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Gordon v. Maxim Healthcare Services, Inc.

United States District Court, E.D. Pennsylvania

July 21, 2017



          R. BARCLAY SURRICK, J.

         Presently before the Court are Plaintiff's Motion for Certification (ECF No. 73); Defendant's Motion to De-certify Conditionally Certified Collective Action Class (ECF No. 100); and Defendant's Motion for Summary Judgment (ECF No. 104). For the following reasons, Plaintiff's Motion for Certification will be denied, Defendant's Motion to De-certify Conditionally Certified Collective Action will be granted, and Defendant's Motion for Summary Judgment will be granted.

         I. BACKGROUND

         This is a purported class action brought under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and the Pennsylvania Wage Payment and Collection Law (“WPCL”), 43 Pa. Cons. Stat. Ann. § 260.1, et seq. Plaintiff Markisha Gordon brings claims on behalf of herself and others similarly situated against her former employer, Defendant Maxim Healthcare Services, Inc. Plaintiff alleges that Maxim failed to timely pay her and other home healthcare aides for hours worked. In December 2014, Judge Harvey Bartle, III granted Plaintiff's motion to conditionally certify the collective class under Section 216 of the FLSA to include all home healthcare aides employed by Maxim in Pennsylvania who were paid beyond scheduled pay dates that fell on or after April 10, 2011. The case was reassigned to this Court on July 15, 2015. (ECF No. 74.) As set forth below, the conditional collective class will be decertified, Plaintiff's motion to certify a class under the WPCL will be denied, and Defendant's motion for summary judgment will be granted.

         A. Factual Background

         Plaintiff Gordon worked as a Home Health Aid for Maxim from October 2010 until July 2012. (Gordon Dep. 18, 36, Pl.'s Class Cert. Reply Ex. L.; Am. Compl ¶ 13; Gordon Decl. ¶ 4, Pl.'s Class Cert Mot Ex. 1.) In this role, she cared for individuals at their homes and was paid an hourly rate for her time. (Gordon Dep. 54, 60.) Plaintiff was based in the Northeast Philadelphia Maxim branch, which is sometimes called the Trevose office. (Gordon Dep. 84.)

         Defendant Maxim is a national staffing company that provides recruiting, staffing, and healthcare services to a variety of clients and industries. (Smith Decl. ¶ 2, Def.'s Sum. J. Mot. Ex. A.) The Homecare Division places nurses and other healthcare professionals in individual client homecare settings. (Id. ¶ 3.) Maxim's “external employees” provide care to clients outside of the office setting and almost exclusively in the homes and facilities of the clients. (Id. ¶ 6.) Certain external employees provide trained medical care, such as licensed nurses, and other external employees, such as Home Health Aids, provide nonmedical services. (Id.)

         During the relevant class period, Maxim employed approximately 12, 898 external employees in Pennsylvania. (Id.) These employees reported to over 180 different supervisors in fourteen separate Maxim Offices located throughout the state. (Id. ¶ 5.)

         External employees keep track of their time worked by using “weekly notes” or “time sheets.” (Smith Decl. ¶ 9.) The Employee Handbook states that employees must record all regular and overtime hours worked, and that time sheets must be signed by the client or an authorized person at the client site. (Employee Handbook 19.) A weekly note or time sheet permits an external employee to record the precise times that they begin and end working each day, and the exact services that they provided to the client. (Smith Decl. ¶ 9; Def.'s Class Cert. Resp. Ex. 4.) Sharon Smith, who served as Maxim's Human Resources Business Partner for the Northeast Region, stated that Maxim's timesheets are the only way that the company knows when external employees actually work, since those employees work remotely. (Smith Decl. ¶ 9.) Smith stated that the timesheets also serve to ensure that external employees are providing the appropriate services in accordance with the client's plan of care. (Id.) The Handbook indicates that some local offices have “implemented their own systems for recording the work hours of Maxim staff” and that employees must adhere to the system set up by their local office. (Id.) The Handbook is silent with respect to how external employees are supposed to report their time to their Maxim office. (Id.; see also Smith Dep. 17 (noting that there is no policy for how Maxim employees report time to their individual offices).) Gordon alleges that Maxim's lack of any policy regarding the reporting of time has caused her and other class plaintiffs to suffer damages.

