STEVE C. JONES, District Judge.
This matter is before the Court on Gentiva Health Services, Inc.'s ("Gentiva") Motion to Amend and Certify the Court's July 26, 2013 Order for Interlocutory Appeal [Doc. No. 634]. For the reasons explained in this order, Gentiva's motion is
Gentiva provides home healthcare services to patients throughout the United States [Doc. No. 508, 1].
Gentiva, believing the PPV Plan constituted a "fee basis" payment, classified all of its Clinicians compensated under the PPV Plan as professional employees exempt from overtime compensation under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. [id. at 10].
On May 10, 2010, former Clinicians Lisa Rindfleisch, Tiffany Melendez, Michelle Gentile, Laurie Baker, and Christina Nelmes (collectively "named plaintiffs") filed this action, on behalf of themselves and other similarly situated individuals, against Gentiva seeking overtime wages under the FLSA [Doc. No. 1, 1].
On May 26, 2011, in order to expedite this proceeding, the undersigned entered an order (the "May 26th Order") bifurcating this case into a liability phase and a damages phase [Doc. No. 194, 6]. At the close of the liability phase, both Plaintiffs and Gentiva filed dueling motions for partial summary judgment regarding the legality of the PPV Plan [Doc. No. 502, 1; Doc. No. 512, 1]. On July 26, 2013, the undersigned entered an order (the "July 26th Order") granting Plaintiff's motion for partial summary judgment and denying Gentiva's motion for partial summary judgment [Doc. No. 631, 31]. Specifically, the July 26th Order articulates the undersigned's determination that "Gentiva's non-visit fees under the PPV Plan do not satisfy the salary basis test under 29 C.F.R. § 541.605, nor do they constitute extra payments under either subsection of 29 C.F.R. § 541.604" [id. at 28-29]. As a result of the July 26th Order's determination regarding the legality of the PPV Plan, this action has moved into the damages phase specified in the May 26th Order.
Gentiva filed its motion to amend the July 26th Order for interlocutory appeal on August 23, 2013 [Doc. No. 634, 30]. In its motion, Gentiva requests that this Court certify for interlocutory appeal the issue of whether the non-visit fees under the PPV Plan constitute an extra payment under either subsection (a) or (b) of 29 C.F.R. § 541.604 [id. at 8-10].
28 U.S.C. § 1292(b) provides that a district court may certify an order for interlocutory appeal if the following three elements are met: 1. the subject order "involves a controlling question of law;" 2. there must be a "substantial ground for difference of opinion" regarding the controlling question of law; and 3. an immediate
In its motion, Gentiva argues that this Court should certify for interlocutory appeal the following legal questions: 1. whether subsection (a) of 29 C.F.R. § 541.604 only allows "extra" compensation for hours outside an employee's normal workweek; and 2. whether a hypothetical compensation structure can be used to determine if the reasonable test under subsection (b) of 29 C.F.R. § 541.604 is satisfied. Therefore, the Court will discuss the necessity for interlocutory appeal regarding both legal questions in turn.
In the July 26th Order, the undersigned determined that the "extra" compensation articulated under subsection (a) of 29 C.F.R. § 541.604 concerns payment received in addition to an employee's pay for a normal 40 hour workweek [Doc. No. 631, 23]. Therefore, as Gentiva's non-visit fees are not designated as separate from the Clinicians' 40 hour workweek, the July 26th Order articulates that Gentiva's non-visit fees do not constitute an extra payment under subsection (a) of 29 C.F.R. § 541.604. In its motion, Gentiva concedes that "extra compensation [under subsection (a) ] may be for hours worked beyond the normal workweek" [Doc. No. 634, 14-15]. However, Gentiva also argues that compensation beyond an employee's 40 hour workweek "is not the `only' basis for paying extra compensation contemplated under [subsection (a) ]" [id. at 15]. In support of this argument, Gentiva highlights the following examples of "extra" compensation highlighted in subsection (a):
29 C.F.R. § 541.604(a). Based on this language, Gentiva asserts that "[t]he legal question presented [by the July 26th Order] is whether inclusion of the third specific example in the regulation was intended to exclude compensation for work performed during the normal workweek from the definition of extra compensation, thus destroying the exemption when extra compensation is paid for work performed during the normal workweek" [Doc. No. 634, 16-17].
