Littell v. Diversified Clinical Servs., Inc.

DENNIS LITTELL, Plaintiff,

v. DIVERSIFIED CLINICAL SERVICES,INC. and REX HOSPITAL, INC., Defendants.

1:10CV152

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

May 10, 2013

MEMORANDUM OPINION, ORDER AND RECOMMENDATION

OF UNITED STATES MAGISTRATE JUDGE

This action comes before the undersigned United States Magistrate Judge for a recommended ruling on Defendant Rex Hospital Inc.'s ("Rex's") Motion to Dismiss (Docket Entry 13). For the reasons that follow, the Court should grant Rex's instant Motion in that the Court should dismiss Plaintiff's first and second claims for relief against Rex and Plaintiff's third claim for relief against both Diversified Clinical Services, Inc. ("DCS") and Rex.

BACKGROUND

According to the Complaint, DCS "operates over 300 wound care facilities in conjunction with hospitals throughout the United States." (Docket Entry 8, ¶ 4.) The Complaint alleges that Plaintiff began working for DCS in September of 2006 at St. Luke Hospital in Fort Thomas, Kentucky. (Id., ¶ 6.) On September 1, 2007, after a request by Plaintiff, DCS allegedly transferred Plaintiff to the Raleigh, North Carolina, area where he began working "as the Program Director for [] DCS's operations in conjunction with [] Rex's facilities." (Id., ¶ 9.)

The Complaint alleges that Rex employee Diana Statler "made the decision to hire [P]laintiff [] for the [D]efendants' jointly run facility." (Id., ¶ 8.) Allegedly, "Defendants held [P]laintiff [] out to the public as an employee of [] Rex." (Id., ¶ 13.) Further, according to the Complaint, "[a]lthough normally [Plaintiff] reported to [] DCS regional vice president Belinda Blair, [] Rex employee Statler was [P]laintiff's de facto supervisor." (Id.) In support of this assertion, the Complaint alleges: that Statler "required [Plaintiff's] attendance at her supervisory meetings as 'one of her managers'[; that] [r]eports of various kinds - including internal DCS reports - were required to be sent to [] Statler[; and that] Statler assigned public relations and marketing staff to accompany [P]laintiff [] in order to report on his conduct and manage his work." (Id.) In sum, according to the Complaint, "Statler directed [P]laitiff['s] work and controlled his activities." (Id.)

Next, the Complaint asserts that, in March 2008, Plaintiff's physician diagnosed Plaintiff with spinal stenosis and referred Plaintiff to a neurosurgeon to evaluate surgical options. (Id., ¶ 16.) Plaintiff allegedly "informed his supervisors, Belinda Blair of [] DCS and Diana Statler of [] Rex, of his diagnosis and that he would probably be requiring back surgery in the near future and would be out for an extended period of time." (Id., ¶ 17.) According to the Complaint, at that time, "[b]oth Blair and Statler told [P]laintiff [] not to worry, that everything would be fine, and that they would make all necessary arrangements in regard tohis leave." (Id., ¶ 18.) However, the Complaint also alleges that, "[i]n March 2008 and at all relevant times, [] DCS informed all of its employees, including [Plaintiff], that they were not eligible for any protections under the Family [and] Medical Leave Act . . . (hereinafter, 'FMLA') , and that no DCS employees had coverage under the FMLA." (Id., ¶ 19.)

The Complaint asserts that Plaintiff "was scheduled for surgery . . . on April 16, 2008, and he [again] advised both Blair and Statler that he would need to take leave for the surgery, recuperation, and rehabilitation at that time." (Id., ¶ 20.) However, "[o]n April 11, 2008, [P]laintiff [allegedly] received a phone call from [] Blair [at which time] [s]he informed [P]laintiff that she had received a call from [] Statler, and that Statler and Rex 'wanted [Plaintiff] gone.'" (Id., ¶ 21.) The Complaint alleges that "Blair gave [P]laintiff the option to resign and be paid through April 30, 2008, or to be terminated effective April 11, 2008." (Id.) According to the Complaint, "[u]nder duress, [P]laintiff [] resigned." (Id., ¶ 22.)

As a result of the foregoing, the Complaint asserts claims against DCS and Rex for "FMLA Violations" (id., ¶¶ 23-36); "Equitable Relief under FMLA" (id., ¶¶ 37-43); and "Wrongful Discharge in Violation of Public Policy" (id., ¶¶ 44-53). Rex moves the Court to dismiss all of Plaintiff's claims against it pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (See Docket Entry13 at 1.) Plaintiff responded (Docket Entry 18) and Rex replied (Docket Entry 21).