         Maxim's Employee Handbook states that employees will be “paid weekly on Friday for all hours worked during the preceding week.” (Employee Handbook, Pl.'s Class Cert. Mot. Ex. 13.)[1] The payroll week begins on any given Sunday at 7:00 AM and ends the following Sunday at 6:59 AM. (Id.)

         There is no uniform way by which external employees such as home health aides report their time to their Maxim home office. Gordon claims she was only permitted to hand-deliver her time sheet to the Trevose office, and she presumed that other offices maintained similar requirements. The evidence reveals that each office employed different practices with respect to time reporting, and many offices permitted reporting by various methods. For example, some offices permitted employees to submit their time sheets using a 24-hour drop box. (See Moore Dep. 46-47, Def.'s Class Cert Resp. Ex. 20; Cruz Dep. 88, Def.'s Class Cert Resp. Ex. 21; Watson Dep. 105, Def.'s Class Cert Resp. Ex. 27.) Some offices allowed relatives or friends of the external employee to drop off the time sheet to the employee's home office. (See Moore Dep. 36-37; Sall Dep. 120, Def.'s Class Cert Resp. Ex. 29; Reiter Decl. ¶¶ 5, 7, Def.'s Class Cert Resp. Ex. 22.) Some Maxim offices permitted external employees to mail in their time sheets using a prepaid envelope provided by Maxim. (See Moore Dep. 36; Cruz Dep. 88; Sall Dep. 66; Watson Dep. 105; Arelt Dep. 62-63, Def.'s Class Cert Resp. Ex. 5.) Some external employees were permitted to fax or e-mail their timesheets to the office. (See Moore Dep. 35, 40; Arelt Dep. 62-63; Pompe Decl. ¶ 5, Def.'s Class Cert Resp. Ex. 31; Barach Decl. ¶ 5, Def.'s Class Cert Resp. Ex. 31.) Some employees were permitted to report their time over the telephone or through text message. (See Howell Decl. ¶¶ 7-8, Def.'s Class Cert Resp. Ex. 30; Soldavini Decl. ¶¶ 8, 10, Def.'s Class Cert Resp. Ex. 33; Reiter Decl. ¶¶ 6-7; Pompe Decl. ¶ 5; Barach Decl. ¶ 5.)

         There was also no uniform way by which external employees were paid for the hours worked after they reported their time. For example, some external employees, like Gordon, were not paid until they turned in their signed timesheets. (Gordon Decl. ¶ 11.) Other external employees who failed to turn in their timesheets by the payroll deadline were paid for the hours they were tentatively scheduled to work. (See Collins Decl. ¶ 10; Holbrook Decl. ¶ 7; Sauder Decl. ¶ 12, Def.'s Class Cert Resp. Ex. 17; Truman Decl. ¶ 4, Def.'s Class Cert Resp. Ex. 18.) Once they turn in their timesheets, the employees are paid for any time they worked that was in addition to their tentative or scheduled time. Some offices paid external employees according to their reported time, but then paid for additional time during the following pay period. (See, e.g., Tellefsen Decl. ¶ 14, Def.'s Class Cert. Resp. Ex. 8 (stating that there were occasions where she “accidentally misreported the time [she] worked over the phone, ” but that she would be paid for additional hours in the following paycheck after she corrected her time).

         Gordon was advised prior to starting at Maxim that she would be paid on a weekly basis. (Gordon Dep. 54.) She was required to submit time sheets, which indicated the exact times-to the minute-that she worked for Maxim's clients. (Gordon Decl. ¶ 4.) In addition, the client for which Gordon provided care, was required to sign the time sheet and attest to the time Gordon worked. (Id.) In her declaration, Gordon stated that she was physically required to hand-deliver the time-sheets to the Trevose Office, which was located fifteen miles away from her home, and even further away from some of the job locations. (Id. ¶ 7.) She would drop off the time sheet on Monday for the prior week. (Id. ¶ 8.) Gordon did not drive, but instead used public transportation. In her declaration, she stated that taking the bus from her house to the Trevose Office to drop off her time sheet would take at least one hour and fifteen minutes. (Id. ¶ 9.) On weeks where she was unable to drop off her timesheet to the Trevose Office on Monday, she would not be paid that week, but instead on the following payday. (Id. ¶ 11.) At her deposition, Gordon testified that she was also permitted to leave the time sheet in the drop box outside of Maxim's office. (Gordon Dep. 61.) In fact, Gordon's husband occasionally dropped off the timesheet in the drop box. (Id. at 118-21.)

