Walsh v. TriMED Healthcare, LLC

Decision Date08 August 2022
Docket NumberCivil Action 20-4308
PartiesMARTIN J. WALSH, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR v. TRIMED HEALTHCARE, LLC, BEVERLY JORDAN
CourtU.S. District Court — Eastern District of Pennsylvania

MARTIN J. WALSH, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR
v.
TRIMED HEALTHCARE, LLC, BEVERLY JORDAN

Civil Action No. 20-4308

United States District Court, E.D. Pennsylvania

August 8, 2022


MEMORANDUM

KEARNEY, J.

The United States Secretary of Labor sued an in-home healthcare services company for failing to appropriately calculate and pay overtime for workers caring for patients in the patients' homes. The employer adjusted the calculated hours to allegedly avoid paying time-and-a-half consistent with Congress's mandate in the Fair Labor Standards Act. The employer and its owner concede their error but blame their conduct on reliance on the advice of counsel and after contacting Pennsylvania's Office of Long-Term Living. The employer's owner is a certified public accountant and would seem to know better. But we cannot make this decision as a matter of law at this stage. Our jury must decide whether the employer and its owner appreciated the legality of their pay structure or showed reckless disregard about its illegality. We grant the Secretary of Labor's Motion for summary judgment as to the uncontested claims, but the jury must decide the willfulness of the employer, the Secretary's entitlement to liquidated damages, and the correctness of the Secretary's $1,934,769.70 back wages demand; and we must then decide the appropriateness and scope of the requested injunctive relief.

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I. Undisputed Facts

TriMED Healthcare, LLC provides in-home healthcare services.[1] Certified public accountant Beverly Jordan owns and manages TriMED.[2] Ms. Jordan “set[s] pay rates, promulgat[es] work rules and assignments, and maintain[s] employee compensation and timekeeping records.”[3]

TriMED employs “direct care workers” who care for patients in patients' homes.[4] Congress once exempted homecare workers like TriMED's from the requirements of the Fair Labor Standards Act, through which Congress requires employers to pay employees time-and-a-half their regular rates for weekly hours worked in excess of forty.[5] Because of the exemption, TriMED used to pay direct care workers a flat hourly rate regardless of how many hours they worked weekly.[6]Ms. Jordan discovered Congress stopped exempting home care workers from the Act in November 2015.[7] TriMED and Ms. Jordan understood they needed to pay employees time-and-a-half their regular rates for overtime due to the non-exemption.[8]

TriMED implemented a new pay structure in 2015.[9] TriMED continued paying employees their regular rates when they did not work more than forty hours per week.[10] But when employees worked more than forty hours in a workweek, TriMED lowered the employee's regular rate for that workweek, then paid the employee time-and-a-half of the lowered rate for the hours worked over forty.[11] This resulted in the employee making the same gross hourly rate every week irrespective of whether they worked overtime.

2

As applied to an employee working a 48.5-hour workweek, the pay structure operated as:

Old Calculation

Hours

Old rate

Gross Pay

48.50 0

$10.00

$485.0

New Calculation

Hours

New rate

Gross Pay

40

$9.19

$367.77

8.5

$13.79

$117.23

$485.00

Secretary of the Department of Labor Martin J. Walsh sues TriMED for violating the Act.[12]Secretary Walsh seeks backpay and liquidated damages for TriMED's employees and an injunction prohibiting TriMED from violating the Act again.

II. Analysis

Secretary Walsh moves for summary judgment.[13] Secretary Walsh seeks summary judgment on eight issues: (1) the Act covers TriMED's employees, (2) Ms. Jordan is an “employer” under the Act, (3) TriMED and Ms. Jordan violated the Act by failing to pay its employees time-and-a-half their regular rate for overtime hours and failing to pay employees for compensable travel time; (4) TriMED and Ms. Jordan violated 29 U.S.C. § 211(c) by failing to maintain and preserve accurate employee records; (5) TriMED and Ms. Jordan willfully violated the Act; (6) TriMED and Ms. Jordan owe $1,934,769.70 in back wages; (7) TriMED and Ms. Jordan owe the same amount in liquidated damages; and (8) we should enjoin TriMED and Ms. Jordan from violating the Act again.[14] TriMED and Ms. Jordan concede the first three issues.[15]They are silent on the fourth issue. They contest the remaining four issues.[16]

We grant partial summary judgment to Secretary Walsh on his claims the Act covers TriMED's employees, Ms. Jordan is an “employer” under the Act, TriMED and Ms. Jordan violated the Act by failing to pay overtime and compensable travel time, and TriMED and Ms.

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Jordan failed to maintain and preserve accurate employee records. We deny summary judgment on the remaining issues because genuine disputes of material fact require trial.

A. We grant partial summary judgment to Secretary Walsh on his claims the Act covers TriMED's employees, Ms. Jordan is an “employer” under the Act, TriMED and Ms. Jordan violated the Act by failing to pay overtime and compensable travel time, and TriMED and Ms. Jordan failed to maintain and preserve accurate employee records.

Congress in the Act requires employers pay employees “at a rate not less than one and one-half times the regular rate at which he is employed” for hours worked in excess of forty in a workweek.[17] An “employer” is “any person acting directly or indirectly in the interest of an employer in relation to an employee.”[18] An “employee” is “any individual employed by an employer.”[19]

TriMED and Ms. Jordan concede the Act covers its employees, Ms. Jordan is an “employer” under the act, and they failed to pay employees for overtime and compensable travel time. TriMED and Ms. Jordan's concession requires we grant summary judgment to Secretary Walsh on these issues.[20]

Secretary Walsh's claim TriMED and Ms. Jordan failed to maintain and preserve accurate employee records under section 211(c) requires more analysis. While TriMED and Ms. Jordan affirmatively concede other issues, they merely do not respond to Secretary Walsh's section 211(c) claim. Secretary Walsh argues TriMED and Ms. Jordan's non-response alone warrants summary judgment.[21] Not so. When a party “fails to properly address another party's assertion of fact,” we may grant summary judgment “if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it.”[22] In other words, we cannot grant summary judgment based simply on a nonmovant's failure to contest an issue.[23] We may grant summary judgment only after determining “the facts specified in or in connection with the motion entitle the moving party to judgment as a matter of law.”[24]

The statute of limitations for claims under the Act is two years, but a plaintiff may seek a third year of damages if it proves the employer “willful[ly]” violated the Act.[30] An employer

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We nonetheless grant partial summary judgment to Secretary Walsh on his claim TriMED and Ms. Jordan violated section 211(c). Congress in section 211(c) requires an employer to “make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records” for at least...

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