The opinion of the court was delivered by: David O. Carter United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' SUMMARY JUDGMENT AND SUA SPONTE GRANTING IN PART SUMMARY JUDGMENT FOR PLAINTIFF
Before the Court is a Motion for Summary Judgment, or in the alternative, a Motion for Partial Summary Judgment filed by Defendants Coventry Health Care, Inc. and Coventry Health Care Workers Compensation, Inc. (Docket 42) ("Motion for Summary Judgment"). After careful consideration of the moving, opposing, and replying papers, this Court hereby GRANTS IN PART AND DENIES IN PART Defendants' Motion for Summary Judgment. The Court also sua sponte GRANTS IN PART summary judgment for Plaintiff.
Plaintiff Julia Rieve*fn1 ("Plaintiff") filed the present action on April 11, 2011 in the Northern District of California against Defendants Coventry Health Care, Inc. ("CHC") and Coventry Health Care Workers Compensation, Inc. ("CHC-WC") (collectively, "Defendants"). On July 6, 2011, the parties stipulated to transferring venue to the Central District of California. On September 15, 2011, this Court granted the parties' stipulation for leave for Plaintiff to file a First Amended Complaint ("FAC"), which added an additional cause of action for the California Labor Code's Private Attorney General Act ("PAGA") (Docket 27). On March 19, 2012, this Court granted Plaintiff's Motion for Leave to Amend (Docket 86) and permitted Plaintiff to file the Second Amended Complaint ("SAC"), which is now the operative complaint (Docket 91).
Plaintiff's primary claim against Defendants is that they improperly classified her and others similarly situated as exempt from the overtime requirements of the Fair Labor Standards Act ("FLSA") and California Labor Code. Plaintiff also asserts claims under California's Unfair Competition Law ("UCL") based on Defendants' alleged violation of California overtime law and alleged failure to provide meal and rest breaks; California Labor Code § 226 based on Defendants' alleged failure to provide accurate wage statements; and PAGA.
Defendant CHC-WC, which is owned and operated by Defendant CHC, is a corporation that "provides solutions to help its clients, including workers' compensation insurers and employers, reduce the costs associated with workers' compensation injuries, ensure quality care, and improve return to work rates and timing." Defendants' Reply to Statement of Facts ("Reply to SOF"), ¶ 1. CHC-WC provides its clients with medical field case management services, carried out by employees working in the Field Case Manager - Medical Workers' Compensation position ("FCM-Med" or "FCM"), to help clients' injured workers return to work as quickly, safely, and cost-effectively as possible. Id. at ¶ 2-3. Although Defendants dispute that Plaintiff was employed by CHC, there is no dispute that Plaintiff held the position of FCM-Med during her tenure with CHC-WC*fn2 . Id. at ¶ 4. Plaintiff, a registered nurse ("RN"), was required by Defendants to be a state-licensed RN and to have three or more years of case management experience in order to hold the position of FCM-Med. Id. at ¶ 17-20. Despite the RN requirement, Plaintiff was not engaged in direct patient care in her capacity as a FCM-Med. Id. at ¶ 24. While employed by Defendants, Plaintiff earned a fixed weekly salary ranging from $954 to $1096, which she was paid regardless of the hours she worked or the quality of her work. Id. at ¶ 40.
Despite the parties' varied interpretations of the nature of Plaintiff's duties, a close analysis shows that the substance of her tasks is actually undisputed. For example, Defendant asserts that Plaintiff "was responsible for assessing and analyzing an injured employee to evaluate the medical needs required to facilitate the patient's appropriate and timely return to work." Id. at ¶ 42. Plaintiff's primary dispute with this statement rests on a more restricted interpretation of the words "assess," "analyze," and "evaluate." The Court does not need to determine which party's interpretation is correct to determine that this is not a material fact dispute. When it comes to the substance of Plaintiff's tasks, the parties differ only in their vocabulary. Indeed, at oral argument, despite the parties' vehement disagreement about whether Plaintiff's job duties qualify her for exemption, neither party challenged the Court's factual recitation of Plaintiff's tasks.
