March 28, 2024
By: Thomas O’Connell
Citation:
Harwell-Payne v. Cudahy Place Senior Living LLC, 2024 WL 1333428 (E.D. Wis. 2024).
Executive Summary:
In this unpublished decision, Chief Judge Pamela Pepper of the United States District Court for the Eastern District of Wisconsin partially granted and partially denied motions in a wage and hour dispute under the Fair Labor Standards Act (FLSA) and Wisconsin wage law. Plaintiff Charletta Harwell-Payne sought to hold 41 Management LLC accountable as a joint employer and argued that pre-shift COVID-19 screenings and meal break deductions violated compensable work standards. The court ruled against joint employer status and determined that the screenings were not compensable. However, it granted the plaintiff’s motions for reconsideration and reopening discovery on certain claims.
Relevant Background:
Charletta Harwell-Payne worked as a Med Aide at Cudahy Place Senior Living, a memory care facility in Wisconsin. Her job included administering medication, assisting residents with personal care, and performing other duties essential to their well-being. During her employment, Harwell-Payne was subject to policies and practices implemented by 41 Management LLC, which provided oversight for multiple facilities, including Cudahy Place.
41 Management was responsible for setting general employment policies, creating standardized handbooks, and managing payroll across its facilities. Harwell-Payne argued that this level of control made 41 Management her employer under both federal and state wage laws. Specifically, she alleged that 41 Management controlled aspects of her working conditions, such as requiring employees to punch out for meal breaks and programming payroll software to automatically deduct time for breaks, even when they were less than 20 minutes.
Another major point of contention involved mandatory pre-shift COVID-19 screenings. These screenings included taking employees’ temperatures and completing a health questionnaire before clocking in. Harwell-Payne claimed that this time was integral to her job, as the screenings were necessary to protect the health of the vulnerable elderly residents she cared for. She also argued that time spent walking from the screening area to the time clock added to the uncompensated delay.
Harwell-Payne brought this lawsuit against Cudahy Place Senior Living LLC and 41 Management LLC under the Fair Labor Standards Act (FLSA) and Wisconsin wage law. She sought to recover unpaid wages for time spent on COVID-19 screenings, deductions for interrupted or short meal breaks, and lost time due to rounding practices. The defendants disputed these claims, arguing that screenings were not part of her primary job responsibilities and that 41 Management was not her employer because it did not exercise direct control over her hiring, firing, or day-to-day work.
The case also involved procedural disputes, including Harwell-Payne’s efforts to certify a class and collective action on behalf of other employees subject to similar policies. These efforts were initially denied but revisited as part of the ongoing litigation.
Decision:
The court’s key rulings included the following:
- The court found that 41 Management did not meet the criteria for joint employer status under Moldenhauer, as it lacked authority over hiring, firing, or direct supervision of the plaintiff’s daily work. While it set general employment policies and managed payroll, this was insufficient to establish employer status under the FLSA or Wisconsin Stat. § 109.01(2).
- The court ruled that screenings were not integral to the plaintiff’s principal activities as a Med Aide. Citing Chagoya v. City of Chicago, 992 F.3d 607 (7th Cir. 2021), the court held that screenings were preliminary activities under 29 C.F.R. § 790.7(b).
- The court upheld the defendants’ rounding practices, noting that deductions for short increments of time, such as screenings, were permissible under E.I. du Pont De Nemours & Co. v. Harrup, 227 F.2d 133 (4th Cir. 1955).
- The court found that the defendants’ policy on meal breaks complied with federal standards, including 29 C.F.R. § 785.19, as employees were required to notify supervisors if breaks were interrupted.
- The plaintiff’s argument that 41 Management controlled her employment through payroll management and policy enforcement was rejected due to insufficient evidence of direct control.
Looking Forward:
This case provides important insights for employers and franchisors:
- Employers should structure policies to avoid ambiguous control over day-to-day employee activities. Clear delegation to facility-level management can mitigate liability under FLSA standards.
- Activities like pre-shift screenings may not qualify as compensable work unless directly tied to an employee’s primary duties. Employers should evaluate the necessity and integration of such activities under 29 C.F.R. §§ 790.7-8.
- Timekeeping Policies: Employers should ensure that payroll systems and rounding practices align with federal and state laws, particularly 29 C.F.R. § 785.18, to avoid potential disputes over short-duration activities.