Eans v. Lund ( 2023 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Edward Eans, No. CV-22-01532-PHX-DLR 10 Plaintiff, ORDER 11 v. 12 Sherry Lund, 13 Defendant. 14 15 Before the Court are the parties’ cross motions for summary judgment, which are 16 fully briefed. (Docs. 51-56.) For the reasons below, Plaintiff Edward Eans’ motion is 17 granted in part and denied in part, and Defendant Sherry Lund’s motion is denied.1 18 I. Background 19 Plaintiff was hired by Defendant on October 15, 2020, to serve for an indeterminate 20 period of time as one of multiple caretakers for her elderly parents (collectively “the 21 Sellmans”). (Doc. 51-1 ¶¶ 4, 11; Doc. 51-2 at 14; Doc. 52-3 at 25.) The Sellmans both 22 suffered from dementia. (Doc. 52-3 at 18.) Mr. Sellman also had a brain bleed from a prior 23 fall and Mrs. Sellman had congestive heart failure. (Id. at 18, 24.) Plaintiff was 24 recommended to Defendant by Camelview Staffing Agency as a potential caretaker based 25 on the caregiver experience Plaintiff gained while operating his own business, “Home 26 Houseman Services.” (Doc. 51-1 ¶¶ 5, 9; Doc. 51-2 at 3-6.) Defendant hired Plaintiff to 27 1 Defendant’s request for oral argument is denied because the issues are adequately 28 briefed, and oral argument will not assist the Court in reaching its decision. See Fed. R. Civ. P. 78(b); LRCiv. 7.2(f). 1 work 60 hours a week and paid him $20/hour for all hours worked. (Doc. 51-1 ¶ 21; Doc. 2 52-2 at 6.) Plaintiff and Defendant never discussed overtime work or pay. (Doc. 51-1 ¶ 20; 3 Doc. 51-2 at 39-40.) Plaintiff was paid via Zelle by Defendant’s daughter, Sabrina Lovejoy. 4 (Doc. 51-1 ¶ 22; Doc. 54-2 at 2.) Prior to starting work, Plaintiff signed an “Agreement to 5 Pay Personal Taxes” acknowledging Defendant would not automatically take out taxes 6 each pay period. (Doc. 51-6; Doc. 54-2 at 2.) Defendant provided Plaintiff with a Form- 7 1099 for tax purposes each year. (Doc. 51-1 ¶ 13.) 8 Defendant had set 12-hour shifts the caregivers could work. (Doc. 52-3 at 11.) 9 Plaintiff’s schedule consisted of night shifts from 8pm-8am, and one 24-hour shift from 10 Saturday at 8pm to Sunday at 8pm. (Doc. 51-1 ¶ 30; Doc. 51-2 at 49.) Sundays were the 11 only time Plaintiff worked during the day. (Doc. 51-1 ¶ 31.) Defendant created “Daily 12 Routine” sheets for the Monday-Saturday dayshift caregivers. (Doc. 54-3.) Each Daily 13 Routine sheet detailed the work Defendant expected to be done that day in terms of 14 housework. (Id.) Defendant did not create Daily Routine sheets for any of the nightshifts 15 or for the Sunday dayshift. (Doc. 51-1 ¶ 42; Doc. 51-2 at 72.) As a result, Plaintiff did not 16 follow a specific Daily Routine sheet for any of his shifts. (Id.) Plaintiff’s non-specified 17 job duties included watching the Sellmans, cooking meals when appropriate, checking the 18 Sellmans’ blood pressure and oxygen levels twice a day, doing laundry, and doing light 19 cleaning, among other things. (Doc. 51-1 ¶ 4; Doc. 52-2 at 20, 23-25; Doc. 52-3 at 22-24.) 20 Plaintiff logged information about each of his shifts in a “Daily Log” shared by all 21 caregivers. (Doc. 53-2; Doc. 54-2 at 3.) Plaintiff also often communicated with Defendant 22 about his shift activities via text message. (Doc. 51-7; Doc. 53-9; Doc. 54-2 at 3.) 23 On May 5, 2022, Plaintiff informed Defendant via text message that he could no 24 longer be a caregiver for the Sellmans due to his own heart condition. (Doc. 53-9 at 109.) 25 Then, on September 12, 2022, Plaintiff filed a complaint alleging Defendant had violated 26 the Fair Labor Standards Act of 1938 (“FLSA”) by failing to pay him overtime wages. 27 (Doc. 1.) On July 24, 2023, the parties filed cross motions for summary judgment. (Docs. 28 51, 52.) Both motions seek summary judgment on Plaintiff’s status as either an independent 1 contractor or employee; if the latter, whether the FLSA’s “companionship” exemption 2 applies to Plaintiff; and, assuming liability, whether Defendant would owe liquidated 3 damages. (Id.) Plaintiff’s motion also seeks summary judgment on Defendant’s obligation 4 to pay wages for Plaintiff’s sleep hours, and on Defendant’s laches affirmative defense. 5 (Doc. 52.) 