Shillingford v. Astra Home Care, Inc.

Citation: 293 F. Supp. 3d 401Docket: 16 Civ. 6785 (KPF)

Court: District Court, S.D. Illinois; February 22, 2018; Federal District Court

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Ella Shillingford initiated a legal action against Astra Home Care, Inc. (doing business as True Care Home Health Care), its owners Michael Werzberger and Rebecca Rosenzweig, and several unidentified individuals, claiming violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). Shillingford asserts she frequently worked 24-hour shifts as a home health care aide without receiving required breaks for sleep or meals. She contends that the Defendants misclassified these shifts as single work periods, resulting in insufficient compensation, including failure to pay overtime for hours exceeding 40 in a week and not adhering to the minimum wage standards. Additionally, she claims violations of the New York "spread of hours" requirement, the Wage Parity Act (WPA), and the Wage Theft Prevention Act (WTPA).

Shillingford is seeking conditional certification for a collective action related to her FLSA claims and class certification under the NYLL. The court has granted her motion for conditional certification but denied class certification without prejudice. Shillingford's employment with Astra spanned from June 19, 2014, to January 31, 2016, during which she alleges she was not compensated appropriately for her hours worked, often receiving payment only for 13 hours of labor despite working full 24-hour shifts, with her sleep frequently interrupted and limited meal breaks. She typically worked 4-6 shifts per week, performing not only caregiving tasks but also household chores.

Plaintiff supports her collective claims with a declaration that mirrors the allegations in her Complaint regarding her employment experiences with Defendants. She asserts that at least 40 other home health aides were similarly not paid overtime and received compensation for only 13 hours of their 24-hour shifts. Plaintiff specifically mentions one aide, Matilda, who corroborated her claim of being paid for only 13 hours without receiving five hours of uninterrupted sleep, and also reported not being compensated for working over 40 hours per week. During her deposition, Plaintiff identified two additional aides, Katy and Maranga, but only Katy's claims regarding a 24-hour shift were detailed. The Court finds that these testimonies alone do not sufficiently support Plaintiff's collective claims. More compelling are the payroll documents submitted by Plaintiff during discovery, showing various compensation categories, including "live in" pay, which reflects unusual payroll idiosyncrasies fixed in late 2015 or early 2016. The $142.09 rate is actually for a 13-hour shift. Additional pay stubs reveal that Plaintiff and at least 10 other aides received similar compensation structures, with many working live-in shifts for no more than seven hours per week for a flat fee, often at the same rate as Plaintiff.

On August 29, 2016, Plaintiff initiated the lawsuit, and Defendants responded with an Answer on October 7, 2016. On January 11, 2017, the Court partially granted Plaintiff's motion for discovery concerning her class and collective action claims, mandating Defendants to provide the names, contact information, and wage and hour data for two randomly selected home health aides from each of the six years of Plaintiff's employment, totaling twelve aides. Discovery was completed by March 30, 2017. On May 2, 2017, Plaintiff sought conditional certification of a collective action under 29 U.S.C. 216(b) and certification of several classes under Federal Rule of Civil Procedure 23. Defendants opposed this motion on June 1, 2017, and Plaintiff replied on June 15, 2017. Certain documents were filed under seal, with redacted versions available on the docket. On January 4, 2018, the Court scheduled an oral argument to address concerns regarding Plaintiff's collective claims, which took place on January 12, 2018, benefiting from strong advocacy from both parties.

Collective certification under the Fair Labor Standards Act (FLSA), specifically 29 U.S.C. 216(b), allows employees to bring wage and hour claims collectively without needing to meet the typical class action requirements of numerosity, typicality, commonality, or representativeness. The Second Circuit follows a two-step process for certifying collective actions. Initially, courts assess whether to notify potential opt-in plaintiffs who may be similarly situated regarding the alleged FLSA violation. Subsequently, if it is determined that the opt-in plaintiffs are not similarly situated, the collective action can be de-certified.

