Ruffin v. New Destination, LLC

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JANICE RUFFIN et al.,
Plaintiffs,
v. Civil Action No. 09–871 (CKK)
NEW DESTINATION, LLC et al.,
Defendants.
MEMORANDUM OPINION
(August 8, 2011)
Plaintiffs Janice Ruffin and Rev. Keith Young (collectively, “Plaintiffs”) filed this action
against Defendants New Destination, LLC and India Lyles (collectively, “Defendants”) seeking
to recover wages they claim they are owed for hours worked as employees of Defendant New
Destination, LLC. Plaintiffs have asserted a claim for breach of contract and causes of action
under the Fair Labor Standards Act, 29 U.S.C. § 201 (“FLSA”), and the D.C. Wage Payment and
Collection Law, D.C. Code § 32-1308 (“DCWPCL”). On March 29, 2011, the Court granted-in-
part and denied-in-part Plaintiffs’ motion for summary judgment, entering judgment against
Defendant New Destination, LLC on Plaintiffs’ breach of contract claim. The Court dismissed
Plaintiffs’ breach of contract claim against Defendant Lyles because it was clear from the record
that Lyles was not a party to those agreements. The Court also ruled that Plaintiffs had failed to
state a claim against Defendant Lyles as the alter ego of Defendant New Destination, LLC. With
respect to Plaintiffs’ other claims, the Court denied Plaintiffs’ motion for summary judgment
without prejudice because Plaintiffs failed to adequately discuss the elements of those claims.
Presently pending before the Court is Plaintiffs’ [35] Renewed Motion for Summary
Judgment. Plaintiffs contend that they are entitled to judgment against Defendants on their
FLSA and DCWPCL claims because the undisputed facts clearly show that they were not paid
wages owed to them. For the reasons explained below, the Court agrees that Plaintiffs are
entitled to judgment on their FLSA and DCWPCL claims. Accordingly, the Court shall GRANT
Plaintiffs’ renewed motion for summary judgment. Furthermore, because Defendants failed to
file an opposition to Plaintiffs’ renewed motion for summary judgment, the Court may
alternatively grant the motion as conceded.
I. BACKGROUND
The following facts are drawn primarily from Plaintiffs’ Statement of Undisputed
Material Facts (“Pls.’ Stmt.”), which was filed with Plaintiffs’ initial motion for summary
judgment.1 Additional facts are drawn from Plaintiffs’ Statement of Material Facts as to Which
There Is No Genuine Issue (“Pls.’ 2d Stmt.”), which was filed with their renewed motion for
summary judgment; the Court accepts these facts as undisputed because Defendants failed to file
an opposition to Plaintiffs’ renewed motion for summary judgment.
Plaintiff Janice Ruffin (“Ruffin”) is a social worker with a license in counseling issued by
the District of Columbia. Pls.’ Stmt. ¶ 1. Since earning a masters degree in social work, Ruffin
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The Court strictly adheres to the text of Local Civil Rule 7(h) (formerly Rule 56.1) when
resolving motions for summary judgment. See Burke v. Gould, 286 F.3d 513, 519 (D.C. Cir.
2002) (finding that district courts must invoke the local rule before applying it to the case). The
Court has advised the parties that it strictly adheres to Rule 7(h) and has stated that it “assumes
facts identified by the moving party in its statement of material facts are admitted, unless such a
fact is controverted in the statement of genuine issues filed in opposition to the motion.” [27]
Order at 2 (Jan. 28, 2010). Thus, in most instances the Court shall cite only to one party’s
Statement of Material Facts (“Stmt.”) unless a statement is contradicted by the opposing party, in
which case the Court may cite a party’s Response to the Statement of Material Facts (“Resp.
Stmt.”). The Court shall also cite directly to evidence in the record, where appropriate.
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has worked with adults and juveniles in Washington, D.C., many of whom have a history of
substance abuse. Id. Rev. Keith Young (“Young”) is an “Elder” in the Apostolic Christian
Church and is currently the Pastor of Sovereign Ministries of the Apostolic Faith in Washington,
D.C. Id. ¶ 2. Young earned a Ph.D. in pastoral counseling in 2000 and provides pastoral
counseling to his members and works as a spiritual counselor. Id.
