Morgan v. Guardian Angel Home Care, Inc.

CORY MORGAN, Plaintiff, v. GUARDIAN ANGEL HOME CARE, INC. Defendant.

Case No. 14 C 10284

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

March 30, 2018

Judge Joan H. Lefkow

OPINION AND ORDER

In her second amended complaint (dkt. 33), Cory Morgan alleges that Guardian Angel Home Care, Inc. failed to provide her overtime compensation in violation of the Fair Labor Standards Act (FLSA), 29 U.S.C.§ 201 et seq. (count 1), and the Illinois Minimum Wage Law (IMWL), 820 Ill. Stat. Ann. Comp. § 105/1 et seq. (count 2); breached a January 2011 employment contract (count 3); breached a November 2012 employment contract (count 4); and, with regard to both alleged breaches, violated the Illinois Wage Payment and Collection Act (IWPCA), 820 Ill. Stat. Ann. Comp. § 115/3 et seq. (count 5). Before the court is Guardian Angel's motion for summary judgment on all counts. For the reasons stated below, the motion is granted in part and denied in part.¹

BACKGROUND²

Guardian Angel employs nurses to conduct home visits with patients. Cory Morgan is a registered nurse who worked for Guardian Angel. She had numerous duties, including, among others, rendering treatment to patients, reconciling medication with patients, documenting patient information in medical records, and coordinating with office staff, physicians, and patients' family members. Morgan began working for Guardian Angel in October 2010. At that time, she was paid a flat rate per patient visit, and the rate would vary depending on the type of patient visit (i.e., start of care visit, discharge visit, etc.). On January 5, 2011, Morgan signed an offer letter (January 2011 offer letter) to begin working as a full-time registered nurse on January 31, 2011. She would receive a salary of $71,000 and would earn additional compensation in the form of a flat rate for each patient visit performed in excess of 31 visits per week (excess visit). Again, the flat rate varied depending on the categorization of the visit (e.g., a regular visit would pay $50, while a discharge visit would pay $55).

Morgan recorded each patient visit in a system called Homecare Homebase. She accessed this online system using a tablet provided by Guardian Angel; there were sometimes technological problems that required pausing the program as well as Wi-Fi connectivity issues. Homecare Homebase records do not show any excess visits between January 31, 2011, and September 28, 2012. Morgan, however, also documented patient visits for 2011 and 2012 inpersonal planners, and she recorded excess visits the week of March 21-27, 2011, and September 12-18, 2011. She was not paid for any excess visits on the paychecks corresponding to those dates.

In July 2012, Guardian Angel informed Morgan that she had been overpaid in the amount of $9,775. According to Guardian Angel, it had been paying additional compensation for visits in excess of 30 per bi-weekly pay period as opposed to per week as stated in the January 2011 offer letter. Guardian Angel prepared a spreadsheet explaining the miscalculation. The spreadsheet also showed that Morgan completed 13 excess visits between March and May 2012 (in contrast to the Homecare Homebase records). Guardian Angel and Morgan signed an agreement to deduct 15% from each paycheck until the overpayment was recouped.

Morgan returned to a flat rate pay basis on September 28, 2012. On November 8 of that year, she was presented with another offer letter (November 2012 offer letter) for a full-time position with a salary of $71,000 plus $40 for each patient visit over 100 in two bi-weekly pay periods. During her time working under the November 2012 offer letter, Morgan never conducted more than 100 visits in two bi-weekly pay periods. On May 21, 2013, Morgan began working on a part-time per diem basis. She resigned from Guardian Angel on August 2, 2013.

LEGAL STANDARD

Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). To determine whether a genuine fact issue exists, the court must pierce the pleadings and assess the proof as presented in depositions, answers tointerrogatories, admissions, and affidavits that are part of the record. Fed. R. Civ. P. 56(c). In doing so, the court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 378, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007). The court may not weigh conflicting evidence or make credibility determinations. Omnicare, 629 F.3d at 704.