Plaintiff's job duties were undisputedly "to provide ongoing, day-to-day case management services for Defendants' customers by documenting the costs of care, preparing reports regarding a plan of care, and identifying and implementing medical services to meet the needs of Defendants' customers." Opposition, 5; Rieve Decl., ¶ 4 . Plaintiff explains that she monitored and reported whether patients were receiving medical services in accordance with the medical orders issued by the attending physician, although it was the physicians who had the decision-making power to order a course of treatment and the claims adjusters who had the power to eliminate such treatment. Reply to SOF, ¶ 42. Defendants do not dispute that Plaintiff did not have any authority to order treatment, nor to eliminate, deny, suspend, or modify any treatment ordered by a physician. Id. Plaintiff explains that FCMs do not make decisions about reducing costs but "only document 'achieved cost savings' in Defendants' CMD/Win program which is an 'inflexible' system comprised of preformatted templates."Id. at ¶ 71. Plaintiff characterizes her role as the "eyes and ears" of Defendants' customers, the claims adjusters. Id. at ¶ 42.
Plaintiff testified in her deposition that she spent more than fifty percent of her time communicating with doctors, patients and claims adjustors in order to understand the patients' conditions, determine what medical care was being provided and evaluate whether it was appropriate. Id. at ¶ 51, 69. When Plaintiff interviewed patients, she would try to understand their injuries or conditions and their previous care so that she could consider other alternatives and advise them accordingly. Id. at ¶ 48. Plaintiff also explained in her deposition that she sought to understand and synthesize the medical status and work demands of a patient "through communication with the physician, including any necessary clarification of the client's physical capacity for returning to work." Id. at ¶ 52. Plaintiff was guided in her duties by the Field Case Management Manual ("FCM Manual"), which provided step-by-step instructions she must follow when assigned a case, although Plaintiff explained that she only needed to look at it occasionally. Id. at ¶ 114-15.
Plaintiff has stated that "in order to have the best possible outcomes, healthcare systems and facilities need highly qualified, certified individuals performing the vital function of care coordination" and explained that "[t]hrough their knowledge and expertise, case managers provide oversight and coordination across settings and providers." Id. at ¶ 56, 59.
The FCM Manual provides that the FCMs' duties involve "a skilled professional's critical evaluation of a claimant's medical progress followed by case management actions that facilitate recovery." Reply to SOF, ¶ 45. Although Plaintiff did not have the power to eliminate unnecessary treatment, she did work to identify unnecessary procedures and treatments. Id. at ¶ 72. Plaintiff also, at least in one particular case, educated a patient on how to identify symptoms of post-traumatic stress disorder. Id. at ¶ 65.
Defendants seek summary judgment on Plaintiff's overtime claims on the grounds that she falls into the professional and administrative exemptions under both federal and state law. Defendant also seeks summary judgment on Plaintiff's UCL, wage statement, and PAGA claims, in addition to seeking summary judgment on all claims against CHC on the grounds that Plaintiff was not employed by CHC.*fn3
Summary judgment is proper if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1992); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1161 (9th Cir. 1992). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact for trial, but it need not disprove the other party's case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). When the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out that the non-moving party has failed to present any genuine issue of material fact. Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990).
Once the moving party meets its burden, the opposing party must set out specific facts showing a genuine issue for trial; merely relying on allegations or denials in its own pleading is insufficient. See Anderson, 477 U.S. at 248-49. A party cannot create a genuine issue of material fact simply by making assertions in its legal papers. S.A. Empresa de Viacao Aerea Rio Grandense v. Walter Kidde & Co., Inc., 690 F.2d 1235, 1238 (9th Cir. 1982). Rather, there must be specific, admissible evidence identifying the basis for the dispute. Id. The Supreme Court has held that "[t]he mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for [the opposing party]." Anderson, 477 U.S. at 252.
The Department of Labor ("DOL") has set forth exemptions to FLSA coverage, and Defendants argue that the professional and administrative exemptions apply to Plaintiff. See 29 C.F. R. § 541.0 et seq. The FLSA "is to be liberally construed to apply to the furthest reaches consistent with Congressional direction" such that "FLSA exemptions are to be narrowly construed against . . . employers and are to be withheld except as to persons plainly and unmistakenly within their terms and spirit." Klem v. County of Santa Clara, 208 F.3d 1085, 1089 (9th Cir.2000) (internal quotation marks and citations omitted); see also Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 1124-25 (9th Cir.2002).