Defendant New Destination, LLC (“New Destination”) is a professional corporation that
provided individual and group counseling for addiction recovery. Pls.’ Stmt. ¶ 3. Defendant
India Lyles (“Lyles”) is the Executive Director and owner of New Destination. Id. ¶ 4; Answer
¶ 6. On May 8, 2008, New Destination entered into a Health Care Provider Agreement with the
D.C. Department of Health Addiction Prevention and Recovery Administration to provide health
care services as part of a drug treatment program. Pl.’s Stmt. ¶ 7; Pl.’s Ex. 5 (“Human Care
Provider Agreement”). Lyles signed the contract as “CEO” of New Destination. Pl.’s Stmt. ¶ 8.
The contract became effective on May 21, 2008. Id. ¶ 9. The Articles of Organization that New
Destination filed with the D.C. government show state that Lyles has a “50% ownership as a
member, with such capital accounts, management control, and percentage ownerships and rights
to receive profits and losses as are set fourth [sic] in the Operating Agreement, Membership
Certificates and such other written agreements between the members.” Pls.’ 2d Stmt. ¶ 6.
Both Young and Ruffin submitted “Application[s] for Employment” with Defendants in
2008. Pls.’ 2d Stmt. ¶ 1. The application form asked for “employment desired” and stated at the
top, “Pre-Employment Questionnaire Equal Opportunity Employer.” Id. On February 18, 2008,
Ruffin signed a contract with New Destination to work as a counselor. Pls.’ Stmt. ¶ 3. New
Destination agreed to pay Ruffin $50 per hour for individual counseling and $65 per hour for
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group counseling. Id. ¶ 6. Young signed a contract to work for New Destination as a “Faith
Based Minister” on April 10, 2008. Id. ¶¶ 5-6. New Destination agreed to pay Young $17 per
hour. Id. ¶ 6. Soon after being hired, Ruffin and Young recruited clients for New Destination
from missions, jails, and throughout the District of Columbia. Id. ¶ 11. The “Professional
Services Agreement” that each plaintiff signed states that New Destination, as the “Client,” can
terminate the Agreement “for cause of non-performance.” Pls.’ 2d Stmt. ¶ 2. Under “Service
Delivery,” the Agreement states that “[t]he extent of your authority of the execution of the
program will be determined by the Clinical Director.” Id. ¶ 3. Under “Compensation and
Operating Hours,” the Agreement states that “[y]ou will be expected to work up to thirty (40)
[sic] hours per week at the rate of $ per hour [sic]. . . . Any changes in your scheduled working
hours shall be approved by the Clinical Director.” Id. Lyles signed the Professional Services
Agreement for both Ruffin and Young in her capacity as the Executive Director of New
Destination. Id. ¶ 7.
Ruffin counseled her first client at New Destination on May 21, 2008. Pl.’s Stmt. ¶ 12.
Ruffin provided both group counseling and individual counseling for addiction recovery and
prevention for her clients at New Destination. Id. ¶ 14. Ruffin submitted time sheets known as
“NDBHS Tickets” to Lyles listing the date and hours worked and the names of the clients she
counseled. See id.; Pl.’s Ex. 6 (NDBHS Tickets). Ruffin worked hundreds of hours for New
Destination between May and October 2008 and claims that she is owed $15,675.25 in back pay.
See Pl.’s Ex. 4 (Decl. of Janice Ruffin) ¶ 9. Ruffin’s only payment from New Destination came
in the form of a $1000 check issued on October 9, 2008. Id. ¶ 10. Ruffin claims that Lyles was
responsible for providing information about her counseling sessions to the D.C. Department of
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Health. Id. ¶ 13. Defendants do not dispute that Lyles told New Destination employees that she
was “solely responsible for billing.” Pl.’s Stmt. ¶ 11. Lyles admitted that only she was
responsible for sending documents to the D.C. Department of Health for reimbursement. Pls.’ 2d
Stmt. ¶ 8.
