77, 78.)

While the motions have been pending before the court, the parties have also filed notices of supplemental authority and responses thereto. (Doc. Nos. 85, 88-92.)

DISCUSSION

A. Plaintiff's Motion to Amend the Class and Collective Definitions

Rule 23 provides that “[a]n order that grants or denies class certification may be altered or amended before final judgment.” Fed.R.Civ.P. 23(c)(1)(C). Thus “[e]ven after a certification order is entered, the judge remains free to modify it in the light of subsequent developments in the litigation.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982); see also Roy v. Cnty. of Los Angeles, No. 1:12-cv-09012-AB-FFM, 2018 WL 3435417, at *2 (C.D. Cal. July 11, 2018) (noting that “the district court retains flexibility and is free to modify a class definition in light of developments during the course of litigation”). Courts also have broad discretion to modify class definitions and to grant plaintiffs leave to amend class definitions. See Williams v. City of Antioch, No. 4:08-cv-02301-SBA, 2010 WL 3632197, at *7 (N.D. Cal. Sept. 2, 2010) (citing Powers v. Hamilton Cnty. Pub. Def. Comm n, 501 F.3d 592, 619 (6th Cir. 2007) (noting that district courts “must be vigilant to ensure that a certified class is properly constituted” and “make appropriate adjustments to the class definition as the litigation progresses]”). “Consequently, courts retain discretion to revisit class certification throughout the legal proceedings, and may rescind, modify, or amend the class definition,” though any amendment to the class definition must still satisfy Rule 23's requirements. Howell v. Advantage RN, LLC, 401 F.Supp.3d 1078, 1085 (S.D. Cal. 2019) (citations and internal quotation marks omitted); see, e.g., Ruiz Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1139 (9th Cir. 2016) (concluding that the defined class fits plaintiff's legal theory of defendant's liability and noting that “[a]s the case progresses, the district court may elect to separate the class into subclasses, or adjust the scope of the class definition, if it later finds that the inclusiveness of the class exceeds the limits of [defendant's] legal liability under” plaintiff's theory.) Courts have similar discretion to modify the definition of a conditionally certified FLSA collective. See Droesch v. Wells Fargo Bank, N.A., No. 20-cv-06751-JSC, 2021...