Parth v. Pomona Valley Hosp. Med. Ctr.

• Decision Date: 13 December 2010
• Docket Number: No. 08–55022.,08–55022.
• Citation: 630 F.3d 794
• Parties: Louise PARTH, individually and on behalf of all others similarly situated, Plaintiff–Appellant,v.POMONA VALLEY HOSPITAL MEDICAL CENTER, a California corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

630 F.3d 794

10 Cal. Daily Op. Serv. 15,378

2010 Daily Journal D.A.R. 18,614

Louise PARTH, individually and on behalf of all others similarly situated, Plaintiff–Appellant,

v.POMONA VALLEY HOSPITAL MEDICAL CENTER, a California corporation, Defendant–Appellee.

No. 08–55022.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 13, 2009.Filed Nov. 18, 2010.Amended Dec. 13, 2010.

Frank J. Coughlin, Santa Ana, CA, for the plaintiff-appellant.Richard J. Simmons, Douglas R. Hart, Jason W. Kearnaghan and Beth Anne Scheel, Sheppard, Mullin, Richter and Hampton LLP, Los Angeles, CA, for the defendant-appellee.M. Patricia Smith, Solicitor of Labor; William C. Lesser, Acting Associate Solicitor; Paul L. Frieden, Counsel for Appellate Litigation; and Dean A. Romhilt, Attorney, United States Department of Labor, for the Secretary of Labor as amicus curiae.Appeal from the United States District Court for the Central District of California, Margaret M. Morrow, District Judge, Presiding. D.C. No. CV–06–04703–MMM.Before: WILLIAM C. CANBY, JR., JOHNNIE B. RAWLINSON, and N. RANDY SMITH, Circuit Judges.

ORDER

The Opinion filed November 18, 2010, slip op. 18571 , and appearing at 18586, is amended as follows:

1. At slip op. 18586 n. 3 :

Delete between and

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Add after panel rehearing nor>

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n.3 should now read:

The Department's amicus brief (which was submitted at our request in connection with a petition for rehearing) concluded:

The Hospital's reduction of the nurses' regular hourly wage rates does not appear to be designed to circumvent the Act's overtime requirements and appears to meet three factors identified by the Department for ensuring that reduced rates are bona fide. Furthermore, the panel's decision does not conflict with a decision of the Supreme Court or a decision of this Court. Therefore, neither panel rehearing nor rehearing en banc is warranted.

OPINION

N.R. SMITH, Circuit Judge:

When an employer changes its shift schedule to accommodate its employees' scheduling desires, the employer may reduce the employee pay rate to pay its employees the same wages they received under the former schedule, so long as the rate reduction was not designed to circumvent the provisions (including overtime) of the Fair Labor Standards Act (“FLSA”).

I. BACKGROUND

Pomona Valley Hospital Medical Center (“PVHMC”) is a hospital located in Pomona, California that has at all relevant times been an “employer” subject to the FLSA. The FLSA requires an employer (such as PVHMC) to pay its employees at one-and-one-half times the employees' “regular rate” for any “employment in excess of eight hours in any workday and in excess of eighty hours in [a] fourteen-day period.” 29 U.S.C. § 207(j).¹

Prior to 1989 or 1990, PVHMC scheduled its nurses to work almost exclusively in 8–hour shifts. However, many PVHMC nurses preferred working 12–hour shifts in order to have more days away from the hospital. The nurses, therefore, requested 12–hour shift schedules. In response to these requests, PVHMC developed and implemented an optional 12–hour shift schedule and pay plan in 1989–90. The pay plan provided nurses the option of working a 12–hour shift schedule in exchange for receiving a lower base hourly salary (that at all times exceeded the minimum wage set forth by the FLSA) and time-and-a-half pay for hours worked in excess of eight per day. The plan prohibited PVHMC from requiring nurses to work additional shifts, absent a medical emergency. If nurses voluntarily work longer than the 12–hour shift, they are paid double the regular rate. The result: nurses, who volunteered for the 12–hour shift schedule, would make approximately the same amount of money as they made on the 8–hour shift schedule (while working the same number of hours over a 14–day period and performing the same duties). After PVHMC made the 12–hour shift schedule available, many PVHMC nurses (though not all) opted to work 12–hour shifts.

In 1993, Louise Parth worked as a nurse in PVHMC's emergency room (“ER”). The nurses in PVHMC's ER (including Parth) voted to implement 12–hour shifts. Parth favored the 12–hour shift format, because it provided her more flexibility in her personal schedule, enabling her to (1) care for her mother, (2) pursue a second nursing job at other facilities, and (3) pick up additional shifts at PVHMC. After voting to implement 12–hour shifts in the ER, Parth subsequently entered into a voluntary agreement with PVHMC that reduced her base hourly wage rate from $22.83 to $19.57 in exchange for the 12–hour shift schedule. Parth has worked the 12–hour shift schedule without interruption since 1993.

