Woodlands Senior Living, LLC v. Mas Med. Staffing Corp.
| Decision Date | 23 November 2020 |
| Docket Number | 1:19-cv-00230-JDL |
| Citation | 502 F.Supp.3d 564 |
| Parties | WOODLANDS SENIOR LIVING, LLC, et al., Plaintiffs, v. MAS MEDICAL STAFFING CORP., Defendant. |
| Court | U.S. District Court — District of Maine |
Kurt C. Peterson, Matthew D. Morgan, McKee Law LLC PA, Augusta, ME, for Plaintiffs.
Tawny L. Alvarez, Elizabeth Tull Johnston, Verrill Dana LLP, Portland, ME, for Defendants.
ORDER ON MOTION FOR JUDGMENT ON THE PLEADINGS
Plaintiff Woodlands Senior Living, LLC ("Woodlands") filed a complaint against Defendant MAS Medical Staffing Corporation ("MAS") alleging that MAS actively recruited and solicited Woodlands employees in violation of a contract between the two parties (ECF Nos. 3-2, 37). MAS has moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing that even if it did breach the contract, Woodlands' claims must fail because of a recently enacted Maine law—"An Act to Promote Keeping Workers in Maine," P.L. 2019, ch. 513 (codified at 26 M.R.S.A. §§ 599-A, 599-B (West 2020) )—which prohibits the enforcement of restrictive employment agreements (ECF No. 15). For the following reasons, I grant MAS's motion.
Woodlands initially filed its Complaint in the Kennebec County Superior Court on April 3, 2019, and on May 22, the case was removed to federal court. On July 21, 2020, Woodlands filed a First Amended Complaint, which added several additional Woodlands facilities as plaintiffs, but which is otherwise identical to the original complaint.1 The First Amended Complaint contains one breach of contract count and one quantum meruit count. The First Amended Complaint alleges the following facts, which I supplement by reference to the contract that is the subject of this case and which is attached to MAS's motion. See R.G. Fin. Corp. v. Vergara-Nuñez , 446 F.3d 178, 182 (1st Cir. 2006) ().
Woodlands operates several nursing facilities throughout Maine. MAS is a New Hampshire corporation which operates as a licensed temporary nursing agency in Maine. In May of 2016, the parties entered into a contract (the "Staffing Agreement"), in which MAS agreed to refer licensed healthcare professionals for temporary placement at various Woodlands facilities.
The Staffing Agreement included a "Direct Hire" provision governing each party's ability to directly hire employees from the other:
Direct Hire: In the event [Woodlands] desires to hire a temporary, per diem or contract Healthcare Professional referred by [MAS], [Woodlands] is obligated to pay a placement fee as follows[:] $5000.00 if hired within 6 months of initial shift with [Woodlands] and $2500.00 after 6 months of initial shift with [Woodlands] or agree to a 12 week[,] 40 hour per week contract for said employee. [MAS] further agrees not to actively recruit or solicit any current employee of any Woodlands location and should any current or recently past employee apply for a position with [MAS] they will be required to wait 90 days after their last day of employment to be hired by [MAS].
ECF No. 15-1 ¶ 1(d). Woodlands alleges that MAS violated the Direct Hire provision when it recruited and hired several Woodlands employees without complying with the ninety-day waiting period.
On January 22, 2020, MAS moved for judgment on the pleadings based on Maine's recently enacted law prohibiting the enforcement of restrictive employment agreements, 26 M.R.S.A. § 599-B.2 In response, Woodlands argues that the law is inapplicable or, alternatively, that the law violates the Contract Clause of the Maine Constitution, Me. Const. art. I, § 11. Because Woodlands challenged the constitutionality of a Maine statute, I ordered Woodlands to comply with Fed. R. Civ. P. 5.1 and D. Me. Local R. 5.1 by filing a notice of the challenge with the Maine Attorney General's Office (the "Attorney General"). Woodlands complied, and the Attorney General subsequently filed a motion to intervene, which was granted. The Attorney General then filed a brief defending the constitutionality of section 599-B. A hearing on all pending issues was held on October 15, 2020.
"After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). "A motion for judgment on the pleadings bears a strong family resemblance to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), and these two types of motions are treated in much the same way." Kando v. R.I. State Bd. of Elections , 880 F.3d 53, 58 (1st Cir. 2018) (citing Aponte-Torres v. Univ. of P.R. , 445 F.3d 50, 54 (1st Cir. 2006) ).
