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Healthcare provider liable for unpaid OT

Virginia Lawyers Weekly//December 15, 2022

Healthcare provider liable for unpaid OT

Virginia Lawyers Weekly//December 15, 2022//

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Where a home healthcare provider failed to pay $759,698.70 in overtime wages, it was liable for that amount. And because the healthcare company and its owners were aware of their obligations, because of a prior investigation for failure to pay overtime, there were liable for an additional equal amount as liquidated damages.

Background

This is an action brough by the Department of Labor, or DOL, against Kynd Hearts Home Healthcare and its owners for nonpayment of overtime wages and failure to keep required records in violation of the Fair Labor Standards Act, or FLSA. Plaintiff has filed a motion for summary judgment.

There are no material facts in dispute. Defendants instead contest that they acted willfully and challenge plaintiff’s request for an order enjoining defendants from withholding the back wages for which they are liable.

FLSA violations

Defendants violated the overtime requirements in two ways: (1) by explicitly paying the regular rate to employees for time worked in excess of 40 hours each week and (2) by reducing employees’ regular rate in weeks when overtime was worked. In total, defendants unlawfully withheld $759,698.70 in employee wages during the relevant period. By keeping records that did not accurately reflect the overtime due to employees, the defendants also violated the FLSA.

Statute of limitations

The FLSA is generally governed by a two-year statute of limitations, unless the DOL establishes a “willful” violation, in which case the statute of limitations is extended to three years. Here, the defendants were previously investigated in 2014 through 2016 by the DOL for failure to pay overtime. At the end of that investigation, defendants agreed to pay back wages and were provided a copy of FLSA overtime regulations that specifically prohibited the pay scheme at issue in this lawsuit.

As such, they knew of their obligations to pay overtime and the illegality of the specific practice they used to evade those obligations. While defendants include a brief footnote in their briefing disputing that their actions were “willful,” they provide no justification for this conclusion. Accordingly, the court finds the defendants willfully violated the statute and a three-year statute of limitations is applicable.

Damages

Defendants are liable for back wages in an amount of $759,698.70 for the relevant period. The FLSA also provides that an employer who fails to pay minimum wages and overtime compensation is liable for liquidated damages in an amount equal to the unpaid minimum wages and overtime compensation.

Defendants appear to contest that liquidated damages are appropriate, given that they ask the court to adopt a proposed order without a liquidated damages award. Given defendants’ knowledge of their violations, as well as the lack of any proffered justification for the violations, the court finds the award of liquidated damages entirely appropriate and grants the DOL liquidated damages in an amount equal to the unpaid minimum wages and overtime compensation.

Injunctive relief

The court agrees with the DOL that a prospective injunction is warranted. Enjoining future violations of the FLSA by defendants is entirely reasonable given that defendants have again failed to pay overtime wages immediately following their first DOL investigation for failure to pay overtime wages. This will help streamline any future enforcement actions taken by the DOL against defendants for noncompliance.

The court is, however, unconvinced that a restitutionary injunction is necessary. The DOL contends that precedent in the Fifth and the Tenth Circuit indicate the court “must” grant a restitutionary injunction upon the DOL’s request. The court disagrees.

The DOL has sought (and the court will grant) a money judgment in the amount of the back wages and liquidated damages. The DOL does not explain why a money judgment is insufficient to serve the purposes of the statute. The arguments the DOL raises regarding the defendants’ prior conduct and the potential that defendants may reoffend in the future are addressed by the prospective injunction, which restrains future violations. The restitutionary injunction, on the other hand, addresses the concern that defendants may fail to pay the delinquent back pay and liquidated damages. As to this concern, the DOL does not make any showing.

Plaintiff’s motion for summary judgment granted in part, denied in part.

Walsh v. Kynd Hearts Home Healthcare LLC, Case No. 2:20-cv-630, Dec. 5, 2022. EDVA at Norfolk (Hanes). VLW 022-3-546. 13 pp.

VLW 022-3-546

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