1. Professional Exemption
The professional exemption to the FLSA applies to those employees (1) who are compensated on a salary or fee basis at a rate of not less than $455 per week and (2) whose primary duty is the performance of work 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)."The question of how [an employee] spent his working time is a question of fact, but whether his particular activities excluded him from the overtime requirements of the FLSA is a question of law." Edwards v. Audubon Ins. Group, No. 02--1618, 2004 WL 3119911, at *4 (S.D. Miss. Aug. 31, 2004).
It is undisputed that Plaintiff was compensated at a higher rate than $455 per week. Reply to SOF, ¶ 40 ("Throughout Plaintiff's employment with the CHC-WC, she received a fixed weekly salary of $954 to $1096 regardless of the number of hours she worked or the quality of her work.").
The second inquiry is whether Plaintiff satisfies the three-prong "duties" test of the "primary duty" requirement: (1) the employee must perform work requiring advanced knowledge; (2) the advanced knowledge must be in a field of science or learning; and (3) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. 29 C.F.R. § 541.301(a). The performance of such work must be the "primary duty," or the "principal, main, major or most important duty that the employee performs." 29 C.F.R. § 541.700(a).
The DOL has made clear that "[r]egistered nurses who are registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption." 29 C.F.R. § 541.301(e)(2). It is undisputed that Plaintiff is a registered nurse and that she was required to be a registered nurse to work as an FCM-Med. Reply to SOF, ¶ 17, 20. Plaintiff has thus satisfied the second and third prongs of the duties test, as her advanced knowledge is in a field of science and was acquired by a prolonged course of specialized intellectual instruction. See Powell v. American Red Cross, 518 F. Supp. 2d 24, 39 (D.D.C. 2007) (registered nurses satisfy the second and third elements of the primary duty test).
The mere fact that Plaintiff is a registered nurse, however, does not end the Court's inquiry. As the Powell court reasoned, the DOL's provision "is not necessarily dispositive of the first element of that test, i.e., whether a particular nursing position has as its primary duty the performance of work requiring advanced knowledge." Id.; see also 29 C.F.R. § 541.2 (exempt or nonexempt status of an employee must be determined based on whether the employee's salary and duties meet the requirements of the regulations for a particular exemption). The DOL has explained that "[w]ork requiring advanced knowledge" means work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment, as distinguished from performance of routine mental, manual, mechanical or physical work. An employee who performs work requiring advanced knowledge generally uses the advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level.
29 C.F.R. § 541.301(b). To determine whether Plaintiff is exempt as a professional, this Court must thus determine whether Plaintiff's specific work "requir[ed] advanced knowledge," the first prong of the duties test.
Defendants first argue that Plaintiff is automatically exempt as a professional because she is a registered nurse who relied upon her nursing skills, judgment, training, and experience to perform her duties. Motion for Summary Judgment, 6. This is first and foremost a curious assertion because Defendants later argue that Plaintiff is exempt as a professional under California law precisely because her duties are entirely distinct from those of a registered nurse engaged in the practice of nursing. See Reply, 19-20. As explained above and as held in the Powell case, the fact that Plaintiff holds an RN degree is not dispositive, nor is a conclusory statement from Plaintiff's deposition that she relied upon her RN training. An inquiry of whether Plaintiff's work required advanced knowledge necessitates a thorough examination of the tasks comprising Plaintiff's primary duties. As will be detailed in the remainder of this Order, the Court's examination of Plaintiff's duties demonstrates that her role in the hierarchy of Defendants' business is quite closely aligned with the position occupied by a registered nurse, such that Plaintiff should be afforded the same treatment under the law as registered nurses engaged in the practice of nursing. As it turns out, this conclusion exempts Plaintiff under federal law but renders her nonexempt under state law.
The Court will first thoroughly address Plaintiff's exemption from FLSA coverage as a professional employee. The parties, not surprisingly, strongly dispute whether Plaintiff's primary duties required advanced knowledge. Defendants argue that Plaintiff's primary tasks require advanced knowledge because they necessitated the use of Plaintiff's discretion and independent judgment. Motion for Summary Judgment, 8-9. Plaintiff, on the other hand, asserts that she performed "sub-professional, routine work" that "was highly standardized and closely controlled by the 'guidelines.' " Opposition, 20. The Court agrees with Defendants that Plaintiff exercised independent ...