         Gordon had completed certified nurse's aide (“CNA”) training; however, she provided no medical services to the clients during her employment at Maxim. (Gordon Dep. 18.) Gordon stated at her deposition that she never provided medical services to clients, and instead provided “companionship services” to Maxim clients. (Id.) In fact, she was advised during orientation to provide only companionship services to Maxim's clients, not medical services. (Gordon Dep. 60-61.) Gordon provided services in accordance with the client's plan of care. (Id. at 57.) In support of her request for class certification, Gordon submits the expert report of Colleen S. Vallen, who was retained to provide an opinion about the damages associated with the purported plaintiff class. Vallen analyzed ADP earning statements for the time period April 2011 through September 2014, and created a “damages model” that purports to analyze the damages associated with all late payments due to Maxim employees. (See Vallen Rept. 8-9, Pl.'s Class Cert. Reply Ex. A.) Based on payroll records, Vallen compared the actual pay date to the expected pay date of each weekly pay by each external employee, and assumed all employees were paid weekly. If there was any variance, Vallen considered that variance as a “late” payment which, under her damages model, triggered liquidated damages under the state and federal wage laws. (Id. at 6-7.) Vallen indicates that the payroll records she received from the parties were “incomplete.” (Id.) Generally, we find Vallen's report and conclusions to be unpersuasive and confusing, and based on multiple inconclusive “assumptions.” Gordon heavily relies on the report to draw legal conclusions as to liability even though Vallen was retained only to create a damages model.

         B. Procedural History

         On April 9, 2014, Gordon filed an Amended Class Action Complaint, asserting claims for violations of the FLSA and WPCL. (Am. Compl., ECF No. 21.)[2] Gordon alleges that Defendant failed to pay its external employees, such as Gordon and the other proposed class members, on its regularly-scheduled payday for work performed during the corresponding pay period, as required by the FLSA and WPCL. (Id.)

         On July 15, 2014, a Memorandum and Order were entered granting in part and denying in part Defendant's Motion to Dismiss the Amended Complaint. (July 15, 2014 Mem., ECF No. 27.)[3] The Court dismissed Gordon's claim under the WPCL as to any wages due and payable on or before April 9, 2011, based on the statute of limitations. Maxim's motion to dismiss was denied in all other respects. (Id. at 12.)

         On December 11, 2014, Plaintiff's Motion for Conditional Certification with regard to her claims under the FLSA was granted. (Dec. 11, 2014 Mem., ECF No. 47.) Judge Bartle granted conditional class certification “only as to all home healthcare aides employed by Maxim in Pennsylvania and who are paid beyond scheduled pay dates that fall on or after April 10, 2011.” (Id. at 9.) Gordon thereafter sent a proposed notice of collective action lawsuit to the purported class under the FLSA. (ECF No. 53.) Sixteen individuals opted-in and became Plaintiffs in the FLSA action. (ECF Nos. 55-72.) Eight of the opt-in Plaintiffs ultimately refused to appear for a deposition. As a result, the parties jointly stipulated to the dismissal of those eight opt-in Plaintiffs. (Stip., ECF No. 92.) Plaintiff also agreed to withdraw the affidavits and declarations of these opt-in Plaintiffs, as well as the affidavit of Sandra Cataldi, a non-opt-in Plaintiff who refused to appear for a deposition. (Id.)[4]

         Gordon filed the instant Motion for Class Certification on June 8, 2015. (Pl.'s Class Cert. Mot., ECF No. 73.) Defendant filed a Response in Opposition and Motion to De-Certify Conditionally Certified Collective Action Class on February 5, 2016. (Def.'s Class Cert. Resp., ECF No. 100.) Gordon filed a Reply. (Pl.'s Class Cert. Reply, ECF No. 107.) Defendant also filed a Reply in support of its Motion to De-Certify. (Def.'s Class Cert Reply, ECF No. 115.) Maxim then filed a Motion for Summary Judgment (Def.'s Sum. J. Mot., ECF No. 104), to which Plaintiff filed a Response (Pl.'s Sum. J. Resp., ECF No. 108), and Defendant filed a Reply (Def.'s Sum. J. Reply, ECF No. 114.)

