Myers v. Iowa Bd. of Regents
| Decision Date | 29 March 2022 |
| Docket Number | Case No. 3:19-cv-00081-SMR-SBJ |
| Parties | Melinda MYERS, Barbara Stanerson, John Eivins, Liv Kelley-Sellnau, Christopher Taylor, and Shuna Tosa, on behalf of themselves and other similarly situated, Plaintiffs, v. IOWA BOARD OF REGENTS, Defendant. |
| Court | U.S. District Court — Southern District of Iowa |
Nathan T. Willems, Rush & Nicholson, Cedar Rapids, IA, Benjamin J. Weber, Pro Hac Vice, Harold L. Lichten, Pro Hac Vice, Lichten & Liss-Riordan, P.C., Boston, MA, for Plaintiffs.
Andrew T. Tice, Lindsay A. Vaught, Jason Michael Craig, Ahlers & Cooney PC, Des Moines, IA, for Defendant.
ORDER ON PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
Before the Court is Plaintiffs’ Motion for Partial Summary Judgment. [ECF No. 66]. They ask the Court to hold that Defendant violated the Iowa Wage Payment Collection Law ("IWPCL") by paying its employees wages later than required by statute and did so intentionally, making it liable for liquidated damages. Id. Further, they request the Court hold that Defendant intentionally paid out vacation and sick benefits beyond the legally permissible time limit. Id. Defendant resists Plaintiffs’ Motion. [ECF No. 69]. For the reasons below, Plaintiffs’ Motion is GRANTED in part and DENIED in part.
Prior to this litigation, the University of Iowa Hospitals and Clinics ("UIHC") used two different systems to pay its employees before changing to a new system.
For one system, UIHC used a monthly pay structure. The pay periods would start on the first day of any given month and end on the last day of the same month. [ECF No. 66-3 at 6] (Black Depo.). The base wage earned for the given month was paid on the first day of the following month. [ECF No. 69-3 at 88] (University of Iowa Operations Manual). Pay adjustments earned during the same pay period, such as "overtime, shift differentials, time without pay, and other adjustments," were paid one month in arrears. [ECF No. 66-3 at 14] (Glanz Depo.). This meant that on December 1, an employee was paid for their November salary and overtime adjustments from October. [ECF No. 69-3 at 88]. UIHC used the system to pay overtime to eligible blue-collar employees and some healthcare professionals under the Fair Labor Standards Act of 1938 ("FLSA"). [ECF No. 66-3 at 6].
UIHC used a second system for healthcare professionals who were ineligible for overtime under the FLSA. [ECF No. 66-3 at 8]. These employees could work up to two-hundred and forty hours over the course of six weeks at a predetermined base rate. Id. Any hours worked beyond the two-hundred and forty hours would be paid at one and a half times their base pay. Id. Payment for the base hours would be disbursed on the first of the next month, but payment for overtime would be dispensed the following month. Id. Under this system, an employee working the six-week period from May 5, 2019 to June 15, 2019 would be paid their base salary for the hours on July 1, 2019 and be paid for the overtime hours on August 1, 2019. Id. at 9.
As it does under current policies, UIHC paid out an employee's vacation and sick leave when they left the organization. [ECF No. 66-3 at 10]. A retiring employee would receive a payout of their vacation and sick time "one month after the last salary check." Id. This rule applied "unless the employee asks to receive those payments on their final salary check." Id. at 11.
On August 12, 2020, UIHC CEO Suresh Gunasekaran gave a live-streamed talk to UIHC employees at which he discussed numerous changes to UIHC's employee pay structures. [ECF No. 66-3 at 11]. For employees paid using a monthly structure, Gunasekaran announced that their pay adjustments would be provided on a "biweekly instead of monthly" basis. Id. at 12. For FLSA exempt employees, i.e., those who work two-hundred and forty hours over six weeks, Gunasekaran stated UIHC was moving them to a system where they would work one-hundred and sixty hours over four weeks. Id. UIHC enacted these policies on November 1, 2020.
Gunasekaran used the talk to provide a myriad of reasons behind the changes. [ECF No. 66-3 at 26–30]. Two are relevant for the Motion. First, he stated the "timeline and requirements of pending litigation" was a reason for the changes. Id. at 28. Second, he said the new policy was enacted to "align[ ] with Iowa Code." Id. He explained the new policy would promote compliance with the requirement of "regular paydays within twelve days after the end of the pay period." Id.
