Howell v. Advantage RN, LLC, Case No.: 17-CV-883 JLS (BLM)

CourtUnited States District Courts. 9th Circuit. United States District Court (Southern District of California)
Writing for the CourtHon. Janis L. Sammartino, United States District Judge
Citation401 F.Supp.3d 1078
Parties Emily HOWELL, an individual on behalf of herself and others similarly situated, Plaintiff, v. ADVANTAGE RN, LLC; and Does 1 through 10, Defendants.
Decision Date16 August 2019
Docket NumberCase No.: 17-CV-883 JLS (BLM)

401 F.Supp.3d 1078

Emily HOWELL, an individual on behalf of herself and others similarly situated, Plaintiff,
v.
ADVANTAGE RN, LLC; and Does 1 through 10, Defendants.

Case No.: 17-CV-883 JLS (BLM)

United States District Court, S.D. California.

Signed August 16, 2019


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Kye Douglas Pawlenko, Matthew B. Hayes, Hayes Pawlenko LLP, Pasadena, CA, for Plaintiff.

Kenneth D. Sulzer, Sarah Kroll-Rosenbaum, Anthony David Sbardellati, Sayaka Karitani, Steven B. Katz, Constangy, Brooks, Smith & Prophete, LLP, Joanna E. MacMillan, Los Angeles, CA, for Defendants.

ORDER: (1) DENYING DEFENDANT'S MOTION TO MODIFY THE END OF THE CLASS PERIOD, (2) DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT, AND (3) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

(ECF Nos. 54, 56, 63)

Hon. Janis L. Sammartino, United States District Judge

Presently before the Court are Defendant Advantage RN, LLC's Motions for an Order (1) Modifying the End of the Class Period to Reflect the Date Defendant Ceased Operations and (2) Permitting Defendant to Provide Notice to Individuals Erroneously Notified of Class and Collective Actions ("Mot. to Modify," ECF No. 54) and for Partial Summary Judgment ("Def.'s MSJ," ECF No. 56) and Plaintiff Emily Howell's Motion for Partial Summary Judgment as to Liability Only ("Pl.'s MSJ," ECF No. 63). Also before the Court are Plaintiff's oppositions to Defendant's Motions to Modify ("Modify Opp'n," ECF No. 65) and for Summary Judgment ("Pl.'s MSJ Opp'n," ECF No. 66) and Defendant's opposition to Plaintiff's Motion for Summary Judgment ("Def.'s MSJ Opp'n," ECF No. 69), as well as Defendant's replies in support of its Motions to Modify ("Modify Reply," ECF No. 70) and for Summary Judgment ("Def.'s MSJ Reply," ECF No. 69) and Plaintiff's reply in support of its Motion for Summary Judgment ("Pl.'s MSJ Reply," ECF No. 71). The Court heard oral argument on July 18, 2019. See ECF No. 77. Having carefully considered the Parties' arguments, the law, and the evidence, the Court DENIES Defendant's Motion to Modify, DENIES Defendant's Motion for Summary Judgment, and GRANTS IN PART AND DENIES IN PART Plaintiff's Motion for Summary Judgment as follows.

BACKGROUND

I. Undisputed Facts

A. Defendant and Employment with Defendant

Defendant is a health care staffing company that placed nurses and other medical professionals ("Travelers") on temporary assignments at hospitals and other health

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care facilities across the country.1 ECF No. 71-1 at 1–25 ("Def.'s Facts") ¶ 1.

Before a Traveler began a specific travel assignment with Advantage RN, he or she signed a Travel Assignment Confirmation. Def.'s Facts ¶ 2. The Travel Assignment Confirmation set forth the terms and conditions of a Traveler's assignment, including its location, length, start and end dates, minimum required weekly hours, and hourly rates. Id. ¶ 3.

Most travel assignments were thirteen weeks long, id. ¶ 7, and most Travelers were contracted to work three twelve-hour shifts per week. Id. ¶ 8. The minimum required weekly hours was either 36 or 40 hours per week, depending on the hospital. ECF No. 68-1 at 1–20 ("Pl.'s Facts") ¶ 12. The average base hourly rate Defendant paid to registered nurses and surgical technicians working in California between May 3, 2013, and June 30, 2017, was $23.13 per hour, ECF No. 71-1 at 26–37 ("Pl.'s Add'l Facts") ¶ 12, whereas the average pay rate for registered nurses in California was approximately $49 to $50 per hour. Id. ¶ 13.

Most of the assignments that Travelers worked for Defendant also were located 100 or more miles away from their permanent residences, Def.'s Facts ¶ 11, meaning Travelers incurred meal, incidental, and lodging expenses on behalf of Defendant associated with being away from home at their assignment location. Id. ¶ 12.