Young also worked hundreds of hours between April and December 2008 counseling
clients for New Destination, and he submitted “NDBHS Tickets” to Lyles describing the services
performed. See Pl.’s Ex. 3 (Decl. of Rev. Keith Young) ¶¶ 5, 7; Pl.’s Exs. 8A, 8B, 8C, 8D
(NDBHS Tickets). Young was only paid twice, once with a $1000 check on October 8, 2008,
and a second time with a $1500 check on October 31, 2008. Pl.’s Ex. 3 (Decl. of Rev. Keith
Young) ¶ 8. The $1500 check bounced, and Lyles subsequently paid Young $1000 in cash. Id.
Young claims that he is owed $11,500 in back pay. Id. ¶ 9.
II. LEGAL STANDARD
Plaintiffs have moved for summary judgment on all of their claims pursuant to Federal
Rule of Civil Procedure 56. “The 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(a).
A party asserting that a fact cannot be or is genuinely disputed must support the
assertion by:
(A) citing to particular parts of materials in the record, including depositions,
documents, electronically stored information, affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions, interrogatory
answers, or other materials); or
(B) showing that the materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce admissible evidence to
support the fact.
Fed. R. Civ. P. 56(c)(1). “If a party fails to properly support an assertion of fact or fails to
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properly address another party’s assertion of fact as required by Rule 56(c), the court may . . .
consider the fact undisputed for purposes of the motion.” Fed. R. Civ. P. 56(e). When
considering a motion for summary judgment, the court may not make credibility determinations
or weigh the evidence; the evidence must be analyzed in the light most favorable to the
nonmoving party, with all justifiable inferences drawn in his favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986). “If material facts are at issue, or, though undisputed, are
susceptible to divergent inferences, summary judgment is not available.” Moore v. Hartman, 571
F.3d 62, 66 (D.C. Cir. 2009) (citation omitted).
The mere existence of a factual dispute, by itself, is insufficient to bar summary
judgment. See Liberty Lobby, Inc., 477 U.S. at 248. “Only disputes over facts that might affect
the outcome of the suit under the governing law will properly preclude the entry of summary
judgment.” Id. For a dispute about a material fact to be “genuine,” there must be sufficient
admissible evidence that a reasonable trier of fact could find for the nonmoving party. Id. The
Court must determine “whether the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”
Id. at 251-52. “If the evidence is merely colorable, or is not sufficiently probative, summary
judgment may be granted.” Id. at 249-50 (internal citations omitted). The adverse party must
“do more than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Conclusory
assertions offered without any factual basis in the record cannot create a genuine dispute. See
Ass’n of Flight Attendants-CWA v. U.S. Dep’t of Transp., 564 F.3d 462, 465-66 (D.C. Cir. 2009).
III. DISCUSSION
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As the Court noted in its prior Memorandum Opinion, Plaintiffs’ claims in this case are
very simple—they are seeking payment for counseling services they performed for New
Destination. The Court has already ruled that based on the undisputed facts on the record, Ruffin
and Young were not paid for counseling services they performed for New Destination worth
$15,675.25 and $11,500, respectively. The Court has entered judgment against New Destination
on Plaintiffs’ breach of contract claim for these amounts. The question remaining before the
Court is whether Plaintiffs are entitled to judgment against New Destination and Lyles on their
claims under the DCWPCL and the FLSA by virtue of Defendants’ failure to pay them wages
under their employment contract. The Court shall therefore analyze the elements of each of these
claims.
A. Claims Under the D.C. Wage Payment and Collection Law
Plaintiffs’ first cause of action is for violation of the D.C. Wage Payment and Collection
Law, D.C. Code §§ 32-1301 et seq. The DCWPCL provides, inter alia, that “[e]very employer
shall pay all wages earned to his employees at least twice during each calendar month, on regular
paydays designated in advance by the employer . . . .” D.C. Code § 32-1302. The law defines an
employee as “any person suffered or permitted to work by an employer except any person
employed in a bona fide executive, administrative, or professional capacity (as such terms are
defined and delimited by regulations promulgated by the Council of the District of Columbia).”
