Clark v. Brantell , 2016 Ohio 718 ( 2016 )

[Cite as Clark v. Brantell, 2016-Ohio-718.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
April L. Clark, R.N., :
Plantiff-Appellant, :
Sarah M. Brantell, L.P.N., :
Plaintiff-Appellee, : No. 15AP-597
(Ct. of Cl. No. 2014-00584)
v. :
(ACCELERATED CALENDAR)
Ohio Department of :
Rehabilitation and Correction,
:
Defendant-Appellee.
:
D E C I S I O N
Rendered on February 25, 2016
On brief: Marshall and Morrow, LLC, Edward R. Forman,
Samuel M. Schlein, and John S. Marshall, for appellant.
Argued: Edward R. Forman
On brief: Michael DeWine, Attorney General, Randall
Knutti, Emily Simmons Tapocsi, Christopher L. Bagi, Sloan
Spalding, and Robert Fekete, for Ohio Department of
Rehabilitation and Correction. Argued: Sloan T. Spalding
APPEAL from the Court of Claims of Ohio
LUPER SCHUSTER, J.
{¶ 1} Plaintiff-appellant, April L. Clark, R.N., appeals from a judgment of the
Court of Claims of Ohio granting partial summary judgment in favor of defendant-
appellee, the Ohio Department of Rehabilitation and Correction ("ODRC"). For the
following reasons, we affirm.
No. 15AP-597 2
I. Facts and Procedural History
{¶ 2} The two named plaintiffs in this case are Clark, a registered nurse ("RN"),
and Sarah M. Brantell, a licensed practical nurse ("LPN"). Both are employed by ODRC to
provide inmate and staff medical care. They began this action on behalf of themselves
and similarly situated individuals with a collective action complaint alleging a willful
failure to compensate hourly employees with overtime pay, a violation of the Fair Labor
Standards Act of 1938 ("FLSA"), 29 U.S.C. 201 et seq. The complaint alleges ODRC
"directed, suffered and/or permitted" nurses to arrive ten minutes before the start of their
eight-hour shifts while providing no pay for the extra time. (Complaint, ¶ 6, 8.) Clark
asserts that ODRC work rules impose this "transitional time" to allow incoming nurses to
consult with departing nurses on the previous shift, jointly count medication and needles,
and otherwise ensure continuity of care for patients.
{¶ 3} ODRC filed a motion for partial summary judgment addressing only the
claims of Clark and similarly situated RNs. ODRC argued that these employees were
"learned professionals" paid on a salary basis, thereby falling under an overtime
exemption in the FLSA. Clark responded by asserting that there remained a genuine issue
of material fact on the question of whether her employee category is paid on a salary basis
and therefore eligible for the overtime exemption for learned professionals. The Court of
Claims agreed with ODRC and granted partial summary judgment as to Clark's claims.
Clark filed a premature notice of appeal, then requested that the Court of Claims amend
its judgment nunc pro tunc to make it immediately appealable through the addition of
Civ.R. 54(B) language. The appeal is now properly before this court.
II. Assignments of Error
{¶ 4} Clark raises the following assignments of error for our review:
1. In granting summary judgment, the court of claims erred by
shunting to the merits unrebutted evidence that hours — up to
10 minutes before and 10 minutes after each scheduled shift
registered nurses spent on performing required duties during
their continuous work day — were omitted from their salary
and thus precluded the department from satisfying the
requirement in the Fair Labor Standards Act exception for
learned professionals that they be paid a "predetermined
amount" on a "salary basis" which is not reduced due to
variation in the quality or quantity of work.
No. 15AP-597 3
2. In granting summary judgment, the court of claims erred
by disregarding the functional equivalence of reducing a
salary due to variation in the quality or quantity of work to the
department's practice of avoiding overtime for up to 10
minutes before and 10 minutes after each scheduled shift even
though that practice omitted from salary the time actually
expended in the performance of required duties based on the
department's implicit perception that brief transitional work
between shifts lacked the requisite quality or quantity to
deserve to be paid.
III. Standard of Review and Applicable Law
{¶ 5} An appellate court reviews summary judgment under a de novo standard.