         Each Motion is governed by a different legal standard. Accordingly, we discuss them separately. However, we initially note that Gordon's theory of this class action has changed dramatically over the course of the litigation. Originally, Gordon alleged that Maxim failed to provide overtime pay to her and other putative class members. After Maxim presented evidence that this was not the case, Gordon's theory-as expressed in the Amended Complaint-changed. In the Amended Complaint, Gordon argued that Maxim's burdensome and unlawful policy of requiring external employees to hand-deliver timesheets that were signed by clients caused late payments of wages in violation of the FLSA and WPCL. Again, Maxim presented evidence that this was not the case. Many supervisors permitted their external employees to report their time in various other ways, such as by fax, via text message, and by sending in the time sheets. Presented with this evidence, Gordon's theory again changed. She now alleges that simply because external employees were paid for certain hours in subsequent pay periods, Maxim has violated the FLSA and WPCL. She fails to allege any overarching Maxim policy that creates these violations. As discussed below, Plaintiff's theory does not support class certification of either her WPCL or FLSA claims.


         Plaintiff seeks to certify the following class under Rule 23(b)(3) of the Federal Rules of Civil Procedure:

All persons who were employed by Maxim and who were not (i) paid timely during their regular pay week more than twice in a calendar quarter year where their amount owed was in excess of 5% of their amount owed for that pay or (ii) whose wages remained unpaid for thirty (30) days beyond the regularly scheduled payday, at any time from April 11, 2011 to the present.

(Pl.'s Mot. Class Cert., ECF No. 73.) Plaintiff states that the issue in this class action is whether Maxim's practice of paying Plaintiff and the proposed class their earned wages beyond their regularly scheduled payday is a violation of the WPCL, which entitles the class to liquidated damages.

         A. Legal Standard

         A class action is “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Comcast v. Behrend, 133 S.Ct. 1426, 1432 (2013) (citation omitted). “Class certification is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23 are met.” In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 309 (3d Cir. 2008) (footnote and quotation marks omitted).

         The Third Circuit has recently clarified how a district court should conduct its “rigorous analysis.” See Reyes v. Netdeposit, LLC, 802 F.3d 469, 484 (3d Cir. 2015). The Court stated that “[i]n conducting its inquiry, a district court must rigorously assess the available evidence and the method or methods by which plaintiffs propose to use the evidence to prove impact at trial.” Id. (citation and internal quotation marks omitted). This “may require the district court to ‘delve' behind the pleadings” and “resolve all factual or legal disputes relevant to class certification even if they overlap with the merits-including disputes touching on elements of the cause of action.” Id. The Third Circuit ultimately concluded that in analyzing class certification under Rule 23, the district court must:

(1) conduct rigorous analysis, (2) review all avenues of inquiry in which it may have doubts (even if it requires reviewing the merits) in order to (3) be satisfied and (4) make a definitive determination on the requirements of Rule 23, or even (5) require that a plaintiff demonstrate actual, not presumed conformance with Rule 23 requirements.

Id. at 485.

         Plaintiff, as the party seeking class-action certification, bears the burden of “demonstrating by a preponderance of the evidence her compliance with the requirements of Rule 23.” Byrd v. Aaron's Inc., 784 F.3d 154, 163 (3d Cir. 2015). Plaintiff's burden is a heavy one. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011) (“Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule - that, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.” (emphasis omitted)).

         B. Discussion

         Class certification under Rule 23 has two components. The party seeking class certification must first establish the four requirements of Rule 23(a):

(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a); see also In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 309 n.6.

         “If all four requirements of Rule 23(a) are met, a class of one of three types (each with additional requirements) may be certified” under Rule 23(b). In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 309 n.6. Plaintiff seeks certification under Rule 23(b)(3), which states that “[a] class action may be maintained if Rule 23(a) is satisfied and if: (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). These are known as the predominance and superiority factors of Rule 23(b)(3).

         Plaintiff and Defendant dispute each of the factors of Rule 23(a) and (b)(3). We will address each factor below.

         1.Rule ...

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