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Clark v. Impact Home Care Services Inc.

United States District Court, M.D. North Carolina

March 30, 2018

DOROTHY CLARK, Individually and on behalf of all others similarly situated, Plaintiff,
LASHONDA S. WILLIAMSON d/b/a Impact Home Care Services, Defendant.


          THOMAS D. SCHROEDER, District Judge.

         This is a proposed collective action under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”). Before the court is Plaintiff Dorothy Clark's motion for conditional certification of an FLSA collective and approval of notice. (Doc. 16.) This motion has been briefed and is ripe for consideration. (Docs. 17, 31, 32.) For the reasons set forth below, the motion to conditionally certify the collective action will be granted, and the motion for approval of notice will be granted in part and denied in part.

         I. BACKGROUND

         On December 16, 2016, Clark brought this action on behalf of herself and others similarly situated, alleging that Defendant LaShonda S. Williamson d/b/a Impact Home Care Services (“Williamson”) misclassified home healthcare workers as independent contractors and seeking to recover unpaid overtime under the FLSA. (Doc. 1; Doc. 13.)[1] On March 7, 2017, Clark subsequently moved to conditionally certify this matter as a collective action under the FLSA and approve notice to potential class members. (Doc. 16.) Clark defines the class, or collective under the FLSA, to be certified as:

All current and former home healthcare workers (personal care aides, certified nursing assistants and in-home aides) who worked for LaShonda Swindell Williamson d/b/a Impact Home Care Services at any time since January 1, 2015 and who were classified as an independent contractor and who were not paid time and a half for all hours worked over 40 in a work week.

(Doc. 16-1 at 2.)

         Williamson operates an unincorporated business named Impact Home Care Services, which is a North Carolina-based home care agency that provides personal care services and assistance with home management tasks to elderly, ill, and disabled clients. (Doc. 26 ¶ 9; Doc. 16-2 at 2-3.) Williamson offers personal care assistance 24 hours a day, 7 days a week, with services provided by home healthcare workers under the direct supervision of a registered nurse. (Doc. 16-2 at 2; Doc. 16-3 at 2.) In order to meet the needs of her clients, Williamson provides at least some of these home healthcare services to her clients through a “network of independent contractors.” (Doc. 26 ¶ 75; see id. Ex. 1.) On April 7, 2015, Clark entered into an agreement to work as an independent contractor to provide in-home companionship and care for Williamson's clients. (Doc. 27 ¶ 7; Doc. 26, Ex. 1; Doc. 16-4 ¶¶ 4-6.)

         Clark claims that Williamson “attempted to circumvent the FLSA by misclassifying [her] home healthcare workers as independent contractors.” (Doc. 16-1 at 9.) In her declaration submitted in conjunction with this motion, Clark alleges that “all home healthcare workers were subject to this company-wide policy of classifying home healthcare workers as independent contractors and not paying them overtime wages.” (Doc. 16-4 ¶ 25.) Based on her discussions with other home healthcare workers, Clark claims that all home healthcare workers shared the same or similar job description, performed the same or similar duties, and were classified as independent contractors. (Id. ¶¶ 7-9, 25.) She further alleges that all such workers were required to fulfil the responsibilities outlined in plans of care prepared by the Defendant and lacked any independent discretion as to how their duties were performed. (Doc. 16-4 ¶¶ 10-14.) She claims that registered nurses monitored the completion of such care plans and that all supervisors were directly employed by the Defendant. (Doc. 16-1 at 5-6; see Doc. 16-3 at 2.) She asserts that all home healthcare employees were required to wear company badges and instructed to adhere to a dress code by their supervisors. (Doc. 16-4 ¶¶ 19-20; Doc. 16-11 at 2.)

         Clark alleges that she worked for Williamson as a home healthcare worker or certified nursing assistant from early 2015 until approximately October 2016. (Doc. 16-4 ¶¶ 2-3; Doc. 16-10 at 2.) She claims that she regularly worked over forty hours per week but was never paid overtime wages in excess of her $11.00 hourly rate. (Doc. 16-4 ¶¶ 18, 21-22; see Doc. 13 ¶¶ 37-38.) She has provided time sheets and pay stubs that indicate she worked in excess of ninety hours per week on some occasions without being paid overtime wages. (Doc. 16-5 (pay stubs indicating weekly compensation for work totaling 92.75 hours, 92.0 hours, 89.75 hours, and 89.25 hours at a rate equal to $11.00 per hour); Doc. 16-6 at 2; Doc. 16-7 at 2 (time sheet indicating a weekly total 91.5 hours).) Based on her discussions with other home healthcare workers, knowledge of their work schedules, and conversations with her supervisors, Clark contends that other home healthcare workers worked over forty hours per week since January 1, 2015, and were not paid overtime wages. (Doc. 16-4 ¶¶ 23-24; see Doc. 13 ¶ 37.)

         II. ANALYSIS

         A. Motion for Conditional Certification

         The FLSA requires covered employers to pay their employees overtime pay at one and one-half times the employee's normal hourly rate for hours worked in excess of forty during a work week. 29 U.S.C. § 207. However, the act contains various exemptions from its wage and hour requirements. See id. § 213. The “companionship services exemption” exempts “any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves . . . .” Id. § 213(a)(15).