As an initial matter, the undersigned recognizes that "extra" compensation for hours worked beyond the normal workweek is not the only form of additional payment contemplated by subsection (a). The examples of "commission" or "percentage
Subsection (a) of 29 C.F.R. § 541.604 clearly contemplates payment beyond an employee's compensation for his 40 hour workweek, i.e. "extra" or "additional" payment. Specifically, subsection (a) states that an employee can receive "additional compensation without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paid on a salary basis." 29 C.F.R. § 541.604(a). Based on this clear and unambiguous language, subsection (a) allows for "extra" payment only if an employee's compensation for his forty hour workweek satisfies the salary basis test. See Evenson v. Hartford Life & Annuity Ins. Co., 244 F.R.D. 666, 667 (M.D.Fla.2007) ("As a general rule of interpretation, the plain meaning of a regulation governs."). Here, Gentiva asks that the Eleventh Circuit Court of Appeals determine "whether extra compensation can be paid for hours worked during the normal workweek" [Doc. No. 634, 18]. In summary, Gentiva asserts that there is a legal question as to whether an employee can receive pay that does not satisfy the salary basis test for hours included in a normal 40 hour workweek without losing the exemption for overtime pay. However, such a payment scheme would obviously contradict and violate the clear language of subsection (a). As the undersigned articulated in the July 26th Order, "payment [for hours considered part of an employee's forty hour workweek] that does not satisfy the salary basis test would not be `extra' payment for `additional' work. Instead, such compensation would simply be improper payment for a forty hour workweek" [Doc. No. 631, 23-24]. In summary, a payment regarding the hours an employee works can obviously only be considered "extra" payment under subsection (a) if it concerns compensation beyond the hours worked in a 40 hour workweek. An employer cannot simply classify compensation for certain hours of a 40 hour workweek that do not satisfy the salary basis requirement as "extra" payment under subsection (a). Such a reading of this regulation would effectively negate an employer's duty to offer compensation for a full 40 hour workweek that satisfies the salary basis requirement articulated in 29 C.F.R. § 541.300(a)(1).
In support of its argument regarding the interpretation of subsection (a), Gentiva asserts that "any additional compensation
The examples of "commission" and "percentage of sales" articulated in subsection (a) do not dissuade the undersigned's determination. As explained in subsection (a), both of the aforementioned examples only become relevant if an employee is guaranteed "at least $455 each week paid on a salary basis." 29 C.F.R. § 541.604(a). Therefore, under subsection (a), an employee can only receive commission or percentage of sales without losing the overtime exemption if he is guaranteed payment for a 40 hour workweek that satisfies the salary basis test. As described in subsection (a), commission or percentage of sales are not forms of payment received in lieu of compensation for a 40 hour workweek that satisfies the salary basis test. In fact, commission and percentage of sales are not examples of payment for hours worked at all. Instead, commission and percentage of sales payments are forms of compensation an employee can receive in "addition" to payment that satisfies the salary basis test for hours worked.
Gentiva does not show there is a substantial ground for difference of opinion regarding the undersigned's interpretation
In the July 26th Order, the undersigned determined that Gentiva's non-visit fees do not satisfy the reasonable relationship test articulated by subsection (b) and, therefore, are not "extra" payments under said subsection [Doc. No. 631, 27-28]. In its motion for interlocutory appeal, Gentiva states that "the reasonable relationship test [under subsection (b) ] is determined by examining actual compensation" [Doc. No. 634, 22]. Gentiva further asserts that the determination articulated in the July 26th Order regarding the applicability of subsection (b) was made "by assuming and applying a factually unsupported hypothetical compensation scenario" [id. at 23]. Therefore, Gentiva maintains the issue that should be certified for interlocutory appeal is "whether in performing the mathematical analysis to determine whether the reasonable relationship test has been satisfied, the focus should be on comparing actual guaranteed compensation to actual total compensation rather than a hypothetical compensation scenario" [id.].
Subsection (b) allows an employee to receive any form of compensation without losing the overtime exemption so long as he is guaranteed at least $455 a week and his weekly compensation satisfies the "reasonable relationship" test. Anani, 788 F.Supp.2d at 65. Subsection (b) provides that "[t]he reasonable relationship test will be met if the weekly guarantee is roughly equivalent to the employee's usual earnings at the assigned hourly, daily or shift rate for the employee's normal scheduled workweek." 29 C.F.R. § 541.604(b). Again, as highlighted in the July 26th Order, Gentiva's motion for partial summary judgment simply argues that its non-visit fees constitute lawful "extras" under 29 C.F.R. § 541.604. However, this motion does not articulate whether Gentiva's non-visit fees constitute "extras" under subsection (a) or subsection (b). Beyond this deficiency, Gentiva's 65 page brief in support of its motion for partial summary judgment does not even reference the "reasonable relationship" test under subsection (b), let alone include an argument that the PPV Plan satisfies said test. Further, Gentiva's partial summary judgment motion does not articulate what amount of compensation its Clinicians are guaranteed on a weekly basis under the PPV Plan, nor does said motion articulate the Clinicians' normal amount of weekly compensation. Given these deficiencies, Gentiva's motion for partial summary judgment clearly fails to establish its non-visit fees constitute "extra" payments under subsection (b).