B. Per Diem Stipends

Defendant provided Travelers per diems to reimburse meal, incidental, and lodging expenses incurred by Travelers working 100 or more miles away from their permanent residences. Def.'s Facts ¶ 13. If the Traveler qualified to receive a per diem, the Travel Assignment Confirmation set forth the amount of the per diem allowance. Id. ¶ 4.

Defendant used the localized per diem ("CONUS") rates set by the federal government through the General Services Administration ("GSA") and Internal Revenue Service ("IRS") to determine the maximum reasonable per diem for a given assignment. Id. ¶ 15. Consequently, the maximum per diem available to Travelers varied from assignment to assignment based on the applicable CONUS rates for the assignment location. Id. ¶ 16. When the per diem was below the CONUS rates by a certain level, Defendant would allow recruiters to reduce the hourly wage rate for a Traveler by a few dollars and increase the per diem rate accordingly, id. ¶ 6, so long as the per diem did not exceed the CONUS rate. See id. ¶ 17.

The average weekly per diem stipend Defendant paid to registered nurses and surgical technicians working in California between May 3, 2013, and June 30, 2017, was $960.45 per week. Pl.'s Add'l Facts ¶ 14. The full weekly per diem stipend consisted of seven days' worth of meal and incidental housing stipends. Pl.'s Facts ¶ 14. A Traveler did not need to submit any verification of expenses to receive the stipend, id. ¶ 36, and Defendant did not restrict how the per diem stipends could be used. Id. ¶ 37.

In their Travel Assignment Confirmations, Travelers agreed to have a proportional adjustment, known as the Missed Shift Adjustment ("MSA"), applied to their per diems when they worked fewer than the minimum hours they agreed to work. Def.'s Facts ¶ 21. Prior to May 1, 2017, adjustments were made at a flat hourly rate for each hour that a traveler worked below her required minimum, id. ¶ 23, and

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Travelers assessed a MSA could earn back the deduction by making up any missed hours. Pl.'s Facts ¶ 23. Between January 5, 2015, and May 1, 2017, adjustments were made only if a Traveler missed more than two hours of work in a week, Def.'s Facts ¶ 24, whereas before January 5, 2015, adjustments were made whenever a Traveler fell below the minimum required hours for the week. Id. ¶ 25. After May 1, 2017, Defendant's policy changed to make proportional adjustments based on the number of shifts missed. Id. ¶ 26. Defendant calculated a Traveler's "minimum number of shifts" by dividing the total number of contracted hours in a week by the number of hours the Traveler was scheduled to work per shift. Id. ¶ 27. If, for example, a Traveler missed one of her three contracted shifts in a week, her per diem for the week would be adjusted by one-third. Id. ¶ 29. The MSA showed up as a separate line item on the Traveler's paystub. Pl.'s Facts ¶ 18.

The 2014 Advantage RN Recruiter Training manual describes Defendant's Pay Structure as the "Tax Advantage Program." ECF No. 63-4 at 77.2 Under the Tax Advantage Program, a "Traveler receive[d] a Taxable hourly rate plus a weekly tax free Per Diem (stipend; reimbursement)," with "the end result [being] generally a higher weekly take home pay." Id. For example, a Traveler who was scheduled to work three twelve-hour shifts per week might take home $1260 per week under the Tax Advantage Program, consisting of a $20 per hour taxable wage plus a non-taxable $720 weekly per diem, while a "Fully Taxed" worker earning $37 per hour would take home only $999 per week for the same number of hours worked. Id. The manual also invited recruiters to explain the MSA to Travelers on the basis that "[Advantage RN] c[ould] only bill the hospital for the hours [a Traveler] work[ed], in turn [Advantage RN] c[ould] only pay [a Traveler] for hours [he or she] actually work[ed]." Id. at 79.

When calculating a Traveler's "regular rate" for purposes of calculating overtime, Defendant did not include the value of the per diem stipend. Pl.'s Facts ¶ 44.

C. Bonuses

Defendant also commonly paid Travelers one or more monetary bonuses, including "extension," "loyalty," and "completion" bonuses. Pl.'s Facts ¶ 45. An "extension" bonus was paid for extending an assignment, id. ¶ 46, a "loyalty" bonus for returning for a new assignment, id. ¶ 47, and a "completion" bonus for completing an assignment. Id. ¶ 48.

The specific dollar amount of each of these bonuses and the conditions under which they were to be paid were set forth in the Travel Assignment Confirmation. Id. ¶ 49. A Traveler was typically guaranteed a bonus if she satisfied the conditions for earning the bonus specified in the Travel Assignment Confirmation. Id. ¶ 50.

When calculating a Traveler's "regular rate" for purposes of calculating overtime, Defendant did not include the bonuses. Pl.'s Facts ¶ 51.

D. Plaintiff Emily Howell's Employment with Defendant

From February 2016 through October 2016,...

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