Katz v. Nw. Orthopaedics & Sports Med. Ltd.
| Decision Date | 27 April 2020 |
| Docket Number | No. 18 CV 4515,18 CV 4515 |
| Parties | SHIRLEY KATZ, Plaintiff, v. NORTHWEST ORTHOPAEDICS AND SPORTS MEDICINE LTD., et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Plaintiff Shirley Katz worked as an occupational therapist for defendant Northwest Orthopaedics and Sports Medicine for nearly 20 years. When her husband was diagnosed with cancer, Katz took a leave of absence to care for him. Her managers at the clinic told her to take as much time as she needed to be with her family. According to Katz, when she tried to return to work, the clinic offered her only a position as an independent contractor. Katz alleges that Northwest and some of its owners and employees violated the Family and Medical Leave Act by denying her reinstatement to her original job. She also brings state-law claims, including breach of contract, promissory estoppel, tortious interference with contract, fraudulent misrepresentation, and intentional infliction of emotional distress. Northwest moves for summary judgment on all claims. For the reasons discussed below, the motion is granted in part, denied in part.
Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine dispute as to any material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). I construe all facts and draw all inferences in favor of the nonmoving party. Robertson v. Dep't of Health Servs., 949 F.3d 371, 377-78 (7th Cir. 2020).
Katz worked as an occupational therapist for Northwest Orthopaedics. [51] ¶ 8; [56] ¶ 1.1 Northwest provided orthopedic surgery, physical therapy, and occupational therapy to patients, with an emphasis on sports medicine. [51] ¶ 2. Alan McCall, Brian McCall, Gregory Fahrenbach, Richard Hayek, Christopher Mahr, and Todd Rimington, all orthopedic surgeons, were Northwest's shareholders. [51] ¶ 3. Chris Volanti was the clinic's director of operations, and Regina Roderick was the clinic manager. [51] ¶¶ 3, 5. Roderick oversaw the physical therapists, occupational therapists, therapist aides, billing department, and front office staff, as well as provided physical therapy to patients. [51] ¶¶ 3, 5; [56] ¶ 4. She reported to Volanti. [51] ¶ 5.
The clinic's shareholders held regular meetings to discuss clinic business. [51] ¶ 6. All shareholders had equal votes. [51] ¶ 4. Not all of the shareholders attended these meetings; Alan McCall was semi-retired, did not have any administrative responsibilities, rarely attended shareholders' meetings, and was not involved in any personnel decisions regarding Katz. [51] ¶ 7. Likewise, Fahrenbach worked only part-time due to health issues; he also rarely attended shareholders' meetings. [51] ¶ 7. Volanti typically attended the meetings and implemented decisions the shareholders made about Northwest's staff or independent contractors. [51] ¶ 6. Roderick did not attend the meetings. [51] ¶ 6.
In late 1997, Northwest hired Katz as a full-time occupational therapist, and she began working there in 1998. [51] ¶ 8; [56] ¶ 1.2 She did not remember ever signing an employment contract; she was hired as an at-will employee. [51] ¶ 8. Katz received a copy of Northwest's employee manual, which stated that the clinic "reserves the right to revise or terminate any or all policies, procedures or benefits in whole or in part with or without notice at any time." [51] ¶ 9. The handbook stated that all employment was at-will, and that the manual itself was not an employment contract. [51] ¶ 9. The manual also included an FMLA policy, which mirrored the language in the federal statute. [51] ¶ 9. Katz did not report to the physician shareholders. [51] ¶ 8.
When Katz started at Northwest, she worked 7 a.m. to 3:30 p.m. Monday through Friday. [51] ¶ 8; [56] ¶ 1. When she had to miss a day, a part-time contractor typically covered her shifts. [56] ¶ 1. Later, in 2013, Northwest and Katz agreed that Katz would work 67 hours during every two-week pay period, from 8:30 a.m. to 6:30 p.m. on Mondays and Wednesdays, and from 8:30 a.m. to 3:15 p.m. on Tuesdays and Thursdays. [51] ¶¶ 10, 52.3 In 2014, 2015, 2016, and 2017, Katz averaged 55.94, 51.07, 57, and 58 hours, respectively, per two-week pay period. [51] ¶ 11. The parties dispute whether Katz was a full-time employee at that point or, as the clinic asserts, she had converted herself into a part-time employee. [51] ¶ 12. Brian McCall and Volanti both testified that Katz was "technically" a full-time employee, but she did not work full-time hours. [50-1] at 45, ¶¶ 13, 14; [50-2] at 7, ¶ 12. Brian McCall further testified that Katz was "never a part-time employee," but was "always a full-time employee." [54-11] 65:15-16.