6 II. Legal Standard 7 When parties submit cross-motions for summary judgment, the Court must consider 8 each motion on its own merits. Fair Hous. Council of Riverside Cnty., Inc. v. Riverside 9 Two, 249 F.3d 1132, 1136 (9th Cir. 2001). The Court will grant summary judgment when, 10 viewing the facts in a light most favorable to the nonmoving party, there is no genuine 11 dispute as to any material fact and the movant is entitled to judgment as a matter of law. 12 Fed. R. Civ. P. 56(a). A fact is material if it “might affect the outcome of the suit under the 13 governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is 14 genuine if a reasonable jury could return a verdict for the nonmoving party based on the 15 competing evidence. Id. 16 Summary judgment may also be entered “against a party who fails to make a 17 showing sufficient to establish the existence of an element essential to that party’s case, 18 and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 19 477 U.S. 317, 322 (1986). In such a situation, the party seeking summary judgment bears 20 the initial burden of informing the Court of the “basis for its motion, and identifying those 21 portions of the [record] which it believes demonstrates the absence of a genuine issue of 22 material fact.” Id. at 323 (citations and internal quotations omitted). The burden then shifts 23 to the non-movant to establish the existence of a genuine dispute of material fact. Id. at 24 324. The non-movant may not simply rest upon the allegations of her pleadings. Rather, 25 the non-movant must point to “specific facts showing that there is a genuine issue for trial.” 26 Id. at 324. Furthermore, the non-movant “must do more than simply show that there is 27 some metaphysical doubt as to the material facts. . . . Where the record taken as a whole 28 could not lead a rational trier of fact to find for the non-moving party, there is no genuine 1 issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 2 (1986) (internal quotation and citation omitted). 3 III. Discussion 4 Plaintiff argues that he is an “employee” not covered by the companionship 5 exemption and is therefore entitled to overtime wages. He also argues that Defendant’s 6 failure to pay overtime wages was not in good faith, entitling him to liquidated damages 7 under the FLSA. Lastly, Plaintiff argues that Defendant cannot assert a laches defense 8 because the FLSA provides its own statute of limitations. 9 Defendant argues that Plaintiff is an independent contractor but, alternatively, if he 10 was an employee, then he falls under the FLSA’s companionship exemption and is 11 therefore not entitled to overtime wages. Defendant also asserts that she is not liable for 12 liquidated damages because she had a good faith basis and reasonable grounds for not 13 paying Plaintiff overtime wages. Though Defendant does not make a specific argument 14 regarding her ability to assert a laches defense, she requests Plaintiff’s motion for summary 15 judgment be denied on the issue. 16 A. Plaintiff is an employee under the FLSA. 17 Under the FLSA an employee “means any individual employed by an employer.” 18 29 U.S.C. § 203(e)(1). To employ is to “suffer or permit to work.” Id. at § 203(g). To 19 distinguish employees from independent contractors for purposes of the FLSA, the Court 20 applies the “economics realities test,” which requires consideration of factors such as: 21 (1) the degree of the alleged employer’s right to control the manner in which the work is to be performed; (2) the alleged 22 employee’s opportunity for profit or loss depending upon his managerial skill; (3) the alleged employee’s investment in 23 equipment or materials required for his task, or his employment of helpers; (4) whether the service rendered 24 requires a special skill; (5) the degree of permanence of the working relationship; and (6) whether the service rendered is 25 an integral part of the alleged employer’s business. 26 Real v. Driscoll Strawberry Ass., Inc., 603 F.2d 748, 754 (9th Cir. 1979). No single factor 27 is dispositive. Rather, the determination depends “upon the circumstances of the whole 28 activity.” Id. (quoting Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947)). 1 As to the first factor, the record reflects that Defendant maintained the right to 2 control Plaintiff’s work. The “‘right to control’ does not require continuous monitoring of 3 employees” and is “significant when it shows an individual exerts such control . . . that she 4 stands as a separate economic entity.” Mathis v. Housing Authority of Umatilla Cnty., 242 5 F.Supp.2d 777, 783 (D. Or. 2002) (internal quotations and citations omitted). Although 6 Plaintiff did not follow a specific Daily Activities sheet for his shifts, his general duties 7 were determined by Defendant. (Doc. 52-2 at 8.) Defendant required Plaintiff to document 8 his shifts in the Daily Log and to communicate with her via text message. (Doc. 54-2 at 9 91.) Any changes to the Sellmans’ routine had to go through Defendant. (Doc. 52-2 at 16.) 