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Stonehocker v. Kindred Healthcare Operating, LLC

United States District Court, N.D. California

September 19, 2019

Sarah Stonehocker, Plaintiff,
Kindred Healthcare Operating, LLC, Defendant.



         Plaintiff Sarah Stonehocker brings this putative class action against defendant Kindred Healthcare Operating, LLC alleging claims under California law for failure to pay overtime wages, failure to pay wages when due, and unlawful business practices. Defendant now moves for an early summary judgment on grounds that (i) plaintiff is bound by the judgment and dismissal entered in Cashon v. Kindred Healthcare Operating, Inc., et al., Case No. 3:16-cv-04889-RS (“Cashon”), and thus, plaintiff’s claims are barred by the doctrine of claim preclusion[1]; and (ii) plaintiff released her right to bring the claims asserted in this action through the Class Action Settlement Agreement and Stipulation approved by the court in Cashon. (Dkt. No. 18 (“MSJ”).)

         Having carefully reviewed the pleadings, the papers and evidence submitted, and oral argument, and for the reasons set forth more fully below, the Court Denies defendant’s motion for summary judgment.

         I. BACKGROUND

         A. Plaintiff and the Present Action

         Plaintiff filed the instant wage-and-hour putative class action on February 14, 2019, asserting claims arising from defendant’s failure to pay wages and overtime to “skilled clinicians” who worked at defendant’s skilled nursing facilities (“SNFs”) throughout the state. (Dkt. No. 1-2; Dkt. No. 1-4 (“FAC”) ¶ 1.) More specifically, plaintiff alleges that defendant required skilled clinicians working at its SNFs to maintain minimum patient care ratios (“PCR”), pursuant to which they had to spend at least 87 percent of their shift time on “skilled direct patient care.” (FAC ¶¶ 8-9.) Plaintiff alleges that in order to meet these productivity requirements and complete certain necessary unskilled work, skilled clinicians “performed unpaid and undocumented overtime work.” (Id. ¶ 11.)

         In the FAC, plaintiff asserts causes of action against defendant for failure to pay overtime, failure to pay wages when due, and unlawful business practices, seeking to represent the following class:

All individuals who worked for Kindred as skilled clinicians (including physical therapists, occupational therapists, and speech therapists) at Kindred skilled nursing facilities in California from four years preceding the initial filing of this action through the final disposition of this action.

(Id. ¶¶ 14, 19-31.) Plaintiff herself worked as an occupational therapist for defendant in two capacities. First, plaintiff worked for Kindred Rehab Services, Inc. (“Kindred Rehab”) from approximately October 31, 2006 through October 16, 2016. (Dkt. No. 22-1, Plaintiff’s Responsive Separate Statement of Undisputed Material Facts (“UMF”), No. 2.) During this period, Kindred Rehab, a direct subsidiary of defendant, offered skilled clinician services at various of defendant’s SNFs. (Id., No. 3-4.) As an occupational therapist for Kindred Rehab, plaintiff was paid on an hourly basis. (Dkt. No. 22-3 (“Stonehocker Decl.”) ¶ 2.) Second, beginning approximately October 17, 2016, plaintiff worked for Professional Healthcare at Home, LLC (“PHH”), an indirect subsidiary of defendant offering skilled clinician services in the home healthcare setting. (UMF, No. 5-7.)[2] As a home healthcare occupational therapist, plaintiff was compensated using a combination of a piece rate structure and other methods. (Stonehocker Decl. ¶ 4; Dkt. No. 23-1 (“VanRude Decl.”) ¶ 3.)[3]