Rather than deny Gentiva's motion for partial summary judgment for the aforementioned deficiencies, the undersigned analyzed whether the non-visit fees constitute "extra" compensation under subsection (b) on the merits of the arguments, however flawed, presented by Gentiva. Again, Gentiva's motion does not specify the amount of compensation its Clinicians are guaranteed in a given week, nor does Gentiva' motion articulate its Clinicians' normal amount of weekly compensation. However, in responding to Plaintiffs' assertion that the PPV Plan does not guarantee
[Doc. No. 617, 25]. As noted in the July 26th Order, this argument that Clinicians do not actually need to even be guaranteed $455 a week for purposes of 29 C.F.R. § 541.604 analysis appears to concede the point that Clinicians are not guaranteed $455 a week under the PPV Plan. Further, while failing to assert the normal amount of weekly compensation its Clinicians receive under the PPV Plan, Gentiva states in its motion for partial summary judgment that "the more productive opt-in clinicians in this action were able to earn more than $150,000 per year, and one plaintiff earned over $240,000" [Doc. No. 512-1, 15]. In summary, Gentiva only provided the undersigned with the following information relevant to a determination on whether the PPV Plan's non-visit fees satisfy the reasonable relationship test: 1. Clinicians are not guaranteed $455 a week; and 2. the annual income of the "more productive" Clinicians ranges anywhere from $150,000 to $240,000.
Based on this limited data presented by Gentiva in its motion for partial summary judgment, the undersigned determined that the PPV Plan's non-visit fees do not satisfy the reasonable relationship test. Specifically, the July 26th Order states that "[t]o earn this amount of compensation [between $150,000 and $240,000] in a given year, Clinicians have to receive a weekly amount of earnings that greatly exceeds $455, let alone an undetermined amount that is less than $455" [Doc. No. 631, 27].
As a general matter, the undersigned does not believe that analysis of subsection (b) should be made pursuant to a "hypothetical" compensation scenario. The undersigned further believes there is no substantial grounds for difference of opinion regarding this point. In characterizing the undersigned's application of subsection (b) in the July 26th Order as based on a hypothetical compensation scheme, Gentiva is simply attempting to correct the errors made in its own motion for partial summary judgment.
Again, Gentiva's motion for partial summary judgment contains the following deficiencies: 1. fails to make a distinction between subsection (a) and subsection (b) in 29 C.F.R. § 541.604; 2. to the extent Gentiva argues the non-visit fees constitute "extras" under subsection (b), the motion fails to address how the Clinicians' compensation satisfies subsection (b)'s reasonable relationship test; and 3. to the extent Gentiva argues the non-visit fees constitute "extras" under subsection (b), thereby
Further, an interlocutory appeal concerning whether subsection (b) can be analyzed under a hypothetical compensation scheme devoid of an applicable basis from the record, will not materially advance the ultimate termination of this litigation. As explained supra, the undersigned's analysis was not based on a hypothetical compensation scenario but was based on material in the arguments presented by Gentiva in its motion for partial summary judgment. Therefore, a determination on whether subsection (b) can be analyzed under a hypothetical compensation scenario is irrelevant to this action. In addition, assuming arguendo that the Court of Appeals determines the undersigned's subsection (b) analysis was based on a hypothetical compensation scheme, the evidence presented by Gentiva would still fail to show that the PPV Plan satisfies the reasonable relationship test. Again, Gentiva fails to articulate the Clinicians' "guaranteed" and "usual" amounts of weekly compensation. Therefore, any argument that Gentiva's non-visit fees constitute "extra" payment under subsection (b) could be denied on this basis alone. If the Court of Appeals determines the undersigned overreached in attempting to apply the reasonable relationship test based on the sparse factual information provided by Gentiva, the undersigned's error would have been attempting to apply the reasonable relationship test at all given the deficiencies in Gentiva's motion. As a result, even if the Court of Appeals determined the undersigned used a hypothetical compensation scheme in its subsection (b) analysis, Gentiva's motion for partial summary judgment would still fail to establish its non-visit fees are "extras" under subsection (b). Therefore, the undersigned will not certify the July 26th Order's interpretation of 29 C.F.R. § 541.604(b) for interlocutory appeal.
In summary, Gentiva has not met its burden of establishing the exceptional circumstances necessary for the undersigned to certify the July 26th Order for interlocutory appeal. Accordingly, Gentiva's Motion to Amend and Certify the Court's July 26, 2013 Order for Interlocutory Appeal [Doc. No. 634] is hereby
As noted supra, this action was conditionally certified as a collective action under the FLSA on April 13, 2011. In their Joint Preliminary Report and Discovery Plan [Doc. No. 635], both parties concede that Gentiva will file a motion seeking decertification of the collective action. However, the parties do not agree on the deadline the undersigned should set for such a motion.
The undersigned acknowledges that this action's damages phase presents several
In the parties joint preliminary report and discovery plan concerning the damages phase, Gentiva states the following: "[d]uring the liability phase of this action, sufficient discovery has already been completed for purposes of decertification and the record is ripe for the determination as to whether [P]laintiffs' FLSA claims should continue to proceed as a collective action" [Doc. No. 635, 16]. As a result, the undersigned does not believe there is any reason to delay ruling on such a motion that will greatly impact the scope of this action moving forward. Accordingly, Gentiva is hereby
For the above stated reasons, Gentiva's Motion to Amend and Certify the Court's July 26, 2013 Order for Interlocutory Appeal [Doc. No. 634] is hereby
Gentiva is hereby