Accordingly, "[i]n deciding whether to grant judgment for the moving party, the Court must ‘accept all of the nonmoving party's well-pleaded factual averments as true and draw all reasonable inferences in [his] favor.’ " Shapiro v. Haenn , 190 F. Supp. 2d 64, 66 (D. Me. 2002) (quoting Feliciano v. Rhode Island , 160 F.3d 780, 788 (1st Cir. 1998) ). "Judgment on the pleadings is not appropriate ‘unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.’ " Id. (quoting Rivera-Gomez v. de Castro , 843 F.2d 631, 635 (1st Cir. 1988) ).
On September 19, 2019, roughly five months after Woodlands filed its complaint, 26 M.R.S.A. § 599-B went into effect. The law provides that "[a]n employer may not: A. [e]nter into a restrictive employment agreement; or B. [e]nforce or threaten to enforce a restrictive employment agreement." § 599-B(2). The statute defines a "restrictive employment agreement" as an "agreement ... between [two] or more employers, including through a franchise agreement and subcontractor agreement," which "[p]rohibits or restricts one employer from soliciting or hiring another employer's employees or former employees." § 599-B(1).
MAS argues that section 599-B applies to the Staffing Agreement, maintaining that the Staffing Agreement meets the statutory definition of a restrictive employment agreement; that section 599-B should apply retroactively to encompass the entire action; and that even if the statute does not apply retroactively, maintenance of the present lawsuit constitutes an "enforcement" of the Staffing Agreement that is prohibited by section 599-B. Woodlands disputes each of these contentions, and it further argues that the statute violates the Maine Constitution. Woodlands also contends that even if the Staffing Agreement is unenforceable, its quantum meruit claim must survive. I address each argument in turn.
Woodlands asserts that section 599-B is inapplicable to the Staffing Agreement for two reasons. First, it contends that whether the Staffing Agreement is a "restrictive employment agreement" is a "factually intensive question that is not ripe to be decided at this stage of litigation." ECF No. 19 at 9. Second, it argues that section 599-B does not apply to the Staffing Agreement because MAS is not an "employer" as required by the statute.
Without elaborating in any significant detail, Woodlands claims that whether the Staffing Agreement is a "restrictive employment agreement" is a factually-intensive question and is thus not appropriate for the court to determine on a judgment on the pleadings. However, while fact-finding is indeed "the essence of the jury function," Estate of Spinosa v. Int'l Harvester Co. , 621 F.2d 1154, 1160 (1st Cir. 1980), whether the Staffing Agreement is a restrictive employment agreement is an issue of statutory interpretation, because at this stage the facts asserted in Woodlands' complaint are accepted as true, and the resulting question for decision is whether section 599-B applies to the facts alleged in Woodlands' complaint. "Questions of statutory interpretation are questions of law." Hernández–Miranda v. Empresas Díaz Massó, Inc. , 651 F.3d 167, 170 (1st Cir. 2011). Thus, this Court may determine whether the Staffing Agreement is a "restrictive employment agreement" at this stage of litigation.
Woodlands next contends that section 599-B does not apply to the Staffing Agreement because the statute prohibits "restrictive employment agreements," which it defines as agreements between "[two] or more employers. " § 599-B(1)(A) (emphasis added). Woodlands argues that MAS is not an "employer" as defined by the statute. The subchapter containing section 599-B provides that "[a]s used in this subchapter, unless the context otherwise indicates, ... ‘Employer’ means an individual, partnership, association, [or] corporation...." § 591(2).
MAS is a corporation incorporated in New Hampshire. However, seizing on the phrase "unless the context otherwise indicates," Woodlands argues that MAS is not an employer under the statute because, as a provider of temporary medical staffing, MAS's business model requires that it impose hiring restrictions on the entities with whom it places its employees. Furthermore, MAS's employees are placed with medical providers temporarily and "never truly work at any MAS facility or site." ECF No. 19 at 9. Woodlands argues further that, "given the expectations of all parties involved, including the employee-placements who are the true intended beneficiaries of section 599-B," MAS does not fall within the term "employers." Id.
Woodlands' argument is misplaced, however, because the phrase "unless the context otherwise indicates" refers to the context of the statutory text itself, not the real-world context. There is no indication in section 591 that this phrase is intended to serve as an invitation to disregard the meaning of statutory terms based on the factual context in which the statute is being applied. See Tanguay v. Seacoast Tractor Sales,...
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