Coventry Twp. v. Ecker, 101 Ohio App.3d 38, 41 (9th Dist.1995); Koos v. Cent. Ohio
Cellular, Inc., 94 Ohio App.3d 579, 588 (8th Dist.1994). Summary judgment is
appropriate only when the moving party demonstrates (1) no genuine issue of material
fact exists, (2) the moving party is entitled to judgment as a matter of law, and
(3) reasonable minds could come to but one conclusion and that conclusion is adverse to
the party against whom the motion for summary judgment is made, that party being
entitled to have the evidence most strongly construed in its favor. Civ.R. 56(C); State ex
rel. Grady v. State Emp. Relations Bd., 78 Ohio St.3d 181, 183 (1997).
{¶ 6} Pursuant to Civ.R. 56(C), the moving party bears the initial burden of
informing the trial court of the basis for the motion and identifying those portions of the
record demonstrating the absence of a material fact. Dresher v. Burt, 75 Ohio St.3d 280,
293 (1996). However, the moving party cannot discharge its initial burden under this rule
with a conclusory assertion that the nonmoving party has no evidence to prove its case;
the moving party must specifically point to evidence of the type listed in Civ.R. 56(C)
affirmatively demonstrating that the nonmoving party has no evidence to support the
nonmoving party's claims. Id.; Vahila v. Hall, 77 Ohio St.3d 421, 429 (1997). Once the
moving party discharges its initial burden, summary judgment is appropriate if the
nonmoving party does not respond, by affidavit or as otherwise provided in Civ.R. 56,
with specific facts showing that a genuine issue exists for trial. Dresher at 293; Vahila at
430; Civ.R. 56(E).
No. 15AP-597 4
{¶ 7} All parties to the case agree that the FLSA and accompanying federal
regulations provide the governing law. The FLSA requires employers to pay overtime
compensation for work performed in excess of 40 hours per week. 29 U.S.C. 207(a)(1);
Johnson v. Ohio Dept. of Youth Servs., 96 Ohio St.3d 161, 2002-Ohio-4010, ¶ 7. Ohio
defers to federal regulations and applicable federal case law for determination of eligibility
for overtime compensation. Briscoe v. Columbus Metro. Area Community Action Org.,
10th Dist. No. 81AP-887 (Mar. 9, 1982). An employee bringing an action under the FLSA
for unpaid overtime bears the burden of demonstrating that he or she performed
uncompensated work. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 686-87
(1946). To prove the FLSA claim, the plaintiff must produce sufficient evidence to show
the amount and extent of the work and resulting unpaid compensation. Id. at 687-88.
{¶ 8} Here, the evidentiary burden shifted for summary judgment purposes to the
defendant employer because ODRC claims an exemption to the general FLSA overtime
requirement: procedurally, these exemptions are raised by the employer as an affirmative
defense. Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974). Such exemptions
will be narrowly construed against the employer, who must demonstrate by clear and
affirmative evidence that the employee is covered by the exemption. White v. Murtis M.
Taylor Multi-Serv. Ctr., 188 Ohio App.3d 409, 2010-Ohio-2602, ¶ 12 (8th Dist.). "The
manner in which an employee spends his time is a question of fact, while the
determination whether his duties fall within an exemption is a question of law." Id., citing
Jastremski v. Safeco Ins. Cos., 243 F.Supp.2d 743, 747 (N.D.Ohio 2003). The apparent
heightened burden imposed on the employer by the above "clear and affirmative"
language, however, does not bring with it any heightened evidentiary burden when
considering a motion for summary judgment. Thomas v. Speedway SuperAmerica, LLC,
506 F.3d 496 (6th Cir.2007).
{¶ 9} The FLSA provides an overtime exemption for "bona fide executive,
administrative, or professional" positions. 29 U.S.C. 213(a)(1); Johnson at ¶ 11. The act
itself does not define these terms, but the applicable regulations explain each category.
Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 558-59 (2d Cir .2012). Specifically,
ODRC here invokes the "learned professional" exemption applicable to employees with
specialized skills and training. To qualify, an employee must satisfy a two-prong test.
No. 15AP-597 5
Powell v. Am. Red Cross, 518 F.Supp.2d 24, 38 (D.D.C.Cir.2007). First, the employee
must be compensated "on a salary or fee basis at a rate of not less than $455 per week."
29 C.F.R. 541.300(a)(1). Second, the employee's primary duties must require
performance of work demanding 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. 541.301 (a)(3).