To achieve conditional certification, plaintiffs must demonstrate a modest factual showing that they and potential opt-in plaintiffs experienced a common policy or plan violating the FLSA, which can be supported by a single plaintiff's affidavit. However, this showing must be substantive and cannot rely solely on conclusory allegations. The court must identify a factual nexus binding the named plaintiffs and potential class members as victims of a specific practice, without resolving factual disputes or making credibility determinations at this preliminary stage.

Class certification under Federal Rule of Civil Procedure 23 requires a district judge to ensure that all Rule 23 criteria are satisfied. The criteria include: (i) numerosity, where the class is sufficiently large that joining all members is impractical; (ii) commonality, with shared legal or factual questions among class members; (iii) typicality, where the claims of representative parties are representative of the class; and (iv) adequacy, ensuring representatives can protect class interests. If these requirements are met, plaintiffs must also show that the class fits within one of the categories under Rule 23(b). Specifically, for Rule 23(b)(3), the common questions must predominate over individual ones, and a class action must be the superior method for resolving the dispute. Plaintiffs bear the burden of proving these requirements by a preponderance of the evidence, which involves presenting sufficient evidence for the court's satisfaction. Additionally, courts can make factual findings relevant to Rule 23 criteria but such findings are not binding on the trier of facts during the merits phase.

In the context of a motion for conditional certification under the Fair Labor Standards Act (FLSA), the plaintiff alleges violations regarding minimum wage and overtime pay. The proposed collective action includes all current and former home health aides employed by the defendants since August 29, 2013, who allegedly did not receive proper compensation. However, the court indicated that broad certification for "all current and former home health aides" is excessive. Instead, the court conditionally certifies a narrower class of home health aides who primarily worked live-in shifts after January 1, 2015, and who did not receive adequate overtime compensation.

The FLSA's companionship exemption prior to January 1, 2015, allowed individuals employed in domestic service to provide companionship services to be exempt from FLSA regulations unless they spent over 20% of their time on general household work. The Department of Labor's October 1, 2013, amendment narrowed this exemption, excluding aides employed by third-party agencies, which included those working for Astra, and made them subject to FLSA requirements starting January 1, 2015. The Court confirmed that collective action under the FLSA could only be certified for claims arising after this date. 

The Plaintiff established that she is similarly situated to other aides at Astra who worked 24-hour live-in shifts and were not compensated for overtime, as required by the FLSA. Under FLSA regulations, employers can only deduct specific meal and sleep periods from compensable hours if certain conditions are met. Evidence presented shows that the Plaintiff and other aides received pay stubs indicating each 24-hour shift was billed as one hour, indicating they were not properly compensated for their time, despite claims of having received adequate sleep and meal breaks.

Two examples illustrate potential underpayment issues under the Fair Labor Standards Act (FLSA). First, Plaintiff’s pay stub for June 13-19, 2015, indicates she was paid for four live-in shifts at $142.09 each. Assuming she received an eight-hour sleep break and one-hour meal breaks, 11 hours can be deducted from each 24-hour shift, resulting in 52 compensable hours. Based on a pay rate of $10.00 per hour for the first 40 hours and $15.00 for the subsequent 12 hours, Plaintiff should have received $580 in gross pay but only received $568.36. Second, aide E.C.’s pay stub for the period ending May 22, 2015, also reflects compensation for six live-in shifts at the same rate. After deductions for breaks, E.C. would be entitled to $970.00 but was paid only $852.54. Both cases suggest a common policy of underpaying overtime, despite aides often not receiving breaks as required by the FLSA. 

However, evidence shows significant variability in aides' work schedules, with approximately 85% not working live-in shifts. Given that Plaintiff's claims focus on overnight shift compensation, the Court finds insufficient similarity between her situation and those of aides who did not primarily work live-in shifts. This reasoning aligns with various precedents that emphasize the necessity of demonstrating similarity among employees in a collective action.