         In October 2013, the U.S. Department of Labor amended its regulations to preclude third-party employers and agencies from claiming the companionship services exemption. See Application of the Fair Labor Standards Act to Domestic Service, 78 Fed. Reg. 60, 454 (Oct. 1, 2013). The amended regulations, which became effective on January 1, 2015, [2] extended the overtime payment provisions to home healthcare workers employed by third parties or agencies. 29 C.F.R. § 552.109(a); see Guerrero v. Moral Home Servs., Inc., 247 F.Supp.3d 1288, 1290 (S.D. Fla. 2017) (noting “[t]he amended regulations preclude third-party employers-like [defendant's home healthcare agency]-from claiming the companionship services exemption”).

         For any violation of the FLSA, an employee may bring a collective action on behalf of herself or “other employees similarly situated.” 29 U.S.C. § 216(b). To become part of the litigation, each “similarly situated” employee must file her written consent with the court. Id. Employees are “similarly situated” when they “raise a similar legal issue as to coverage, exemption, or nonpayment o[f] minimum wages or overtime arising from at least a manageably similar factual setting with respect to their job requirements and pay provisions.” Solais v. Vesuvio's II Pizza & Grill, Inc., 1:15CV227, 2016 WL 1057038, at *5 (M.D. N.C. Mar. 14, 2016) (quoting McLaurin v. Prestage Foods, Inc., 271 F.R.D. 465, 469 (E.D. N.C. 2010)) (alteration in original).

         FLSA class certification takes place in two stages. Hollis v. Alston Pers. Care Servs., LLC, No. 1:16CV1447, 2017 WL 3327591, at *2 (M.D. N.C. Aug. 3, 2017) (citing Solais, 2016 WL 1057038, at *5).[3] The first stage - applicable here - is conditional certification, during which the court determines whether the employees' claims are similar enough to merit the distribution of court-approved notice to possible class members. Id.; see also Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169 (1989) (“[D]istrict courts have discretion, in appropriate cases, to implement [§ 216(b)] by facilitating notice to potential plaintiffs.”). At this stage, “[c]ollective action plaintiffs are not bound by Rule 23's requirements of numerosity, commonality, typicality and adequacy; they need only demonstrate that they are ‘similarly situated' to proceed as a class.” Robinson v. Empire Equity Grp., Inc., No. WDQ-09-1603, 2009 WL 4018560, at *1 n.8 (D. Md. Nov. 18, 2009) (citing Mancia v. Mayflower Textile Servs. Co., No. CCB-08-273, 2008 WL 4735344, at *2 (D. Md. Oct. 14, 2008)); Solais, 2016 WL 1057038, at *5 n.6.

         Conditional certification is appropriate when it would serve judicial efficiency, Hoffmann-La Roche, 493 U.S. at 170, and the court must be mindful that granting conditional certification expands the scope of the litigation and begins a process of class-wide discovery, see, e.g., D'Anna v. M/A-COM, Inc., 903 F.Supp. 889, 894 (D. Md. 1995). The standard for conditional certification is “fairly lenient, ” but it is not a “rubber-stamp approach.” Adams v. Citicorp Credit Servs., Inc., 93 F.Supp.3d 441, 453 (M.D. N.C. 2015) (citation omitted). While parties generally “have minimal evidence at this point in the proceedings[, ] . . . [m]ere allegations will not suffice; some factual evidence is necessary.” Id. (citations omitted). The plaintiff must only make “a relatively modest factual showing that a common policy, scheme or plan that violated the law exists.” Hollis v. Alston Pers. Care Servs., LLC, No. 1:16CV1447, 2017 WL 3327591, at *3 (M.D. N.C. Aug. 3, 2017) (quoting Adams, 93 F.Supp.3d at 453). At this stage, “the Court does not resolve factual disputes, decide substantive issues on the merits, or make credibility determinations.” Solais, 2016 WL 1057038, at *6 (quoting Adams, 93 F.Supp.3d at 454).

         Williamson first contends that Clark has failed to allege any violation occurring as a result of a policy or custom. (Doc. 31 at 3-4.) In particular, Williamson notes that Clark provides no information regarding the potential size of the class she wishes to be certified. (Id.)[4] Williamson further contends that Clark relies primarily on hearsay statements from other employees, which may not be considered by the court in connection with a § 216(b) motion. (Id. at 4 (citing Harrison v. McDonald's Corp., 411 F.Supp.2d 862, 865 (S.D. Ohio 2005)).

         Clark contends that she has satisfied her “lenient burden” by identifying a specific payroll practice that allegedly violates the FLSA and applies to all home healthcare workers employed by the Defendant. (Doc. 32 at 1-3.) She claims that her declaration and supporting documentation establish that these home healthcare workers are similarly situated for purposes of conditional certification. (Id.) She further argues that courts may consider the hearsay statements within her declaration at this stage in the proceedings. (Id. at 3-7.)

         Contrary to Williamson's claim, “courts in the Fourth Circuit that have addressed the issue have held that hearsay evidence . . . supporting a motion for conditional certification may be considered so long as it is based on personal knowledge.” Hollis, 2017 WL 3327591, at *2 (quoting McCoy v. RP, Inc., C.A. No. 2:14- CV-3171-PMD, 2015 WL 6157306, at *3 (D.S.C. Oct. 19, 2015)). Here, Clark's declaration includes facts that constitute hearsay. (Doc. 16-4 ¶ 7 (“I know, from talking to other home healthcare workers, that Impact classified its home healthcare workers as independent contractors.”), ¶ 16 (relying in part on statements from other home healthcare workers), ¶ 23 (same)). The court finds that it may consider such evidence ...

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