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Jones v. Fidelity Resources, Inc.

United States District Court, D. Maryland

August 30, 2019

DEVIN JONES, et al. Plaintiffs,
v.
FIDELITY RESOURCES, INC., Defendant.

          MEMORANDUM OPINION

          RICHARD D. BENNETT, UNITED STATES DISTRICT JUDGE

         Plaintiffs Devin Jones (“Plaintiff” or “Jones”) and other similarly situated employees bring this action against their former employer, Defendant Fidelity Resources, Inc. (“Defendant” or “Fidelity”), alleging failure to pay overtime wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl. § 3-401, et seq., and the Maryland Wage Payment and Collection Law, Md. Code Ann., Lab. & Empl., § 3-501, et seq. (“MWPCL”). (Compl., ECF No. 1.)

         On February 1, 2018, this Court issued a Memorandum Opinion and accompanying Order (ECF No. 4, 5) which permitted Plaintiff to proceed with an FLSA collective action, see 29 U.S.C. § 216(b), conditionally certified a class consisting of “all hourly employees who worked for Fidelity Resources, Inc. in the ISS and/or PSS programs from May 2014 to February 1, 2018, ” and permitted notice of this action to be provided to the class members. As a result, numerous plaintiffs have submitted opt-in forms indicating their consent to join the collective action.[1]

         Now pending before this Court are: Plaintiffs' Motion for Class Certification (ECF No. 72); Defendant's Motion to Strike Untimely Opt-in Plaintiffs (ECF No. 75); Defendant's Motion to Dismiss Counts II and III of Plaintiffs' Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) (ECF No. 76); and Plaintiffs' Motion for Summary Judgment (ECF No. 77). The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons that follow, Plaintiffs' Motion for Class Certification (ECF No. 72) is GRANTED; Defendant's Motion to Strike Untimely Opt-in Plaintiffs (ECF No. 75) is DENIED; Defendant's Motion to Dismiss Counts II and III of Plaintiff's Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) (ECF No. 76) is DENIED; and Plaintiffs' Motion for Summary Judgment (ECF No. 77) is GRANTED IN PART AND DENIED IN PART. Specifically, Plaintiffs are entitled to Summary Judgment on Defendant's affirmative defense as to the companionship services exemption, but not entitled to a finding of liquidated damages at this time.

         BACKGROUND

         Jones alleges that his former employer, Fidelity, unlawfully withheld overtime payments from him and other employees for their round-the-clock work caring for Fidelity clients suffering from physical and cognitive disabilities. (Compl. 2, ECF No. 1.) Fidelity, a non- profit Maryland corporation, contracts with the Maryland Developmental Disabilities Administration (“MDDA”) to provide services to individuals with disabilities. (Oparah Aff. ¶¶ 2-3, ECF No. 13-1.) Fidelity provides services through four programs:

a. Individual Family Care (or “IFC”) program, which provides adult foster care services;
b. Family Support Services (or “FSS”) program, which provides in-home services to children under twenty (20) years old;
c. Individual Support Services (“ISS”) program, which provides independent adult living services; and
d. Personal Support Services (“PSS”) program, which provides independent adult living services.

(Id. at ¶ 2.) Clients in the ISS and PSS programs require 24-hour services while clients in the IFC and FSS programs do not. (Id.)

         The clients live in single-unit apartments leased and maintained by Fidelity. (Id. at ¶ 8; Joint Stipulation of Undisputed Facts at ¶ 2, ECF No. 72-5.) Clients reside in these apartments for the specific purpose of receiving care from Fidelity. (Pls.'s Ex. 2, Oparah Dep. 18:3-21, ECF No. 77-4.) Once Fidelity's services end (e.g., should the client wish to discontinue care), they are not permitted to remain in the apartments. (Id. at 27:3-13.) Fidelity exerts complete control over its apartment units: it manages them (Id. at 14:20-15:3; 20:16-20), cleans them (Id. at 15:7-18), furnishes them (Id. at 18:20-21), and pays the rent and other associated bills. (Id. at 18:8-15.) In some instances, clients contribute to or pay the utilities and rent for the leased apartments. (Def.'s Ex. A, Oparah Aff. ¶ 4, ECF No. 86-1.)