In 2003, the PVHMC nurses voted to unionize. Accordingly, PVHMC and the nurses' certified bargaining representative, Service Employees International Union, Local 121 (“Local 121”), negotiated a collective bargaining agreement (“CBA”) over a nine-month period. Parth was a member of Local 121's Bargaining Committee and therefore attended most of the negotiation sessions. The resulting agreement provided that PVHMC would increase all nurse salaries—for 8–hour shift employees and 12–hour shift employees alike—by 10% during the CBA's first year, followed by a 5% across-the-board increase for the second and third years. The CBA also reaffirmed PVHMC's practice of paying nurses working the 12–hour shift schedule a lower base hourly rate than nurses working 8–hour shifts.

The CBA set the base hourly rate for Parth's position at $34.644 (the “base rate”). When Parth works a weekday night, her hourly rate is $39.84 (the “weeknight base rate”). When she works a weekend night, her hourly rate is $46.929 (the “weekend night base rate”). Anytime Parth works more than 8 hours in a shift or 80 hours in a 14–day work period, she receives 1.5 times her “regular rate” of pay for those hours. If Parth works beyond 12 hours in a shift, she is paid “double-time”—double the “regular rate” of pay. If she works an additional shift beyond her regular schedule, she is paid at the higher rate applicable to eight-hour shift employees. PVHMC calculates the “regular rate” of pay by multiplying the total number of hours Parth works at each of the corresponding base rates (base rate + weeknight base rate + weekend night base rate), adding those numbers together, then dividing the total base rate pay by the total number of base rate hours worked. The “regular rate” of pay is therefore something more than the weeknight base rate of pay and will vary according to the number of hours worked at the various base rates. This method is known as the “weighted average method” of determining the “regular rate.” Gorman v. Consol. Edison Corp., 488 F.3d 586, 596 (2d Cir.2007). After PVHMC calculates the “regular rate” of pay, it multiplies that number by 1.5 to arrive at the overtime rate.

In 2004, all Local 121 members employed at PVHMC (and in good standing with the union) voted on the proposed CBA after being advised of its contents and being provided the opportunity to review its provisions. After Local 121 ratified the CBA, Local 121 representatives and PVHMC executed the agreement. Parth was a signatory to the agreement. She also testified during her deposition that she was aware the CBA continued PVHMC's pay rate practices. Parth continued to work the 12–hour shift schedule at PVHMC.

Just two years later, Parth filed a putative class action Complaint against PVHMC. She alleged that PVHMC's use of different base hourly rates violates the FLSA in that it denies unionized employees overtime pay, to which they are statutorily entitled. The district court found that Parth met the requirements for conditional class certification to bring the FLSA claim. PVHMC then filed a motion for summary judgment, asserting that its pay practices comply with the FLSA. The district court found that Parth did not adduce evidence or law sufficient to support her claims and therefore granted PVHMC summary judgment. We affirm.

II. STANDARD OF REVIEW

We review de novo the district court's order granting summary judgment. See, e.g., Universal Health Servs., Inc. v. Thompson, 363 F.3d 1013, 1019 (9th Cir.2004). On review, we must determine, viewing the evidence in the light most favorable to Parth, “whether there are any genuine issues of material fact and whether the district court correctly applied the [relevant] substantive law.” Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir.2004). “[T]he plain language of Rule 56(c) mandates the entry of summary judgment ... against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

III. DISCUSSION

Parth argues that PVHMC violated the FLSA by creating a pay plan that pays nurses working 12–hour shifts a lower base hourly rate than nurses who work 8–hour shifts. In support of her argument, Parth contends that: (A) PVHMC cannot reduce the base pay for nurses working the 12–hour shift, (B) the 12–hour base pay rate is an “artifice” designed to avoid the FLSA's overtime and maximum hours requirements, and (C) PVHMC cannot justify the base hourly pay rate differences between the 8–hour and 12–hour shifts, because nurses working both shifts perform the same job duties.

A.

Parth first asserts that PVHMC cannot reduce the base pay for nurses working the 12–hour shift, because such reduction violates the FLSA. The FLSA requires hospitals on the 8/80 plan to pay employees, who work more than 8 hours in a day or 80 hours in a two-week period, one and a half times the employees' “regular rate” of pay. 29 U.S.C. § 207(j). The Supreme Court interprets “regular rate” to mean “the hourly rate actually paid the employee for the normal, non-overtime workweek for which he is...