The Amended Complaint contains three claims, all of which challenge the pay systems in place before November 1, 2020. [ECF No. 66]. Count I, brought under the IWPCL, alleges Defendant failed to provide earned wage adjustments in a timely manner. [ECF No. 46 ¶ 27]. On May 17, 2021, the Court certified Count I under Federal Rule of Civil Procedure 23 as the "Wages Class." [ECF No. 62]. The "Wages Class" is defined as:
All individuals who have worked for UIHC since August 19, 2017 as members of the SEIU bargaining unit ("health care professional bargaining unit") or October 7, 2017 as a ‘Merit, Merit Exempt, and Non-Exempt P&S’ employee ("blue collar workers"), respectively, who have not received their earned wages until more than twelve days, excluding Sundays and legal holidays, after the end of the period in which the wages were earned.
Count II, also based on the IWPCL, maintains Defendant did not disburse vacation or qualifying sick leave on the next regular payday after an employee's termination of employment, contrary to statute. [ECF No. 46 ¶ 34]. On May 17, 2021, the Court certified Count II as the "Termination Class." [ECF No. 62]. The "Termination Class" is defined as follows:
All individual members of the SEIU bargaining unit ("health care professional bargaining unit") or "Merit, Merit Exempt, and Non-Exempt P&S" employees ("blue collar workers") who have worked for UIHC since October 7, 2017 and have since terminated their employment who have not been paid accrued vacation pay, or unused accumulated sick leave not to exceed $2,000 where the employee retired at age 55 or older, by the next regular payday after their employment was terminated.
Count III asserts Defendant failed to disburse overtime premium pay in the next regular paycheck as required by federal law. [ECF No. 46 ¶ 42]. On May 5, 2020, the Court conditionally certified Count III as the "Overtime Pay Class." [ECF No. 31]. The "Overtime Pay Class" is defined as "[a]ll individuals who worked for the University of Iowa Hospitals and Clinics from January 8, 2017, to the present and were classified as merit, merit-exempt, or non-exempt P&S for purposes of overtime pay." Id. at 23. The Court's denial of qualified immunity, which is made as part of its decision on class certification, is on appeal to the United States Court of Appeals for the Eighth Circuit. [ECF Nos. 34; 44].
On August 26, 2021, Plaintiffs filed a Motion for Partial Summary Judgment. [ECF No. 66]. In their Motion, Plaintiffs ask the Court to grant summary judgment on Counts I and II of their Amended Complaint and find Defendant liable for liquidated damages for both. Id. Defendant filed its resistance on October 7, 2021. [ECF Nos. 69–69-3]. Plaintiffs filed a reply and supplemental appendix. [ECF Nos. 72–72-3]. For the reasons below, Plaintiffs’ Motion for Partial Summary Judgment, [ECF No. 66], is GRANTED with respect to Count I and DENIED with respect to Count II.
Summary judgment is proper when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Paulino v. Chartis Claims, Inc. , 774 F.3d 1161, 1163 (8th Cir. 2014). "A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party; a fact is material if its resolution affects the outcome of the case." Amini v. City of Minneapolis , 643 F.3d 1068, 1074 (8th Cir. 2011) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). "If the moving party has met this burden ... the non-moving party must set forth specific facts showing that there are genuine issues for trial." Bankston v. Chertoff , 460 F. Supp. 2d 1074, 1085 (D.N.D. 2006). To preclude the entry of summary judgment, the nonmovant must make a sufficient showing on every essential element of its case for which it has the burden of proof at trial. Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "The evidence is viewed ‘in the light most favorable to the nonmoving party’ and all reasonable inferences that can be drawn from the record are construed in that party's favor." Pedersen v. Bio-Med. Applications of Minn. , 775 F.3d 1049, 1053 (8th Cir. 2015) (quoting Johnson v. Wells Fargo Bank, N.A. , 744 F.3d 539, 541 (8th Cir. 2014) ).
A statute that "regulates conduct for the public good or welfare is ordinarily remedial and liberally interpreted." First Iowa State Bank v. Iowa Dep't of Nat. Res. , 502 N.W.2d 164, 166 (Iowa 1993). The IWPCL is one such statute. Hornby v. State , 559 N.W.2d 23, 26 (Iowa 1997). The primary consideration when applying these statutes, notably the IWPCL, is furthering the "public interest underlying th[e] remedial statute." Gabelmann v. NFO, Inc. , 606 N.W.2d 339, 344 (Iowa 2000).
The IWPCL is meant to "facilitate collection of wages owed to employees." Condon Auto Sales & Serv., Inc. v. Crick , 604 N.W.2d 587, 596 (Iowa 1999) (citing Phipps v. IASD Health Servs. Corp. , 558 N.W.2d 198, 201 (Iowa 1997) ). Wages are "compensation owed by an employer for ... [l]abor or services rendered by an employee, whether determined on a time, task, piece, commission, or other basis of calculation." Andrew v....
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