         Fidelity directly employs staff persons, known as “caregivers” or “home health specialists” to assist their clients. (Oparah Aff. at ¶ 8; McCullough Decl. at ¶¶ 4, 7, ECF No. 72-7; Wiggins Decl. at ¶¶ 4-5, ECF No. 72-8; Walabai Decl. at ¶¶ 4-5, ECF No. 72-9; Gee Decl. at ¶¶ 5-6, ECF No. 72-10.) Caregivers are compensated based on an hourly rate ranging from $9.00 to $11.00 per hour. (Oparah Dep. 43:11-19, 64:6-65:2; McCullough Decl. at ¶ 6; Wiggins Decl. at ¶ 7; Walabai Decl. at ¶ 7; Gee Decl. at ¶ 4.) They are paid directly by Fidelity, which contracts with third-party providers for payroll services. (Pls.'s Exhibit 1, Def.'s Answers to Interrogs. No. 17, ECF No. 77-3.) Fidelity exerts a great deal of control over the caregivers' employment. Caregivers are assigned to work for specific clients. (Oparah Dep. 25:16-26:1.) Christiana Oparah, Fidelity's CEO and corporate designee, testified that caregivers are assigned specific duties to perform for their assigned clients and are trained in how to perform those duties. (Id. at 36:18-37:5, 39:3-6.) Former employees aver that Fidelity dictated caregivers' schedules and required them to submit bi-weekly timesheets. (McCullough Decl. at ¶ 22; Wiggins Decl. at ¶ 20; Walabai Decl. at ¶ 20; Gee Decl. at ¶ 21.)

         Plaintiffs allege that they were not paid at the overtime rate mandated by state and federal law despite working well over forty hours per week. Fidelity admits that Plaintiffs and other caregivers in its ISS and PSS departments regularly worked overtime, but represents that “nobody was forced” to work overtime. (Oparah Dep. 52:1-10; 52:19-53:5.) Current and former employees state that they often worked as many as sixty to eighty hours per week, often over one hundred hours over the course of two weeks. (McCullough Decl. at ¶ 20; Wiggins Decl. at ¶ 16, Walabai Decl. at ¶ 17.) The Declaration of one current employee, Gloria Walabai, indicates that she consistently worked over 150 to 180 hours every two weeks and that in one two-week period she logged approximately two-hundred fifty hours of work because she was the only employee assigned to care for a particular client. (Walabai Decl. at ¶ 17.) On weekends, caregivers in these departments were scheduled to work a 48-hour shift. (Def.'s Answers to Interrogs. No. 3; Oparah Aff. at ¶ 8.)

         During her deposition, Oparah testified on behalf of Fidelity that the company only began paying its caregivers at the legally mandated overtime rate after a lawsuit was filed against it. In December 2015, a former Fidelity employee initiated a lawsuit accusing Fidelity of the same wage violations alleged in this lawsuit. Complaint, Clinton v. Fidelity Resources, Inc., ELH-15-3854 (D. Md.), ECF No. 1. In September 2016, the parties settled the lawsuit and the case was dismissed. Order, Clinton v. Fidelity Resources, Inc., ELH-15-3854 (D. Md.), ECF No. 24. In her deposition, Oparah testified that Fidelity has been “paying overtime since” that lawsuit was filed, [2] and that it was not “aware” of overtime laws beforehand. (Oparah Dep. 48:16-20; 50:2-8).

         Since the Oparah deposition, Fidelity has supplemented the record to indicate that its payment of overtime wages followed on the heels of new legal developments. In 2013, the Department of Labor promulgated a final regulation, scheduled to become effective on January 1, 2015. The regulation narrowed the scope of the “companionship services” exemption to the FLSA's overtime requirements. 29 C.F.R. § 552.109; see also Home Care Ass'n of America v. Weil, 799 F.3d 1084 (D.C. Cir. 2015), cert. denied, 136 S.Ct. 2506 (2016). Specifically, the regulation declares that “[t]hird party employers of employees engaged in companionship services . . . may not avail themselves of the minimum wage and overtime exemption provided by section [2]13(a)(15).” 29 C.F.R. § 552.109(a) (2015). The regulation also narrows the definition of “companionship services” to cover a broader swath of healthcare workers. On August 21, 2015, the District of Columbia Circuit Court of Appeals affirmed the new regulation. Home Care Ass'n of America, 799 F.3d at 1090. In a subsequently executed affidavit, Oparah testified that Fidelity's payment of overtime wages resulted from the enactment of 29 C.F.R. § 552.109, rather than from the Clinton lawsuit. (Def.'s Ex. A, Oparah Aff. at ¶ 2, ECF No. 86-1.)