Id. § 32-1301(2). The Court noted in its prior opinion that it was unclear whether Plaintiffs, who
are both highly educated professionals, were employed in a bona fide professional capacity, an
exempt category under the D.C. Wage Payment and Collection Law.
The D.C. Municipal Regulations provide a five-prong test for determining whether a
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person is employed in a bona fide professional capacity. See D.C. Mun. Reg. tit. 7, § 999.1. The
employee must satisfy all five elements of the test to be determined employed in a bona fide
professional capacity. Id. The last element of the test is that the employee is “[p]aid on a salary
or fee basis at a rate of not less than $170 a week.” Id. Plaintiffs argue that because their
contracts contemplated payment on an hourly basis depending on the work performed, they were
not paid on a “salary or fee basis” and therefore were not employed in a bona fide professional
capacity. Accordingly, they argue they are not subject to the exemption under the DCWPCL.
The D.C. Municipal Regulations do not define the terms “salary or fee basis”; however,
the regulations state that “[i]nterpretations of the term ‘professional capacity’ shall be made in
accordance with Title 29 Code of Federal Regulations, Part 541, Defining the Terms ‘Executive,’
‘Administrative,’ ‘Professional’ and ‘Outside Salesman.’” Id. Federal regulations do define the
terms “salary basis” and “fee basis.” See 29 C.F.R. § 541.602 (“Salary basis”); id. § 541.605
(“Fee basis”). Under those definitions, a “salary basis” employee is one who regularly receives a
predetermined amount which is not subject to reduction because of variations in the quantity of
work performed. See id. § 541.602(a). A “fee basis” employee is one who is paid an agreed sum
for a single job regardless of the time required for its completion; a “fee” is paid for the kind of
job that is unique rather than for a series of jobs repeated an indefinite number of times and for
which payment on an identical basis is made over and over again. Id. § 541.605(a). Based on
these definitions, it is clear that Plaintiffs were not employed by New Destination on a salary or
fee basis. Accordingly, Plaintiffs were not employed in a bona fide professional capacity and
therefore qualify as “employees” subject to the provisions of the D.C. Wage Payment and
Collection Law. Therefore, Plaintiffs are entitled to judgment on their DCWPCL claims against
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New Destination.2
B. Claims Under the Fair Labor Standards Act
Like the DCWPCL, the FLSA provides a cause of action for employees to sue their
employers for unpaid minimum wages or overtime compensation. See 29 U.S.C. § 216(b). The
FLSA broadly defines “employee” as “any individual employed by an employer.” 29 U.S.C.
§ 203(e)(1). The FLSA also contains an exemption for employees employed in a bona fide
professional capacity. See 29 U.S.C. § 213(a)(1). However, the Court need not determine
whether Plaintiffs fall under this exemption because the case law is clear that FLSA exemptions
are “affirmative defense[s] on which the employer has the burden of proof.” McKinney v. United
Stor-All Centers LLC, 656 F. Supp. 2d 114, 120 (D.D.C. 2009) (citing Corning Glass Works v.
Brennan, 417 U.S. 188, 196-97 (1974). Defendants did not raise this affirmative defense in their
answer, and therefore it is waived. Fed. R. Civ. P. 8(c) (“In responding to a pleading, a party
must affirmatively state any avoidance or affirmative defense . . . .”). However, the Court must
determine whether Plaintiffs were employees of New Destination as opposed to independent
contractors, who are not covered by the statute.
To determine whether an individual is an employee covered by the statute as opposed to
an independent contractor, courts must consider a series of factors involving the plaintiff’s
relationship to the employer. See Morrison v. Int’l Programs Consortium, Inc., 253 F.3d 5, 10-
11 (D.C. Cir. 2001). These factors include whether the employer (1) had the power to hire and
fire employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained employment
2
Plaintiffs do not seek judgment against Lyles on their DCWPCL claims.
