Withrow v. Sedgwick Claims Mgmt. Serv., Inc.

• Decision Date: 25 January 2012
• Docket Number: Civil Action No. 2:10–cv–00993.
• Parties: Kim WITHROW, Plaintiff, v. SEDGWICK CLAIMS MANAGEMENT SERVICE, INC., Defendant.
• Court: U.S. District Court — Southern District of West Virginia

841 F.Supp.2d 972

Kim WITHROW, Plaintiff,

v.SEDGWICK CLAIMS MANAGEMENT SERVICE, INC., Defendant.

Civil Action No. 2:10–cv–00993.

United States District Court, S.D. West Virginia.

Jan. 25, 2012.

Cynthia M. Ranson, George B. Morrone, III, J. Michael Ranson, Ranson Law Offices, G. Patrick Jacobs, Charleston, WV, for Plaintiff.

David A. Prather, Jameson Dylan King, Kathryn W. Pascover, Ford & Harrison, Memphis, TN, C. David Morrison, Steptoe & Johnson, Bridgeport, WV, Joseph U. Leonoro, Steptoe & Johnson, Charleston, WV, for Defendant.

MEMORANDUM OPINION AND ORDER

JOSEPH R. GOODWIN, Chief Judge.

Pending before the court are the Motion by Sedgwick Claims Management Services, Inc., for Summary Judgment [Docket 148], the Plaintiffs' Motion for Summary Judgment [Docket 150], and the Plaintiffs' Motion for Conditional Certification and Court–Authorized Notice Pursuant to Section 216(b) of the FLSA [Docket 157]. For the reasons discussed below, the defendant's Motion for Summary Judgment is GRANTED, the plaintiffs' Motion for Summary Judgment is DENIED, and the Plaintiffs' Motion for Conditional Certification is DENIED as moot.

I. Introduction

The central issue in this suit is whether the defendant, Sedgwick Claims Management Services, Inc. (“Sedgwick”), violated the Fair Labor Standards Act (“FLSA”) by failing to pay the plaintiffs time and a half for hours worked in excess of forty per week. Sedgwick contends that the positions held by the plaintiffs Kim Withrow, Teresa Clark, Jacqueline S. Cunningham, Journey Webb, Angela Adkins, Connie Griffith, Patricia McCormick, and Priscilla White fell within the administrative exemption to the overtime requirement.¹29 U.S.C. § 213(a)(1). The plaintiffPaula Ball, according to Sedgwick, was a professional employee and was therefore exempt under 29 U.S.C. § 213(a)(1).

Sedgwick is a third-party administrator of workers' compensation and other insurance claims. At its Charleston, West Virginia office, it administers 17,000 workers' compensation claims funded by the State of West Virginia. These claims all arose prior to July 1, 2005, and are termed “old-fund” claims. ² The plaintiffs, with the exception of Paula Ball, were Claims Examiners II and Claims Examiners III. As Claims Examiners, they managed workers' compensation claims. Their duties included: (1) maintaining contact with the claimants; (2) processing requests for treatment and medication; (3) assisting in the settlement of claims; (4) setting and reevaluating the reserve for each claim; and (5) managing litigation. Each Claims Examiner II and Claims Examiner III is assigned to approximately 180 to 190 claims, and the Claims Examiners generally perform the same duties. However, Claims Examiners III are assigned to more complex cases than Claims Examiners II, and they are paid more. The plaintiff Paula Ball was employed by Sedgwick as a utilization review nurse and also assumed duties as a telephonic case manager.

After outlining the procedural history of this suit and the summary judgment standard, I examine the FLSA's framework for determining whether an employee is subject to the administrative exemption. Viewing the facts in the light most favorable to the plaintiffs, I FIND that there is no genuine issue of material fact and the defendant has proven by clear and convincing evidence that the Claims Examiners' duties fell within the administrative exemption. Then I apply the professional exemption's requirements to the duties of the plaintiff Paula Ball, and I FIND that there is no genuine issue of material fact and the defendant has proven by clear and convincing evidence that Ball's duties fell within the professional exemption. Finally, the plaintiffs' claim under the West Virginia Wage Payment and Collection Act fails as a matter of law. These holdings render the plaintiffs' Motion for Conditional Certification moot.