         STANDARD OF REVIEW

         I. Motion to Dismiss.

         Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P 8(a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes the dismissal of a complaint if it fails to state a claim upon which relief can be granted. The purpose of Rule 12(b)(6) is “to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).

         The Supreme Court's opinions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), “require that complaints in civil actions be alleged with greater specificity than previously was required.” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). In Twombly, the Supreme Court articulated “[t]wo working principles” that courts must employ when ruling on Rule 12(b)(6) motions to dismiss. Iqbal, 556 U.S. at 678. First, while a court must accept as true the factual allegations contained in the complaint, the court is not so constrained when the factual allegations are conclusory or devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). Moreover, a court need not accept any asserted legal conclusions drawn from the proffered facts. Iqbal, 556 U.S. at 678. (stating that “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to plead a claim); see also Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012) (“Although we are constrained to take the facts in the light most favorable to the plaintiff, we need not accept legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments.” (internal quotation marks omitted)).

         Second, a complaint must be dismissed if it does not allege “a plausible claim for relief.” Iqbal, 556 U.S. at 679. Although a “plaintiff need not plead the evidentiary standard for proving” her claim, she may no longer rely on the mere possibility that she could later establish her claim. McCleary-Evans v. Maryland Department of Transportation, State Highway Administration, 780 F.3d 582, 584 (4th Cir. 2015) (emphasis omitted) (discussing Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) in light of Twombly and Iqbal). Under the plausibility standard, a complaint must contain “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. While the plausibility requirement does not impose a “probability requirement, ” id. at 556, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678; see also Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278, 291 (4th Cir. 2012) (“A complaint need not make a case against a defendant or forecast evidence sufficient to prove an element of the claim. It need only allege facts sufficient to state elements of the claim.” (emphasis in original) (internal quotation marks and citation omitted)). In making this assessment, a court must “draw on its judicial experience and common sense” to determine whether the pleader has stated a plausible claim for relief. Iqbal, 556 U.S. at 679. “At bottom, a plaintiff must nudge [its] claims across the line from conceivable to plausible to resist dismissal.” Wag More Dogs, LLC, 680 F.3d at 365 (internal quotation marks omitted).

         II. Motion for Class Certification.

         To obtain class certification, the Plaintiffs must meet all four requirements of Federal Rule of Civil Procedure 23(a), and at least one of the requirements of Rule 23(b). Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 423 (4th Cir. 2003). These requirements are referred to as numerosity, commonality, typicality, and adequacy of representation. Fed.R.Civ.P. 23(a). With respect to Rule 23(b), Plaintiffs seek certification of the putative class under Rule 23(b)(3), which requires a finding that common questions “predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). The plaintiff must establish that the class certification requirements have been met by a preponderance of the evidence. Brown v. Nucor Corp., 785 F.3d 895, 931-32 (4th Cir. 2015).

         “The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348, 131 S.Ct. 2541, 2550 (2011) (internal quotation marks and citation omitted). “Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule-that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common issues of law or fact, etc.” Id. at 351. In ruling on a class certification motion, a court must take a close look at the facts relevant to the certification question, even if those facts “tend to overlap with the merits of the underlying case.” Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 319 (4th Cir. 2006); accord Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004) (“[W]hile an evaluation of the merits . . . is not part of a Rule 23 analysis, the factors spelled out in Rule 23 must be addressed through findings, even if they overlap with issues on the merits.”).

         The Supreme Court recently noted that “‘sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,' and that certification is proper only if ‘the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.'” Wal-Mart, 564 U.S. at 350-51 (quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160 (1982)); see also Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978) (“[T]he class determination generally involves considerations that are ‘enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'”) (quoting Mercantile Nat. Bank v. Langdeau, 371 U.S. 555, 558 (1963)).

         III. Motion for Summary Judgment.

         Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant summary judgment 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.” Fed.R.Civ.P. 56(c). A material fact is one that “might affect the outcome of the suit under the governing law.” Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, summary judgment is proper “only when no ‘reasonable jury could return a verdict for the nonmoving party.'” Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d 1253, 1257 (Fed. Cir. 2001) (quoting Anderson, 477 U.S. at 255)). When considering a motion for summary judgment, ...


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