Walsh v. Saline Cnty. Ambulance Serv., Inc.

• Decision Date: 27 June 2022
• Docket Number: 3:20-CV-01284-NJR
• Parties: MARTIN J. WALSH, Secretary of Labor, United States Department of Labor,Plaintiff, v. SALINE COUNTY AMBULANCE SERVICE, INC., WILLIAMSON COUNTY AMBULANCE SERVICE, INC., and RICK L. COLYER, Defendants.
• Court: U.S. District Court — Southern District of Illinois

MARTIN J. WALSH, Secretary of Labor, United States Department of Labor,Plaintiff, v. SALINE COUNTY AMBULANCE SERVICE, INC., WILLIAMSON COUNTY AMBULANCE SERVICE, INC., and RICK L. COLYER, Defendants.

No. 3:20-CV-01284-NJR

United States District Court, S.D. Illinois

June 27, 2022

MEMORANDUM AND ORDER

NANCY J. ROSENSTENGEL CHIEF U.S. DISTRICT JUDGE

This matter is before the Court on a Motion for Summary Judgment filed by Plaintiff Martin J. Walsh, Secretary of Labor for the United States Department of Labor (“DOL”). (Doc. 30). Defendants filed a response in opposition (Doc 42), and DOL filed a timely reply. (Doc. 46). For the reasons set forth below, the motion is granted in part and denied in part.

Facts

Saline County Ambulance Service, Inc. (“SCAS”)^[1] and Williamson County Ambulance Service Inc. (“WCAS”) provided ambulance services to Saline and Williamson Counties in southern Illinois. (Doc 31, p. 1). From December 1, 2017, to December 30, 2020, SCAS and WCAS engaged in commerce and had a combined annual gross volume of business exceeding $500,000. (Doc. 23). Both SCAS and WCAS operated 24 hours a day, seven days a week. (Doc. 32-1, pp. 26-29).

SCAS and WCAS employed dispatchers, EMTs, and paramedics. (Docs 32-10; 3211). Dispatchers, EMTs, and paramedics typically worked 24-hour shifts. (Doc. 32-1, pp. 37, 39; Doc. 34-21, p. 3; Doc. 34-22, p. 2; Doc. 43, p. 9). Employees of SCAS and WCAS were paid a salary or a shift rate per pay period. (Doc. 32-1, pp. 17-22; Doc. 44-2, p. 41; Docs. 33-1-33-13; Docs. 34-1-34-11).

The sole owner and president of SCAS and WCAS, Rick Colyer (“Colyer”), set schedules and pay rates and did payroll. (Doc. 32-1, pp. 10-12, 23-24, 31). Colyer “figured” an employee's hourly rate of pay based on the employee's salary or shift rate. (Doc. 32-1, pp. 17-22). Colyer did not keep a list of employees' hourly rates; instead, he recorded the rates on timesheets after he “figured it.” (Doc. 32-3, p. 33). For instance, “[i]f someone was required to make say $600 per week and they worked a certain amount of hours, [Colyer] would divide those hours into that number to get an hourly rate.” (Doc. 44-2, p. 41). The Late 1990s Investigation

In the late 1990s, DOL's Wage and Hour Division (“WHD”) investigated SCAS and WCAS's pay practices. (Doc. 32-3, p. 16; Doc. 34-14, p. 9; Doc. 44-2, pp. 47-52). According to Colyer, he was told to pay a minimum of 13 hours per shift, but to add to the time per shift for sleep time interruptions. (Doc. 32-3, p. 19; Doc. 44-2, p. 49-52). This investigation resulted in a consent judgment. (Doc. 34-16). SCAS and WCAS agreed to pay $20,000 in minimum wage and overtime compensation due to employees for the period of March 1, 1996, to November 26, 1999. (Id. at p. 4). Defendants were also enjoined from violating the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act (“FLSA”). (Id. at p. 3). After the consent agreement, Colyer requested further information on how employees should record time, and WHD Investigator Jim Yochim (“Yochim”) provided a letter to Colyer at his request. (Doc. 44-2, pp. 51-52; Doc. 34-17).

The Current Investigation

In January 2019, WHD again investigated WCAS and SCAS's pay practices. (Doc. 34-14). Investigator Matthew Carlen had a conference with Colyer, gathered and reviewed documents and records, and interviewed employees. (Id.). The investigation uncovered Defendants' failure to record accurate start and stop times-and sleep time interruptions. (Id.). Investigator Carlen determined that Defendants' payment practices resulted in minimum wage and overtime violations. (Id.).

As a result, DOL filed this action on December 1, 2020 (Doc. 1) and is proceeding on three claims: violation of Section 6 of the FLSA - Paying Employees Less than $7.25 per hour; violation of Section 7 of the FLSA - Failing to Properly Compensate Employees for Overtime; and violation of Section 11(c) of the FLSA - Recordkeeping Violations. DOL also seeks an order permanently enjoining and restraining Defendants from prospectively violating the FLSA. (Doc. 1, p. 5). The Court has federal question subject matter jurisdiction over the FLSA claims.