The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In response, the non-moving party cannot rest on bare pleadings alone but must designate specific material facts showing that there is a genuine issue for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000). If a claim or defense is factually unsupported, it should be disposed of on summary judgment. Celotex, 477 U.S. at 323-24.

ANALYSIS

I. Violation of the FLSA (count 1)

Morgan alleges that Guardian Angel violated the FLSA by failing to provide her overtime pay. Guardian Angel counters that Morgan was exempt from the FLSA. "Under the FLSA, employees are entitled to overtime pay for any hours worked over forty hours per week, unless they fall within a certain exemption set forth by the FLSA." Blanchar v. Standard Ins. Co., 736 F.3d 753, 756 (7th Cir. 2013) (citing 29 U.S.C. §§ 207, 213.). "One such exemption includes employees who are employed in a 'bona fide executive, administrative, or professional capacity.'" Id. (citing 29 U.S.C. § 213(a)(1)). "Congress delegated to the Secretary of Labor the authority to define the scope of this section and the exemptions."³ Piscione v. Ernst & Young,L.L.P., 171 F.3d 527, 533 (7th Cir. 1999), overruled on other grounds by Hill v. Tangherlini, 724 F.3d 965 (7th Cir. 2013). "The burden is on the employer to establish that an employee is covered by a FLSA exemption." Blanchar, 736 F.3d at 756. "Because the FLSA is a remedial act, exemptions from its coverage are narrowly construed against employers." Johnson v. Hix Wrecker Serv., Inc., 651 F.3d 658, 660 (7th Cir. 2011).

For purposes here, the professional employee exemption applies to employees

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week . . . exclusive of board, lodging, or other facilities; and

(2) Whose primary duty is the performance of work:

(i) Requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction[.]

29 C.F.R. § 541.300(a)(1-2). Guardian Angel argues that Morgan was employed in a professional capacity during the time at issue,⁴ and therefore is exempt from the FLSA.

A. Morgan Was Paid on a Salary Basis

Generally, "[a]n employee will be considered to be paid on a 'salary basis' . . . if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed." 29 C.F.R. § 541.602(a). There is no question that Morgan was paid $71,000 annually, which meets the $455weekly threshold. Morgan instead argues, somewhat confusingly and without legal support,⁵ that the pay structure including the additional compensation paid for excess weekly visits was impermissible as it existed solely "for the purpose of circumventing overtime requirements." (Dkt. 78 at 9.) She seems to argue that she was not paid on a salary basis because Guardian Angel "deducted 15% of [her] pay from each paycheck, claiming that [she] had not performed the quantity of work that was originally thought." (Id. at 10.) This is not correct, however, as the reduction Guardian Angel made (and Morgan agreed to) was a result of an inadvertent overpayment not based on the number of patient visits Morgan conducted, but rather the time periods during which she conducted them.

Morgan then argues that, even if she was paid on a salary basis, the flat payment for each excess visit is subject to (and fails) a "fee basis" analysis. She attempts to tie Guardian Angel's payment schedule for excess visits to the length of time a particular visit would take, i.e., the longer the visit, the greater the pay. Therefore, according to Morgan, the payments are tied impermissibly to the number of hours worked. The court assumes she bases her argument on 29 C.F.R. § 541.605, which states "[p]ayments based on the number of hours or days worked and not on the accomplishment of a given single task are not considered payments on a fee basis." Her interpretation is incorrect. The fee basis analysis is not involved where a salary basis has been established. See 29 C.F.R. § 541.300(a)(1) (stating that the professional employee exemption applies to an employee "[c]ompensated on a salary or fee basis") (emphasis added). More importantly, the additional payments are permitted under 29 U.S.C. § 541.604(a):

An employer may provide an exempt employee with additional compensation without . . . violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paidon a salary basis. . . . Such additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis), and may include

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