Elwell v. Univeristy Hospitals Home Care Services

• Decision Date: 09 August 2001
• Docket Number: CROSS-APPELLEE,Nos. 00-3061,DEFENDANT-APPELLANT,PLAINTIFF-APPELLEE,CROSS-APPELLANT,00-3171,s. 00-3061
• Parties: (6th Cir. 2002) WENDY ELWELL,/, v. UNIVERSITY HOSPITALS HOME CARE SERVICES,/ Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 832

276 F.3d 832 (6th Cir. 2002)

WENDY ELWELL, PLAINTIFF-APPELLEE/ CROSS-APPELLANT, v. UNIVERSITY HOSPITALS HOME CARE SERVICES, DEFENDANT-APPELLANT/ CROSS-APPELLEE.

Nos. 00-3061, 00-3171

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: August 9, 2001

Decided and Filed January 11, 2002

Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 98-02472--Paul R. Matia, Chief District Judge. [Copyrighted Material Omitted] Lucian J. Bernard (briefed), Elizabeth Zink (argued and briefed), Pearson, Pearson & Bernard (argued and briefed), Covington, Kentucky, for Wendy Elwell.

Dennis N. LoConti (argued and briefed), Scott H. Schooler (briefed), Forbes, Fields & Associates, Cleveland, Ohio, for University Hospitals Home Care Services.

Before: Moore and Cole, Circuit Judges; Forester, Chief District Judge.^*

OPINION

Moore, Circuit Judge.

On cross-appeals, Plaintiff-Appellee/Cross-Appellant, Wendy Elwell ("Elwell"), and Defendant-Appellant/Cross-Appellee, University Hospitals Home Care Services ("University" or "the hospital"), raise a number of issues arising from Elwell's suit alleging that the hospital had failed to pay her, one of its home health care nurses, overtime wages in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and Ohio's Minimum Fair Wage Standards Act, Ohio Revised Code § 4111 et seq. University appeals the district court's denial of its motion for summary judgment and grant of Elwell's cross-motion for summary judgment on the issue of whether Elwell was a professional, and therefore exempt from the FLSA's overtime requirements. The district court found that Elwell was not paid on a fee basis, as required by the FLSA regulations' definition of a professional, because she received both per-visit fees and hourly compensation. On cross-appeal, Elwell argues that University has not satisfied its burden of showing good faith, and that the district court therefore abused its discretion by not awarding her liquidated damages following a jury verdict in her favor on damages. Elwell further contends that the district court improperly precluded the jury from finding that University's recordkeeping practices constituted a willful violation of the FLSA. We AFFIRM the district court's determination that Elwell was not a professional exempt from the FLSA overtime requirements. We REVERSE the district court's denial of liquidated damages. We AFFIRM the district court's ruling as to the recordkeeping evidence.

I. BACKGROUND

On May 22, 1995, Elwell began working for University as a home health care nurse for the West Side of Cleveland. Elwell's job duties as home health care nurse consisted of "driving to patients' homes or places of residence, providing varied skilled nursing services to patients in accordance with . . . plans of care established for the patients and approved and certified by the patients' attending physician," and "complet[ing] nursing notes and documentation of the services [she] provided to patients." J.A. 81-82.

When Elwell first began employment with University in 1995, she received $30.00 for each medical/surgical visit and $42.00 for each IV infusion visit she completed during the workweek. Additionally, she received a $10.00 payment for completing admissions paperwork for each of her visits and hourly compensation ($17.00 per hour) for the time she spent completing the necessary documentation for each visit. Furthermore, if Elwell completed an infusion visit that lasted longer than two hours, she received an hourly rate for her patient visit.

On July 16, 1996, University changed its compensation plan for home health care nurses by eliminating the additional hourly pay that the nurses received for completing documentation. University made no increase in the nurses' per-visit rates to compensate for the elimination of the additional hourly payments. The hospital also eliminated its policy of reimbursing health home care nurses for "Not Home/Not Found" visits.

On February 10, 1997, University reduced the per-visit rates for medical/surgical visits to $28.00 and for infusion visits to $38.00, plus $8.00 for any patient that was a new admission for services. To be considered a full-time home health care nurse by the hospital, Elwell had to complete a minimum of twenty-five patient visits per week. According to University, it required full-time home health care nurses to complete a minimum of twenty-five visits per week because "the actual time spent with patients during [25] visits, completing associated documentation, traveling to and from [the] visit[s] and discussing the plan of care with medical and health care personnel and the patient[s] and fami[lies] would, together with scheduled meetings, equal forty (40) hours per week." J.A. at 43. The hospital also required Elwell to perform on-call services at least once a week or every ten days (for which she would be compensated at a rate of $3.00 per hour) and to attend regular staff meetings and in-service training (for which she was compensated at a rate of $17.65 per hour), which Elwell testified took approximately four hours per month.