The Court restricts the collective action to home health aides who worked live-in shifts for at least 50% of their weeks on Astra's payroll. Defendants' arguments against conditional certification lack merit, as they do not contest evidence of unpaid overtime, even if breaks were deducted. They claim the Plaintiff has not shown she never received breaks, although she alleges her sleep was frequently interrupted and she generally ate while working. Defendants further assert that the Plaintiff did not work over 40 hours per week by late 2015, arguing this disqualifies her from overtime claims. However, the evidence indicates she may have been entitled to overtime at one point and is similarly situated to other aides denied overtime. Defendants argue that the Plaintiff lacks detailed corroboration from other aides, but her burden is minimal at this stage, and she has sufficiently met it for conditional certification. The Court conditionally certifies a collective action for those who worked for Astra since January 1, 2015, under similar conditions and were not paid adequate overtime.

Regarding the FLSA minimum wage claim, the Plaintiff has not adequately demonstrated a common policy violating the minimum wage provision, as her submissions primarily focus on overtime claims. Although she requests certification for all current and former non-exempt home health aides not paid minimum wages, her evidence and payroll records do not support this claim. For example, her pay stub from June 2015 shows she earned an average of $10.93 per hour, significantly above the federal minimum wage of $7.25. Nonetheless, during oral arguments, Plaintiff's counsel suggested that due to insufficient meal breaks and sleep, Astra should compensate her for the full 24 hours, which would imply her effective wage drops to $5.92 per hour, potentially violating minimum wage laws.

The Court credits the Plaintiff's allegation regarding herself and an aide who also did not receive five uninterrupted hours of sleep. Under federal regulation (29 C.F.R. 785.22), if neither received the required sleep, Astra must compensate all eight hours of unpaid sleep as work time. This would entitle the Plaintiff to 21 hours of compensation, resulting in an average pay of $6.77 per hour, which is below the federal minimum wage. While the Court expresses skepticism about the strength of the evidence based solely on the Plaintiff's declaration and deposition, it concludes that she has sufficiently demonstrated that she and other aides on live-in shifts were subjected to a common policy violating the Fair Labor Standards Act (FLSA) minimum wage provisions. Consequently, the Court conditionally certifies a collective action for home health care aides employed by Astra since January 1, 2015, who worked live-in shifts for at least half of their weeks and were not paid minimum wage.

Regarding the Plaintiff's motion for class certification under the New York Labor Law (NYLL), five classes are proposed for home health aides who were allegedly not paid minimum wages, overtime compensation, wages under the Wage Payment Act (WPA), "spread of hours" premiums, or proper notices under the Wage Theft Prevention Act (WTPA). The Court notes limited evidence for the last three proposed classes and denies their certification without prejudice, while allowing consideration of classes for aides not paid overtime or minimum wages under the NYLL. A recent split between state and federal courts in New York concerning the treatment of bona fide sleep and meal breaks under the NYLL is acknowledged. The NYLL mandates a minimum wage of $13 per hour for large employers as of December 31, 2017, and outlines that a residential employee is not considered on duty during normal sleeping hours unless they are required to remain available to work. Additionally, overtime pay requirements depend on FLSA coverage, with different rates specified for those covered versus those exempt.

Overtime regulations in New York differentiate between "residential" and "non-residential" employees. Residential employees qualify for overtime after 44 hours in a workweek, while non-residential employees qualify after 40 hours. The New York Department of Labor (NYDOL) aligns its minimum wage regulations with the Fair Labor Standards Act (FLSA) regarding sleep and meal breaks for live-in employees. In a 2010 inquiry, the NYDOL clarified that for home health care aides living on-site, determining work hours hinges on whether employees are "on call" (required to stay at the workplace) versus "subject to call" (allowed to leave). Residential employees are not considered working during sleep hours or when free to leave. The NYDOL mandates that live-in employees must be compensated for at least 13 hours within a 24-hour period, given they receive 8 hours for sleep and 3 hours for meals, along with 5 hours of uninterrupted sleep.