Generally, the doctors at Northwest thought Katz had a good rapport with the patients, a good work ethic, and considered themselves to have a friendly relationship with her. [56] ¶ 2. But the clinic's management was unhappy that Katz was not working the hours she was supposed to work. [51] ¶ 12. In April 2017, Katz requested a salary increase in writing. [51] ¶ 13.
Later that month, at a shareholders' meeting, the clinic's shareholders decided to terminate Katz, based both on her request for more pay and her falling short on her hours. [51] ¶ 13.4 At that point, Katz had not told Northwest's management that her husband was ill, or that she needed to take time off to care for him. [51] ¶ 14.
Northwest's managers decided to hire Katz's replacement before telling Katz that they were firing her. [51] ¶ 15. In May, Volanti and Roderick hired a staffing company to search for a replacement, and reached an agreement with that company to hire Dan Gabel on a temporary basis for 13 weeks; after that time, the clinic could hire Gabel as a full-time occupational therapist if it wanted to. [51] ¶¶ 16-17. Gabel was scheduled to start in July. [51] ¶ 18.
Volanti scheduled a meeting on June 8 to tell Katz that she was being fired. [51] ¶ 18.5 On June 7, Katz's husband was diagnosed with metastatic melanoma. [56] ¶ 9. At the meeting the next day, before Volanti could tell Katz about the termination decision, Katz told Volanti that her husband had been diagnosed with cancer. [51] ¶ 18. Volanti opted not to tell Katz that she was being fired, and instead told her to take any time off that she needed, and that she could work if she wanted to. [51] ¶ 20. The clinic decided not to fire Katz, but did not withdraw its employment offer to Gabel. [51] ¶ 21; [56] ¶ 12. Katz used a few paid-time-off days in the following weeks to bring her husband to doctor's appointments; she worked four days the week of June 19. [56] ¶ 9. Katz took a leave of absence to care for her husband beginning June 22. [51] ¶ 22; [56] ¶ 9. Roderick told Katz that Gabel would cover for Katz while she was on leave. [51] ¶¶ 22, 26. Although she was on unpaid leave, Katz had enough paid time off accrued to last until sometime in July, so she received a regular paycheck. [51] ¶ 28. After that, Katz continued to receive her normal salary until mid-September. [51] ¶ 28.
In early August, Roderick asked Katz to access the required FMLA paperwork electronically and to backdate the start date of her leave to June 12. [56] ¶ 10.6 When Roderick later learned Katz could not access the forms electronically, she emailed her the forms. [56] ¶ 10. The clinic never gave Katz an FMLA notice of eligibility, and no one told her how many weeks of leave she was entitled to. [56] ¶ 10. Katz ultimately submitted an FMLA certification. [51] ¶ 22.
While Katz was on leave, Northwest began to restructure. [51] ¶ 35. Northwest switched its employee health insurance company from Blue Cross Blue Shield to Aetna. [51] ¶ 31. To comply with the Aetna plan, Northwest cut its workforce to fewer than 50 employees, expanded the clinic's hours to accommodate patients before and after the typical workday, and eliminated all part-time positions. [51] ¶ 31-34; [56] ¶ [3]. No one told Katz during her leave that the clinic had restructured, that it changed its hours, or that it intended to eliminate part-time employees. [56] ¶ 27.
Northwest gave part-time employees the option to either work full-time hours or to work as independent contractors on an hourly basis. [51] ¶¶ 34-36.7 The clinic continued to hire part-time employees during the summer and fall of 2017, although those employees later converted to full-time employees. [51] ¶¶ 35-36; [56] ¶ 29. At least two therapists or therapist aides transitioned into independent contractors. [51] ¶¶ 35-36.
In July, Gabel began working as a full-time occupational therapist. [51] ¶ 37. He worked Monday through Friday, including evening hours, amounting to about 80 hours every two weeks. [51] ¶ 37. A month later, Gabel announced he was moving to Montana. [51] ¶ 38. At that point, Katz was still caring for her husband and she had not set a date to return to work. [51] ¶ 38. Volanti and Roderick felt that the clinic needed another full-time occupational therapist, regardless of when Katz returned to Northwest, and began searching for a replacement. [51] ¶ 39-40; [56] ¶ [13].8 Tina Bailey responded to the clinic's job posting, and in late August, Volanti interviewed Bailey. [51] ¶¶ 41-42; [56] ¶ 14.
Katz's husband died shortly thereafter, leaving her the sole caretaker for her three children. [51] ¶ 29; [56] ¶ 11. Alan and Brian McCall attended the memorial service for Katz's husband. [56] ¶ 31. At her home during shiva, Katz told Brian McCall that she wanted to return to work in about a month, and McCall said that was fine, and that the work would be there when she was ready to return. [51] ¶ 25; [56] ¶ 11.
Other than that conversation with McCall, none of the...
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