According to Elwell, despite University's estimate of the time required to perform twenty-five visits per week (39 hours), she regularly worked an average of sixty hours per week to complete her required visits, including ten to fifteen hours each week to complete required documentation and telephone calls to patients and physicians. Additionally, Elwell accepted and, on occasion, volunteered for additional visits during the week but was paid regular visit rates for such work. Elwell did not receive compensation at a rate of time and a half for any hours she worked in excess of forty hours a week.

On September 12, 1997, Elwell resigned from University. On October 29, 1998, she filed this lawsuit against University, alleging violations of the overtime provisions in the FLSA. On July 22, 1999, University moved for summary judgment on Elwell's FLSA claim on the ground that Elwell was a professional employee exempt from the FLSA overtime provisions. University argued that Elwell not only possessed the qualifications and duties of a professional as defined by 29 C.F.R. § 541.3 but also was compensated for her services as a professional, in particular on a fee basis, as required by 29 C.F.R. § 541.3(e).

On August 9, 1999, Elwell filed a cross-motion for summary judgment. She argued that University had not paid her on a fee basis because she was also paid on an hourly basis for on-call duties, staff meetings, and in-service training and because she never agreed to the established per-visit fees.

On November 2, 1999, the district court concluded that University had not paid Elwell as a professional as defined in the FLSA, denied University's motion for summary judgment, and granted Elwell's motion for summary judgment. The district court explained, "[University] did not pay Elwell an agreed sum regardless of time spent on a particular task but used time estimates for a flat payment amount with an enhancement by an hourly rate if a visit took over two hours." Elwell v. University Hosp. Home Health Care Servs., 76 F. Supp. 2d 805, 807 (N.D. Ohio 1999). The district court noted that, unlike the salary basis regulation for professionals, the fee basis regulation did not allow employers to supplement fees with additional forms of compensation. The court also explained that, unlike the supplemental compensation that is authorized for salaried professionals under the FLSA, i.e., commissions, bonuses, and shift payments, which are linked to "effort and work output[,] . . . Elwell was getting extra pay for extra work," not for work she had already performed. Id. at 808. Finally, the district court asserted that Elwell was not a professional exempt from the FLSA standards because "the character or nature of [her] job was not unique" and thus the hospital's payments to her on a per-visit basis were not of the type contemplated by the FLSA regulations. Id. at 809.

On December 13, 1999, a jury unanimously found for Elwell on her FLSA damages claim in the amount of $25,478. The district court awarded Elwell "prejudgment interest on the amount of the judgment from the date of the filing of the complaint through the date of entry of the judgment," J.A. at 151-52 (D. Ct. Order 1/25/00), and also awarded $49,884.85 in attorneys' fees and costs. J.A. at 164 (D. Ct. Order 2/2/00). The district court did not, however, award Elwell liquidated damages because it found that the hospital had "acted in good faith and had reasonable grounds to believe that its method of payment" to home health care nurses did not violate the FLSA.¹ J.A. at 138 (D. Ct Order 12/14/99). Having resolved Elwell's federal claim under the FLSA, the district court dismissed without prejudice Elwell's state law claim under Ohio's Minimum Fair Wage Standards Act.

On January 7, 2000, University filed a notice of appeal, which was held in abeyance pending the district court's ruling on the motion for reconsideration. Elwell filed a timely notice of cross-appeal on February 1, 2000.

II. ANALYSIS

A. Fee Basis

University argues that the district court erred in granting Elwell's motion for summary judgment because Elwell was paid on a fee basis in accordance with 29 C.F.R. § 541.313(b). Specifically, University argues that the district court erred in concluding that the nature of Elwell's work was not unique and that Elwell was not paid on a fee basis because of the additional hourly pay she received for meetings, in-service training, on-call duty, and infusion visits that lasted longer than two hours. This court reviews de novo a district court's grant of summary judgment. Aiken v. City of Memphis, 190 F.3d 753, 755 (6th Cir. 1999), cert. denied, 528 U.S. 1157 (2000). Summary judgment is proper only when there is no dispute as to a material question of fact and one pa...