10 Defendant also controlled the days and durations of Plaintiff’s shifts, minus any shifts 11 Plaintiff picked up or switched with other caregivers. (Doc. 51-1 ¶¶ 26, 32; Doc. 52-2 at 6; 12 Doc. 52-3 at 11.) Thus, the degree of control indicates an employee/employer relationship. 13 Because Plaintiff was paid at a fixed hourly rate of $20, he had no opportunity for 14 profit or loss other than by charging Defendant for the number of hours he worked. 15 Accordingly, the second factor weighs in favor of an employee/employer relationship. 16 Plaintiff made no investment in equipment or materials required for his work. All 17 the equipment, such as that required to take the Sellmans’ blood pressure and oxygen 18 levels, was provided by Defendant. (Doc. 52-2 at 8.) Therefore, the third factor favors an 19 employee/employer relationship. 20 Under the fourth factor, Plaintiff’s work did not require special skill. Although 21 Plaintiff was hired due to his previous experience in a caregiver role, his routine job 22 functions were provided for and explained by Defendant. (Id. at 9-10.) Plaintiff was not 23 required to have any special licenses or certifications for the job. (Id.) As Plaintiff did not 24 use any special skills, this factor weighs towards finding an employee/employer 25 relationship. 26 Plaintiff was hired for an indeterminate duration and either Plaintiff or Defendant 27 could terminate the relationship at any time. (Doc. 52-3 at 25.) This is reflected by 28 Plaintiff’s termination of the relationship with Defendant via text on May 27, 2022. (Doc. 1 53-9 at 109.) These facts cause the degree of permanence factor to favor an 2 employee/employer relationship. 3 In totality,2 the economic realities reveal Plaintiff was an employee under the FLSA, 4 not an independent contractor. Accordingly, Plaintiff is entitled to summary judgment on 5 the issue of his status as an employee. Defendant’s cross-motion on Plaintiff’s status as an 6 independent contractor is denied. 7 B. Triable issues of fact exist as to the Companionship Exemption. 8 The FLSA requires employers ordinarily pay employees time and one-half their 9 typical hourly wage for work exceeding 40 hours per week. 29 U.S.C. § 207(a)(1). Section 10 213 of the FLSA provides exemptions to this general rule, relieving employers of their duty 11 to pay overtime wages. The “companionship exemption” exempts from overtime wages: 12 any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee 13 employed in domestic service employment to provide companionship services for individuals who (because of age or 14 infirmity) are unable to care for themselves. 15 Id. at § 213(15). 16 “Companionship services” is defined as “the provision of fellowship and protection 17 for an elderly person or person with an illness, injury, or disability who requires assistance 18 in caring for himself or herself.” 29 C.F.R. § 552.6(a). “Provision of fellowship” means “to 19 engage the person in social, physical, and mental activities, such as conversation, reading, 20 games, crafts, or accompanying the person on walks, on errands, to appointments, or to 21 social events.” Id. “Provision of protection” means to “be present with the person in his or 22 her home or to accompany the person when outside of the home to monitor the person’s 23 safety and well-being.” Id. 24 Companionship services may include the provision of care if the care is “provided 25 attendant to and in conjunction with the provision of fellowship and protection and if it 26 does not exceed 20 percent of the total hours worked per person per workweek.” Id. at (b). 27 2 The sixth factor is not relevant to the present facts because Defendant was not 28 operating a business but merely hiring caregivers for her parents. 1 The “provision of care” means “to assist the person with activities of daily living (such as 2 dressing, grooming, feeding, bathing, toileting, and transferring) and instrumental activities 3 of daily living, which are tasks that enable a person to live independently at home (such as 4 meal preparation, driving, light housework, managing finances, assistance with the 5 physical taking of medications, and arranging medical care).” Id. 6 An “employer who claims an exception from the FLSA has the burden of showing 7 that the exemption applies.” Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 1124 (9th Cir. 8 2002) (quoting Donovan v. Nekton, Inc., 703 F.2d 1148, 1151 (9th Cir. 1983)). The 9 employer must prove that the plaintiff fits plainly and unmistakably within the terms and 10 spirit of the exemption. Id. 11 Defendant argues that Plaintiff falls within the companionship exemption because 12 he was a domestic service employee that primarily provided fellowship/protection and 13 spent less than 20% of his time on the provision of care. Any provision of care tasks was 14 primarily completed by the day shift caregivers as they were a part of the Daily Routine 15 sheets or because the Sellmans were awake. Plaintiff did not follow a Daily Routine sheet 16 for any of his shifts and was therefore rarely required to do any tasks that would fall under 17 the provision of care. Plaintiff’s entries in the Daily Log were also sparse, which Defendant 18 argues proves he did not, and could not have, provided care for 20% or more of the time. 19 Plaintiff argues that the lack of a Daily Routine sheet for his shifts and his sparse 20 Daily Log entries are not dispositive of whether he spent 20% or more of his time on care. 21 Despite mainly working night shifts, the Sellmans were constantly awake, requiring 22 Plaintiff to provide further care than may seem typical for nighttime. (Doc. 52-2 at 17-18; 23 Doc. 53-9 at 83.) Plaintiff routinely performed tasks that would constitute care, such as 24 dressing, showering, and transferring the Sellmans. Plaintiff also administered the 25 Sellmans’ medications and took their blood pressure, heart rate, and oxygen twice a day. 26 Neither Defendant nor the other caregivers witnessed first-hand any of Plaintiff’s shifts or 27 knew for sure what he did each shift. (Doc. 51-3 ¶¶ 16-17; Doc. 51-4 ¶¶ 16-17; Doc. 52-3 28 at 17, 25.) 1 Based on this competing evidence, the Court finds genuine issues of material fact 2 preclude summary judgment for either party on the applicability of the companionship 3 exemption. Both parties’ motions therefore are denied as to this issue. 4 C. Liquidated Damages 5 The FLSA states: 6 Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or 7 employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may 8 be, and in an additional equal amount as liquidated damages. 9 29 U.S.C. § 216(b). 10 An employer may be exempt from paying liquidated damages if “the employer 11 shows to the satisfaction of the court that the act or omission giving rise to such action was 12 in good faith and that he had reasonable grounds for believing that his act or omission was 13 not a violation of the [FLSA].” 29 U.S.C. § 260. 14 Defendant argues she had a good faith basis and reasonable grounds for not paying 15 Plaintiff overtime wages; Plaintiff argues the opposite. At this time, however, the Court 16 declines to wade into damages because triable issues of fact preclude summary judgment 17 on the predicate issue of liability. The parties’ motions for a liquidated damages 18 determination are denied.3 19 D. Laches 20 Laches is an “equitable defense that prevents a plaintiff, who with full knowledge 21 of the facts, acquiesces in a transaction and sleeps upon his rights.” Danjaq LLC v. Sony 22 Corp., 263 F.3d 942, 950-51 (9th Cir. 2001) (internal citations and quotations omitted). 23 However, laches is “inapplicable where Congress has provided a statute of limitations to 24 govern the action.” Miller v. Maxwell’s Intern. Inc., 991 F.2d 583, 586 (9th Cir. 1993). The 25 FLSA includes a statute of limitations governing “any cause of action for unpaid minimum 26 27 3 Plaintiff’s argument that Defendant cannot exclude Plaintiff’s sleep hours from 28 paid wages appears to be a non-issue, as Defendant concedes that Plaintiff’s sleep hours had always been compensated. || wages, unpaid overtime compensation, or liquidated damages.” 29 U.S.C. § 255. Accordingly, Defendant cannot assert a laches defense, see Solis v. Washington, No. 08- 5362RJB, 2009 WL 2855441, at *7 (W.D. Wash. Aug. 31, 2009), and Plaintiff's motion 4|| for summary judgment on this issue is granted. 5 IT IS ORDERED that Defendant’s motion for summary judgment (Doc. 51) is || DENIED, and Plaintiff's motion for summary judgment (Doc. 52) is GRANTED IN 7|| PART and DENIED IN PART as explained herein. 8 IT IS FURTHER ORDERED that the parties shall participate in a telephonic trial 9|| scheduling conference on December 21, 2023, at 10:00 a.m. Call-in instructions will be 10 || provided via separate email. 11 Dated this 7th day of November, 2023. 12 13 14 {Z, 16 Usted States Dictric Judge 17 18 19 20 21 22 23 24 25 26 27 28 -9-