{¶ 10} These federal regulations expressly anticipate that "[r]egistered nurses who
are registered by the appropriate State examining board generally [will] meet the duties
requirements for the learned professional exemption." 29 C.F.R. 541.301(e)(2). The
parties accordingly agree that Clark and similarly situated RNs employed with ODRC
satisfy the "primary duty" prong of the above test by virtue of their advanced education
and specialized knowledge. The dispute lies in whether Clark is a "salaried" employee in
order to meet the remaining prong of the test.
IV. Discussion
{¶ 11} Because Clark did not provide separate arguments for each assignment of
error and because both assignments relate to whether Clark was a salaried employee
under the learned professional exemption under the FLSA, we will address them together.
{¶ 12} "An employee will be considered to be paid on a 'salary basis' within the
meaning of these regulations 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). The term
"predetermined" means that the employee is guaranteed a certain amount of hours to
work and the corresponding salary paid on a regular basis. Any variation or reduction
from such a predetermined amount must be caused by the actions of the employee, not
the employer; i.e., the employer may not deny the regular salary on the simple basis of
lack of work to offer the employee. 29 C.F.R. 541.602(a); Douglas v. Argo-Tech Corp., 113
F.3d 67, 71 (6th Cir.1997). Earnings "may be computed on an hourly, a daily or a shift
basis, without losing the exemption or violating the salary basis requirement." 29 C.F.R.
541.604(b); Acs v. Detroit Edison Co., 444 F.3d 763, 768-69 (6th Cir.2006) (Salary test
may be satisfied even where employer uses an hourly payroll system based on a
No. 15AP-597 6
guaranteed 40-hour work week.); Martinez v. Hilton Hotels Corp., 930 F.Supp.2d 508,
523 (S.D.N.Y.2013). The purpose of the salary basis test is to distinguish "true" executive,
administrative, or professional employees from non-exempt employees, i.e., employees
who may be disciplined "by piecemeal deductions from * * * pay." Yourman v. Giuliani,
229 F.3d 124, 130 (2d Cir.2000), quoting Aur v. Robbins, 519 U.S. 452, 456 (1997).
{¶ 13} The salary basis test does not deprive employers of all flexibility in adjusting
pay either upward or downward: "[T]he exemption is not lost if an exempt employee who
is guaranteed at least $455 each week paid on a salary basis also receives additional
compensation based on hours worked for work beyond the normal work week. 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 paid
time off." 29 C.F.R. 541.604(a); see generally Anani v. CVS Rx Servs., Inc., 788 F.Supp.2d
55, 61-62 (E.D.N.Y.2011), aff'd 730 F.3d 146 (2d Cir.2013). Conversely, a public employer
that follows "principles of public accountability" may reduce pay on an hourly basis for
absences of less than a full day. 29 C.F.R. 541.710(a). "Public accountability is the notion
that 'governmental employees should not be paid for time not worked due to the need to
be accountable to the taxpayers for expenditure of public funds.' " Serv. Emps. Internatl.
Union, Local 102 v. Cty. of San Diego, 60 F.3d 1346, 1352 (9th Cir.1994), fn. 2, quoting
Hilbert v. Dist. of Columbia, 23 F.3d 429, 435 (D.C.Cir.1994); see also Worley v.
Cincinnati, 1st Dist. No. C-990506 (Aug. 25, 2000). Under the public accountability
principle, an employee who does not work all or part of a scheduled shift and does not
take corresponding leave time for such an absence is responsible for the resulting
reduction in wages without compromising his or her salaried status. Cooney v. Chicago,
644 F.Supp.2d 1061 (N.D.Ill. 2009).
{¶ 14} For purposes of summary judgment, the facts to which we apply these
standards are straightforward. ODRC employs Clark in a position classified as "Nurse I"
under the terms of a Collective Bargaining Agreement ("CBA") governing multiple state
agencies and employee categories. The Nurse I position requires licensure and
registration as a professional nurse and a two-year education in the field. Nurse I is
classified as a full-time employee under the CBA, working 40 hours per week and 2,080
No. 15AP-597 7
hours per calendar year. The full-time rate of pay for any pay step in the position
substantially exceeds $455 per week.