DISCUSSION

A complaint fails to state a claim if it does not "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (emphasis added). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of "entitlement to relief."'" Id. (quoting Twombly, 550 U.S. at 557). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. In other words, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.¹

To the extent the Court must draw conclusions about matters of North Carolina law in evaluating the instant Motion, "the highest court of the state is the final arbiter of what is state law. When it has spoken, its pronouncement is to be accepted by federal courts as defining state law unless it has later given clear andpersuasive indication that its pronouncement will be modified, limited or restricted." West v. American Tel. & Tel. Co., 311 U.S. 223, 236 (1940). However, "[a] state is not without law save as its highest court has declared it. There are many rules of decision commonly accepted and acted upon by the bar and inferior courts which are nevertheless laws of the state although the highest court of the state has never passed upon them." Id.

Accordingly, "it is the duty of [a federal court facing a question of state law] to ascertain from all the available data what the state law is and apply it . . . ." Id. at 237. "Where an intermediate appellate state court rests its considered judgment upon the rule of law which it announces, that is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise." Id.

A. Plaintiff's FMLA Claims

The FMLA makes it "unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided for" under the FMLA. 29 U.S.C. § 2615(a)(1). Here, Plaintiff alleges that "DCS and Rex unlawfully interfered with, restrained, and/or denied [his] exercise, or attempt to exercise his rights under the FMLA . . . by improperly indicating that they were not covered employers and that [he] had no FMLA rights" and by "terminating [his] employment." (Docket Entry 8, ¶¶ 30, 31.) To state an interference claim under the FMLA, Plaintiff must allege: (1) that he was an "eligible employee" underthe FMLA; (2) that his employer was covered under the FMLA; (3) that he was entitled to FMLA leave; (4) that he gave his employer adequate notice of his intention to take leave; and (5) that his employer denied him benefits to which he was entitled. See King v. Blanchard Mach. Co., No. 3:10-3219-MBS-PJG, 2012 WL 4586538, at *3 (D.S.C. Aug. 20, 2012) (unpublished) (citing Edgar v. JAC Prods., Inc., 443 F.3d 501, 507 (6th Cir. 2006), and Rodriguez v. Smithfield Packing Co., Inc., 545 F. Supp. 2d 508, 516 (D. Md. 2008)).

Rex contends that the Court should dismiss Plaintiff's FMLA claims against it because Plaintiff "has not alleged sufficient facts to establish that he is an 'eligible employee' of Rex under the [FMLA] . . ., and instead alleges facts that demonstrate that he is not an eligible employee of Rex." (Docket Entry 14 at 1.) Specifically, Rex argues that, because an "eligible employee" must have been employed "for at least 12 months by the employer with respect to whom leave is requested" and "for at least 1,250 hours of service with such employer during the previous 12-month period," 29 U.S.C. § 2611(2)(A) (emphasis added), and the Complaint alleges that Rex only employed Plaintiff for seven months (see Docket Entry 8, ¶¶ 9, 21, 22), the Court should dismiss Plaintiff's FMLA claims against Rex. (See Docket Entry 14 at 4-6.) In response, Plaintiff argues that, because Plaintiff qualifies as an "eligible employee" as to DCS, and because Rex both meets the FMLA's definition of a covered "employer" and constitutes a joint employer with DCS, the FMLA applies against Rex regardless of whether Plaintiff qualifiesas an "eligible employee" as to Rex. (See Docket Entry 18 at 6-12.)² In other words, Plaintiff contends that, "once an employer is covered [under the FMLA], it must comply with non-interference an [sic] anti-retaliation provisions of the [FMLA], regardless of whether an employee qualifies as 'eligible' vis-a-vis a particular employing entity." (Docket Entry 18 at 7.)

In support of his position, Plaintiff highlights that, under the Regulations promulgated by the Department of Labor with respect to the FMLA, "[a] secondary employer is [] responsible for compliance with the prohibited acts provisions [of the FMLA] with respect to its jointly employed employees, whether or not the secondary employer is covered by FMLA." 29 C.F.R. § 825.106(e) (emphasis added).³ That provision, however, on its face, only addresses whether the employer meets the applicable FMLA definition of that term - which is "any person engaged in commerce or in any industry affecting commerce who employs 50 or more employees foreach...