Legal Standard

Summary judgment is only appropriate if 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.” Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014) (quoting FED. R. CIV. P. 56(a)). Once the moving party sets forth the basis for summary judgment, the burden then shifts to the nonmoving party who must go beyond mere allegations and offer specific facts showing that there is a genuine issue of fact for trial. FED. R. CIV. P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 232-24 (1986). The nonmoving party must offer more than “[c]onclusory allegations, unsupported by specific facts,” to establish a genuine issue of material fact. Payne v. Pauley, 337 F.3d 767, 773 (7th Cir. 2003) (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).

In determining whether a genuine issue of fact exists, the Court must view the evidence and draw all reasonable inferences in favor of the party opposing the motion. Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001). However, “[i]nferences that rely upon speculation or conjecture are insufficient.” Armato v. Grounds, 766 F.3d 713, 719 (7th Cir. 2014). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.” Id. (citation omitted).

Discussion

I. Single Enterprise and Joint and Several Liability

For the FLSA's minimum wage, overtime, and recordkeeping provisions to apply to Defendants, the organization must be an “enterprise engaged in commerce or in the production of goods for commerce.” 29 U.S.C. §§ 203(r), (s)(1)(A). Separate entities are a single enterprise when they are (1) engaged in related activities; (2) performed through unified operation or common control; and (3) for a common business purpose. 29 U.S.C. § 203(r)(1). Defendants admit that SCAS and WCAS constitute a single enterprise within the meaning of the statute. (Doc. 23, p. 3).

Under 29 U.S.C. § 203(d), individual liability exists for “any person acting directly or indirectly in the interest of an employer in relation to an employee[.]” See also Riordan v. Kempiners, 831 F.2d 690, 694 (7th Cir. 1987) (acknowledging that “[t]he word ‘employer' is defined broadly enough in the Fair Labor Standards Act . . . to permit naming another employee rather than the employer as defendant, provided the defendant had supervisory authority over the complaining employee and was responsible in whole or part for the alleged violation”). Defendants admit that Colyer is an “employer” under the FLSA. (Doc. 23). Accordingly, Colyer is individually liable and jointly and severally liable with SCAS and WCAS. See Poff v. Quick Pick, LLC, 2017 WL 4284749, at *2 (S.D. Ind. Sept. 27, 2017) (noting that “[i]t has been consistently recognized by the district courts of this circuit that a corporate officer with operational control over an employee is considered an employer together with the corporation, jointly and severally liable for unpaid wages under the FLSA”); see, e.g., Natal v. Medistar, Inc., 221 F.Supp.3d 999, 1003 (N.D. Ill. 2016); Arteaga v. Lynch, 2013 WL 5408580, at *12 (N.D. Ill. Sept. 26, 2013) (“[c]ourts evaluating FLSA claims have imposed liability on individuals in a range of corporate positions, including general managers, provided such individuals acted on behalf of the corporation to cause the violations”); Kelley v. Stevens Auto Sales, 2009 WL 2762765, at *3 (N.D. Ind. Aug. 27, 2009) (“[w]hile the Court has not located a Seventh Circuit Court of Appeals case directly on point, the district courts of this circuit have consistently recognized that a corporate officer with operational control over an employee is an employer along with the corporation, jointly and severally liable under the FLSA for unpaid wages”).

II. Defendants' Recordkeeping

The FLSA requires employers to make, keep, and preserve records of employees' wages, hours and other conditions and practices of employment. 29 U.S.C. § 211(c). Every employer must maintain and preserve payroll or other records containing each employees' daily hours, weekly hours, regular rates of pay, total daily or weekly straight time earnings, and total overtime earnings per workweek. 29 C.F.R. § 516.2(a)(1)-(12). “The FLSA makes clear that employers, not employees, bear the ultimate responsibility for ensuring that employee time sheets are an accurate record of all hours worked by employees.” Skelton v. Am. Intercontinental Univ. Online, 382 F.Supp.2d 1068, 1071 (N.D. Ill. 2005); see also Walton v. United Consumers Club, Inc., 786 F.2d 303, 314 (7th Cir. 1986) (noting that “[s]ection 11(c) of the FLSA, 29 U.S.C. § 211(c), requires every employer to keep an accurate record of the hours worked by each employee”).

DOL asserts that “Defendants grossly failed to maintain records required by law.” (Doc. 31, p. 9). According to the DOL, “Defendants' pay records prior to 2021 did not include the regular rate of pay, straight time earnings, or overtime earnings.” (Id.). Defendants do not dispute the evidence regarding their poor recordkeeping. Indeed, Defendants admit that sleep time interruptions were not recorded. (Doc. 32-1, p. 54).^[2]Numerous timesheets do not even exist for seventeen WCAS employees and ten SCAS employees. (Docs. 34-12; 34-13).

The lack of recordkeeping here is significant because “[a]n employee who brings suit pursuant to FLSA ‘has the burden of proving that he performed work for which he was not properly...