Despite this guidance, New York courts have shown skepticism towards the NYDOL's interpretations. The initial court to address the NYDOL's opinion deemed it "ambiguous," allowing claims for unpaid wages under the New York Labor Law (NYLL). Conversely, a federal court later upheld the NYDOL's views, permitting deductions for sleep and meal breaks, and denied class certification for minimum wage violations based on the NYDOL's interpretation. Following this, New York courts have consistently found the NYDOL's opinion inconsistent with the minimum wage regulation text, leading to reversals of trial court decisions that deferred to the NYDOL's interpretation. No trial court ruling favoring the NYDOL's stance on minimum wage has been upheld on appeal.

State courts in New York have determined that the NYDOL's 2010 interpretive guidance is unreasonable and not deserving of deference, as it conflicts with the clear meaning of regulations regarding employment classifications. In the case of Lai Chan, the Supreme Court of New York County concluded that home health aides, who do not reside with their employers, are not covered by the NYDOL’s guidance applicable only to residential employees. This decision was supported by the First Department in Tokhtaman, which criticized the DOL opinion for failing to differentiate between 'residential' and 'nonresidential' employees. The Tokhtaman court ruled that if a plaintiff could demonstrate non-residential status, they could recover unpaid wages for hours worked beyond 13 hours a day, leading to a denial of the defendants' motion to dismiss.

The same reasoning was affirmed in the Moreno and Andryeyeva II cases by the Second Department. They emphasized that non-residential employees should receive minimum wage for all hours worked, regardless of meal and sleep opportunities, due to the NYDOL's lack of distinction in its opinion letter. Conversely, federal courts have continued to defer to the NYDOL's interpretation. In Bonn-Wittingham, Judge Ross noted that she was not bound by the First Department's ruling and believed the New York Court of Appeals would likely not adopt it. She upheld the NYDOL's view that home health aides could be classified as "live-in" employees, allowing deductions for sleep and meal breaks.

Similarly, in Rodriguez de Carrasco, Judge Forrest concurred with Judge Ross, emphasizing the NYDOL's entitlement to deference. This position was further strengthened by an emergency regulation issued by the NYDOL on October 6, 2017, addressing the conflict arising from state court decisions. The amendment clarified that minimum wage need not be paid for meal and sleep periods excluded from hours worked under federal law for home care aides on 24-hour shifts, aiming to maintain the home care industry and prevent institutionalization of patients. The court reviewed relevant state and federal cases during oral arguments.

Plaintiff contended that the divergence between state and federal court interpretations of compensable hours under the New York Labor Law (NYLL) fostered forum-shopping and that federal courts had improperly disregarded state law. In contrast, Defendants asserted that state rulings were erroneous and that federal courts rightly deferred to the New York Department of Labor (NYDOL). However, Plaintiff conceded that the NYDOL's emergency regulation invalidated the reasoning of the Tokhtaman case, allowing Astra to deduct sleep and meal breaks from compensable hours as of October 6, 2017. The Court must determine whether Astra could deduct 11 hours of break time from a 24-hour shift under NYLL prior to that date. Federal courts are required to respect lower state court decisions when state law is unclear and the highest state court has not provided guidance. The New York Court of Appeals has rarely addressed the minimum wage aspect of the NYLL, and its deference to agency interpretations has been previously established. The Court found the NYDOL's 2010 guidance to be seemingly reasonable and expressed concern about a narrow interpretation of "available for work" that could render the term meaningless.