{¶ 15} Under the CBA, "[t]he standard work week for full-time employees shall be
forty (40) hours exclusive of time allotted for unpaid meal periods." (Defendant exhibit C,
CBA, Section 24.01.) Section 43.07 of the CBA provides that "[e]mployees who report to
work as scheduled and are then informed that they are not needed or who are called at
home by the Employer and told not to report to their regularly scheduled work day shall
receive their full day's pay at regular rate." (Defendant exhibit C, CBA, Section 43.07.) A
CBA memorandum addition covering ODRC personnel addresses overtime allocation and
bidding, but does not specifically define overtime or address the transitional time that
gives rise to Clark's claims. This memorandum does state that "overtime procedures for
nurses will be established at the local institutional level by the Employer." (Defendant
exhibit C, CBA, 238.) ODRC supplements the CBA with a "Payroll and Timekeeping
Policy" promulgated pursuant to the department director's authority granted by R.C.
5120.01. This policy does not explicitly address transitional time for nurses. The
timekeeping policy prohibits "bargaining unit and FLSA overtime eligible employees"
from clocking in more than ten minutes before the start of a scheduled shift, or clocking
out more than ten minutes after the end of a scheduled shift, without supervisor
authorization. (Defendant exhibit E, Timekeeping Policy VI(C)(1)(b).) The policy also
explains the department's public accountability practices: "An employee's pay shall be
reduced, or such employee shall be placed on leave without pay for absences for personal
reasons or because of illness or injury of less than one work-day when accrued leave is not
used by the employee." (Defendant exhibit E, Timekeeping Policy VI(F)(2).)
{¶ 16} Neither of these documents establishes ODRC's practice of requiring nurses
to clock in early to cover transitional time. Clark introduced evidence of the transitional
arrival-time policy through her own affidavit, stating that she was "required * * * to arrive
approximately ten minutes prior to the start of each scheduled shift [and] typically not
paid for this time." (Nov. 14, 2015 Clark Affidavit, ¶ 4, 7.) Neither her affidavit nor any
other evidence in the record reflects a comparable compulsory requirement to hold over
for transitional time after a shift.
No. 15AP-597 8
{¶ 17} In practice, the undisputed pay records submitted by Clark establish that
when she worked a full shift as scheduled, Clark clocked in between ten and zero minutes
before the shift start time. Holdovers after the shift-end time also occurred but were less
common. Consistent with her assertions, the records generally (but not always) reflect
that she received no pay for the ten minutes preceding or following her regular shift.
Under no circumstances, however, was Clark docked pay if she failed to appear the
required ten minutes in advance of her shift; on most days, in fact, she seems to have
clocked in and out within a minute or two of her shift times with no impact on pay.
{¶ 18} Clark asserts two bases for finding that she was not a salaried employee.
First, Clark argues that her pay varied from pay period to pay period because the hours
she worked varied considerably, thereby reducing or increasing her pay well above or
below her nominal weekly wage based on a 40-hour week. For some pay periods, her
weekly pay even fell below the $455-per-week minimum for the FLSA salaried employee
test. This volatility, she argues, is not typical of salaried employment. Second, Clark
argues that ODRC, by avoiding overtime for up to ten minutes before and ten minutes
after each scheduled shift, created the functional equivalent of a variation in pay based on
quality or quantity of work and removed her from salaried status.
A. Wide Variety of Weekly Pay
{¶ 19} With respect to the fluctuations in Clark's gross pay from paycheck to
paycheck, ODRC does not dispute that such variations were substantial and that her pay
sometimes fell below the $455-per-week threshold. However, as ODRC explains, and the
evidence supports, these variations were due either to unpaid absences voluntarily
undertaken by Clark, or authorized overtime that caused her to receive a considerable
amount over her base salary. We agree with the Court of Claims that these fluctuations
were not caused by "variations in the quality or quantity of the work performed." 29
C.F.R. 541.602(a). They were, rather, the result of proper application of ODRC's right to
invoke the "public accountability" principle to avoid compensating employees for time not
worked on the employee's initiative and to in turn pay an otherwise-exempt employee
discretionary overtime pursuant to the CBA. There is no evidence that ODRC denied
Clark any part of her regular salary on the simple basis of lack of work to offer her.