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records. Id. No single factor is dispositive; courts are directed to look at the totality of the
circumstances and consider any relevant evidence. Id. The Court is persuaded that Plaintiffs
qualified as employees under this “economic reality” test. The undisputed facts show that
Defendants had the power to hire and fire Plaintiffs; the employment contracts signed by
Plaintiffs and Defendants dictated that Plaintiffs’ authority would be subject to supervision by the
Clinical Director; the rate and method of payment were fixed by the employment contract; and
Defendants maintained employment records in the form of time sheets that were filled out by
Plaintiffs. Therefore, the Court finds that Plaintiffs are employees subject to the requirements of
the FLSA. Alternatively, because Defendants failed to file an opposition to Plaintiffs’ renewed
motion for summary judgment, the Court finds that Defendants have conceded that Plaintiffs are
employees covered by the FLSA.
Plaintiffs argue that they are entitled to judgment not only against New Destination but
also against Lyles because she exercised “operational control” over New Destination. The FLSA
defines “employer” as “any person acting directly or indirectly in the interest of an employer in
relation to an employee.” 29 U.S.C. § 203(d). “The overwhelming weight of authority is that a
corporate officer with operational control of a corporation’s covered enterprise is an employer
along with the corporation, jointly and severally liable under the FLSA for unpaid wages.”
Donovan v. Agnew, 712 F.2d 1509, 1511 (2d Cir. 1983). “One who is the chief executive officer
of a corporation, has a significant ownership interest in it, controls significant functions of the
business, and determines salaries and makes hiring decisions has operational control and
qualifies as an ‘employer’ for purposes of FLSA.” U.S. Dep’t of Labor v. Cole Enters., Inc., 62
F.3d 775, 778 (6th Cir. 1995). In this case, the record shows that Lyles had at least a 50%
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ownership stake in New Destination and acted as its primary officer. She made hiring decisions,
determined wages, signed contracts, and was responsible for making payments on behalf of the
corporation. Accordingly, the Court finds that Lyles qualifies as an “employer” for purposes of
the FLSA and may be held liable for failing to pay wages to Plaintiffs.
C. Liquidated Damages
Having concluded that Defendants are liable for unpaid wages under both the DCWPCL
and the FLSA, the Court must now turn to the question of damages. Both the D.C. statute and
the FLSA provide for an award of liquidated damages. See D.C. Code § 32-1303(4) (“If an
employer fails to pay an employee wages earned as required . . ., such employer shall pay, or be
additionally liable to, the employee, as liquidated damages, 10 per centum of the unpaid wages
for each working day during which such failure shall continue after the day upon which payment
is hereunder required, or an amount equal to the unpaid wages, whichever is smaller . . . .”); 29
U.S.C. § 216(b) (“An employer who violates the [FLSA] . . . shall be liable for such legal or
equitable relief as may be appropriate . . ., including without limitation employment,
reinstatement, promotion, and the payment of wages lost and an additional equal amount as
liquidated damages.”) (emphasis added). An employer may avoid an award of liquidated
damages under the FLSA if he can show that he had a reasonable belief that his acts or omissions
did not violate the law. See 29 U.S.C. § 260. However, Defendants have made no such showing
to the Court. Accordingly, the Court finds that it is proper to award liquidated damages. The
amount of liquidated damages in this case is the same under the DCWPCL and the FLSA, i.e.,
the amount of unpaid wages. Accordingly, the Court shall enter judgment against Defendants on
the DCWPCL and FLSA claims in the amounts of $31,350.50 for Ruffin and $23,000 for Young.
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IV. CONCLUSION
For the foregoing reasons, the Court finds that New Destination is liable as an employer
under the D.C. Wage Payment and Collection Law and under the Fair Labor Standards Act for
failing to pay wages to Plaintiffs and that Lyles may also be held liable under the FLSA.
Accordingly, the Court shall GRANT Plaintiffs’ [35] Renewed Motion for Summary Judgment.
The Court shall enter judgment against Defendants for the amount of the actual unpaid wages
and an additional equal amount as liquidated damages, totaling $31,350.50 for Plaintiff Ruffin
and $23,000 for Plaintiff Young. An appropriate Order accompanies this Memorandum Opinion.
Date: August 8, 2011
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
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