The Court acknowledges concerns raised by state courts regarding the New York Department of Labor's (NYDOL) interpretation, which conflates residential and non-residential employees by applying the same standards to both, despite only residential employees being eligible for sleep and meal break deductions. This interpretation potentially renders the term "residential" meaningless. The Court emphasizes its role is not to take sides but to anticipate how the Court of Appeals would rule on this matter. It finds the reasoning in Barenboim v. Starbucks Corporation relevant, where the Court of Appeals addressed the NYLL 196-d tip-sharing provision and concluded that the NYDOL's interpretation should limit tip-sharing to employees engaged in direct customer service. The NYDOL's guidelines were recognized as a unified clarification of previous policies. Additionally, the Court cites Samiento v. World Yacht Inc., where the Court of Appeals reversed a decision based on a NYDOL opinion letter requiring employers to pass mandatory gratuities to employees. These cases highlight the Court of Appeals' tendency to defer to state agency interpretations. Consequently, the Court concludes it would not support the Appellate Division's reasoning in related cases and would instead adhere to the NYDOL's established interpretation allowing home health care aides to have 11 hours deducted from a 24-hour shift, provided specific conditions regarding sleep and breaks are met.

Astra is allowed to deduct sleep and meal breaks under New York law, provided the aides take these breaks. The Court does not need to discuss Rule 23(a) requirements further, as it finds that common issues of law and fact do not predominate over individual questions, nor is a class action superior for this case under Rule 23(b)(3). Evidence suggests Astra may have violated the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), but the standard for conditional certification under the FLSA is less stringent than that for class certification under Rule 23. A motion under § 216(b) of the FLSA allows for collective action with opt-in participation, while Rule 23 requires a rigorous analysis of numerosity, typicality, commonality, and representativeness. The Court emphasizes that the determination of whether plaintiffs are similarly situated will occur later, and that the initial stage of FLSA certification does not require the same detailed scrutiny as Rule 23. To prove liability under the NYLL, plaintiffs must demonstrate they worked more than 40 or 44 hours per week without proper compensation, which hinges on whether they are classified as residential or non-residential employees.

Liability determination under New York Labor Law (NYLL) hinges on the number and duration of breaks received by aides, which remains unclear from the current documentation. To prove liability for minimum wage violations, plaintiffs must demonstrate their effective hourly wage fell below the minimum wage. The court disagrees with the plaintiffs' argument that liability can solely be established through pay stubs, citing insufficient evidence regarding the employment conditions of overnight aides. The court cannot conclude that liability can be established through generalized proof or that individualized inquiries are less significant than class-wide issues. As a result, the court grants the plaintiff's motion for conditional certification of a collective action under the Fair Labor Standards Act (FLSA) but denies without prejudice the motions for class certification for various NYLL violations and the Wage Theft Prevention Act (WTPA). The case will advance to discovery focused on the plaintiff’s FLSA claims, with the option to renew the motion if more substantial evidence emerges. The parties are instructed to confer and submit a proposed notice for potential opt-in members within specified time frames. The court relies on the plaintiff's factual account at this stage due to the modest burden required for conditional certification. The court acknowledges the defendants' contrary facts but favors the plaintiff's position, given the motion's context. Additionally, the pay stubs for comparators differ in format and compensation designations, as confirmed by the payroll director, highlighting distinctions in compensation coding for shifts.

The Fair Labor Standards Act (FLSA) does not require class certification, but such orders are commonly referred to as 'certifying a class.' The court addresses the time frame for the overtime collective action, noting that Astra changed its payroll practices regarding live-in shifts starting in late 2015 or early 2016, now recording them as 13-hour shifts instead of one hour. During oral arguments, Astra’s counsel claimed that payroll records disproved the allegations of improper overtime payments, while Yehuda Schneider, Astra's payroll director, confirmed that overtime was paid for live-in shifts starting in late 2015. However, the court is hesitant to address the merits of this issue, stating that the evidence presented does not justify an end date for the collective action period. The court believes that the plaintiff has sufficiently demonstrated a common policy of underpaying overtime for live-in shifts from January 1, 2015, to the present. Additionally, a regulation published in the New York State Register on October 25, 2017, became effective on October 6, 2017, and was renewed by the NYDOL on January 5, 2018.