Douglas. The payroll records indicate that ODRC complied with its obligation under the
No. 15AP-597 9
CBA to pay Clark for a scheduled shift when she was present and ready to work. In sum,
we agree with the Court of Claims that these variations in weekly pay did not of
themselves remove Clark from salaried status and we overrule Clark's first assignment of
error.
B. Overtime Policy
{¶ 20} We now address Clark's argument that the overtime policy operated to
reduce her compensation based on quantity or quality thereby removing Clark from
salaried status. The essence of salaried employment is the presence of fixed pay for a
variable duration of work. The variations complained of in relation to the overtime policy
are not variations in pay based on the quantity or quality of work, but, to the contrary,
variations in work (within a narrow range) resulting in no variation in pay. Salaried
employees and employers are not limited to a uniform 40-hour work week in exchange for
their stated salary. Ellis v. J.R.'s Country Stores, Inc., 779 F.3d 1184, 1189 (10th Cir.2015)
(50-hour baseline work week was consistent with FLSA salaried employment, and
employer had no history of making improper deductions for shorter work weeks). Once a
salaried employee is guaranteed pay for her scheduled shifts on a full-time basis, variation
of the standard work week above the minimum requirement does not affect salaried
status. Id. The most important factor remains the presence of a nondeductible minimum
salary. Hogan v. Allstate Ins. Co., 361 F.3d 621, 625 (11th Cir.2004).
{¶ 21} In the present case, the working conditions spelled out in ODRC's time-
keeping policy amount to a full-time work day comprised of a shift of between 8 hours
and 8 hours and 20 minutes. Any time worked at or above 40 hours satisfied ODRC's
obligation to offer its salaried staff full-time pay when such employees were willing and
able to appear for scheduled shifts. The fact that outside of the maximum 20-minute
range Clark either lost pay or gained overtime benefits does not affect the baseline
premise that as a salaried employee she was not guaranteed pay that varied directly with
her time on the job. The FLSA and attendant regulations permitted the deductions under
the public accountability policy and, under the CBA, ODRC had agreed to partially waive
the overtime exemption to which it was otherwise entitled for RNs. The fact that ODRC as
an employer had bargained away much of the overtime exemption does not mean that it
No. 15AP-597 10
lost the right to retain some residue of it in practice. We therefore overrule Clark's second
assignment of error.
{¶ 22} We find Clark and similarly situated RNs were learned professionals and
remained both professionally qualified and salaried employees under these conditions.
Therefore, the Court of Claims correctly concluded that there remains no genuine issue of
material fact regarding the applicability of the FLSA learned professional overtime
exemption.
V. Conclusion
{¶ 23} Based on the foregoing reasons, the Court of Claims did not err in granting
ODRC's motion for summary judgment. Having overruled Clark's two assignments of
error, we affirm the judgment of the Court of Claims of Ohio.
Judgment affirmed.
SADLER and BRUNNER, JJ., concur.
BRUNNER, J., concurring.
{¶ 24} I concur with the decision of the majority affirming the judgment of the
Court of Claims granting summary judgment to the Ohio Department of Rehabilitation
and Correction ("ODRC") with regard to plaintiff-appellant Clark's claims under the Fair
Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. 201 et seq. There is no genuine issue of
material fact that Clark was subject to the FLSA learned professional overtime
exemption.
{¶ 25} I believe it is important to acknowledge, however, that the record indicates
that ODRC failed to compensate Clark for the time she performed primary duties of her
job after she clocked in but before her shift started, and before she clocked out but after
her shift had ended, and this violated the Collective Bargaining Agreement ("CBA").
{¶ 26} Section 24.02 of the CBA, "Rate of Overtime Pay," provides that
"[e]mployees shall receive compensatory time or overtime pay for authorized work
performed in excess of forty (40) hours per week."
No. 15AP-597 11
{¶ 27} Division (A) of Section 24.04, "Overtime and Compensatory Time," sets
forth how overtime work shall be compensated, as follows:
Hours in an active pay status in excess of forty (40) hours in
any calendar week shall be compensated at the rate of one and
one-half (1 1/2) times the total rate of pay, as defined by
Section 43.01, for each hour of such time. Total rate of pay
includes the base rate plus longevity, all applicable
supplements, and shift differential where applicable.
{¶ 28} Because Clark did not plead or argue a violation of the CBA, we are unable
to review the Court of Claims' decision on this matter through that lens. Accordingly, I
concur with the decision of the majority.