II. Procedural History

Kim Withrow filed suit in the Circuit Court of Kanawha County, West Virginia on July 9, 2010. She alleged that Sedgwick violated the West Virginia Wage Payment and Collection Act (“WVWPCA”). Withrow brought it as an individual action and sought to certify it as a class action under West Virginia Rule of Civil Procedure 23. The defendant removed the case on August 6, 2010. On October 28, 2010, Withrow filed an Amended Complaint, adding plaintiffs to the suit and maintaining her allegations under the WVWPCA. The plaintiffs filed a Second Amended Complaint on July 29, 2011. The Second Amended Complaint asserts that the defendant violated the FLSA and seeks to bring the suit as a collective action under 29 U.S.C. § 216(b). On August 16, 2011, the defendant and the plaintiffs filed motions for summary judgment. The defendant's motion applies to each plaintiff and all claims. The plaintiffs' motion does not apply to the plaintiff Paula Ball. On September 23, 2011, the plaintiffs filed a Motion for Conditional Certification and Court–Authorized Notice Pursuant to Section 216(b) of the FLSA. These motions are now ripe for review.

The plaintiffs' Second Amended Complaint contains three counts: (1) an individual claim for violation of the FLSA for failing to pay the plaintiffs overtime; (2) a collective action claim for violation of the FLSA on behalf of the plaintiffs and those similarly situated; and (3) a claim for violation of the WVWPCA, individually and as a class action.

III. Summary Judgment Standard

To obtain summary judgment, the moving party must show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). In considering a motion for summary judgment, the court will not “weigh the evidence and determine the truth of the matter.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Instead, the court will draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587–88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Although the court will view all underlying facts and inferences in the light most favorable to the nonmoving party, the nonmoving party nonetheless must offer some “concrete evidence from which a reasonable juror could return a verdict in his [or her] favor.” Anderson, 477 U.S. at 256, 106 S.Ct. 2505. Summary judgment is appropriate when the nonmoving party has the burden of proof on an essential element of his or her case and does not make, after adequate time for discovery, a showing sufficient to establish that element. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The nonmoving party must satisfy this burden of proof by offering more than a mere “scintilla of evidence” in support of his or her position. Anderson, 477 U.S. at 252, 106 S.Ct. 2505. Likewise, conclusory allegations or unsupported speculation, without more, are insufficient to preclude the granting of a summary judgment motion. See Felty v. Graves–Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987); Ross v. Comm'ns Satellite Corp., 759 F.2d 355, 365 (4th Cir.1985), abrogated on other grounds,490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989).

IV. The Fair Labor Standards Act and the Administrative Exemption

a. Statutory and regulatory framework

The Fair Labor Standards Act requires that employees who work more than forty hours a week receive overtime compensation “at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). Employees “employed in a bona fide executive, administrative, or professional capacity” are exempt from this overtime requirement. 29 U.S.C. § 213(a)(1). Determining whether an employee is exempt is a mixed question of law and fact. Harper v. Gov't Emps. Ins. Co., 754 F.Supp.2d 461, 463 (E.D.N.Y.2010). How an employee spends his time is a question of fact. Id. Whether an employee's duties render him subject to an exemption is a question of law. Robinson–Smith v. Gov't Emps. Ins. Co., 590 F.3d 886, 891 (D.C.Cir.2010). The employer bears the burden of proving by clear and convincing evidence that its employees fall within an exemption. Desmond v. PNGI Charles Town Gaming, L.L.C., 564 F.3d 688, 691 (4th Cir.2009).

The Secretary of Labor has adopted regulations that require an individual to meet three criteria to be considered an administrative employee. The employee must be:

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week ... exclusive of board, lodging or other facilities;

(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and

(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

29 C.F.R. § 541.200(a).

There is no dispute that the plaintiffs were compensated more than $455 per week. Therefore, my analysis focuses on the second and third prongs of the administrative exemption test. The regulations provide that to perform work “directly related to the management or general business operations,” “an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.” 29 C.F.R. § 541.201(a). This includes “work in functional areas such as ... insurance; ... safety and health; personnel management; human resources; [and] employee benefits.” 29 C.F.R. § 541.201(b). Moreover, an employee can qualify for the exemption if his or her primary duty is work directly related to the management or business operations of the employer's customers. 29 C.F.R. § 541.201(c). “Thus, for example, employees acting as advisers or consultants to their employer's...