         B. The Cashon Action

         On August 24, 2016, Valerie Cashon filed a putative class action against defendant, [4] also arising from defendant’s wage-and-hour practices. (UMF, No. 8.) In the operative second amended complaint (“SAC”), Cashon, who allegedly worked as an occupational therapist for defendant, asserted thirteen causes of action, including failure to pay piece rate employees for rest and meal breaks and nonproductive time, failure to pay for all hours worked, failure to pay minimum wage, failure to keep accurate payroll records, failure to pay overtime compensation, waiting time penalties, failure to reimburse for business expenses, and violation of the Private Attorney General Act of 2004 (“PAGA”). (Dkt. No. 18-7 (“RJN”), Ex. C, ¶¶ 31-105.)[5] Cashon purported to bring these claims on behalf of herself and a class comprised of the following:

All Clinicians and Piece Rate Employees who at any time during the four years preceding the filing of th[e] complaint and/or during its pendency were employed by [d]efendants in California.

(Id. ¶ 2.) The SAC defined “Clinicians” as “Occupational Therapists, Occupational Therapist Assistants, Physical Therapists, Physical Therapy Assistants, Registered Nurses, License Vocational Nurses, Media Social Workers, Speech Therapists, and other Clinicians that are paid by Piece Rate.” (Id. ¶ 12.) The SAC further alleged that class members were assigned to work “in private homes and in facilities throughout California.” (Id. ¶ 23.)

         On April 20, 2018, Judge Richard Seeborg, the presiding judge in Cashon, granted preliminary approval of a class action settlement entered into by the parties. (UMF, No. 14.) The settlement agreement defined the class as follows:

All persons who were employed by either Kindred Healthcare Operating, Inc. or Gentiva Certified Healthcare Corp. or one of its/their direct or indirect subsidiaries to provide skilled home health care services in California as Clinicians or piece rate employees at any time from August 24, 2012 through and including the date the Preliminary Approval Order is entered by the Court.

(Id., No. 19.) “Clinicians” was defined as “per diem, part-time and full-time home health aides, occupational therapists, occupational therapist assistants, physical therapists, physical therapy assistants, registered nurses, licensed practical nurses, licensed vocational nurses, medical social workers, nursing assistants, speech/language pathologists, speech/language therapists, and other clinicians paid on an hourly or per visit basis.” (Id., No. 20.) The settlement period was defined as August 24, 2012 through the date of preliminary approval, which was April 20, 2018. (Id., No. 16.) Settling class members were to be compensated based on “[d]ays [w]orked” “in the home or hospice setting.” (Id., Nos. 50, 55.)

         The settlement agreement also contained the following release provision:

As of the Effective Date and to the maximum extent permitted by law, the Plaintiff, and all Plaintiff Class Members (i.e., all Class Members who do not properly opt-out) and all persons purporting to act on the Plaintiff Class Members’ behalf or purporting to assert a claim under or through them, hereby do and shall be deemed to have fully, finally, and forever released, settled, compromised, relinquished and discharged any and all of the Released Parties of and from any and all of the following claims:
a. all disputes, claims, and/or causes of action pleaded or which could have been pleaded in and arising from the facts, claims and/or allegations in the Complaint and Plaintiff’s August 23, 2016 and September 20, 2016 letters to the LWDA concerning Defendant(s), and all claims (including penalties arising from such claims) under Cal. Labor Code §§201-203, 226, 226.2, 226.3, 226.7, 218.5, 510, 512, 558, 1174, 1174.5, 1194, 1194.2, 1194.3, 1197, 1197.1, 2802, Cal. Civil Proc. Code § 1021.5, Cal. Bus. & Prof. Code §§ 17200 et seq., California IWC Wage Orders, the Minimum Wage Orders, the Fair Labor Standards Act, damages, penalties, interest, attorney’s fees, costs, and other amounts recoverable under the causes of action under California law and/or federal law, and interest, attorney’s fees and costs based in whole or in part on the allegations and/or claims in the Action during the Settlement Period; and
b. all claims of any and every nature based on off-the-clock work, minimum wage, overtime, meal and rest break claims, paycheck-related claims, payroll records maintenance, wage statement claims, business expense reimbursement claims, waiting time penalties, California IWC Wage Order claims and ...

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