537 F.Supp.3d 195
D.R.I.2021Background:
- Four corporate medical practices (single FLSA enterprise) owned/controlled by Dr. Anthony Farina, Jr.; Brenda Delsignore was practice manager/administrator.
- From July 2015, defendants generally did not pay overtime unless preauthorized; records show instances of unpaid overtime the defendants knew about.
- Employer timekeeping practices: automatic 30-minute lunch deductions even when employees clocked out; some employees required to report early but not paid until later; failure to combine hours worked at multiple locations.
- Payroll records miscategorized apparent overtime payments as “Other”/“Miscellaneous” and often paid at straight time; time/pay records were incomplete or not timely produced to DOL.
- DOL sued; Secretary moved for partial summary judgment seeking (inter alia) liability for overtime violations, liquidated damages, employer status of defendants, recordkeeping violations, willfulness, and an injunction.
Issues:
| Issue | Walsh's Argument | Defendants' Argument | Held |
|---|---|---|---|
| Overtime liability | Defendants failed to pay required 1.5x for hours >40 and had knowledge | Errors/oversights but some denials were isolated/technical | Granted as to liability; damages and exemption claims reserved for trial |
| Employer status of Farina & Delsignore | Both exercised control over hiring, pay, schedules and overtime approvals | Delsignore lacked ownership interest (argued) | Farina and Delsignore are employers under FLSA (granted) |
| Recordkeeping violations | Failed to record actual hours and accurate wage categories; did not keep accessible records | Claimed practices were to address punch-out problems / oversights | Granted: violated 29 C.F.R. §§516.2, 516.5–516.7 and related FLSA provisions |
| Willfulness | Practices (auto deductions, miscategorization, refusal to pay unapproved OT) show reckless or knowing violation | At least some violations resulted from oversight or human error | Denied summary judgment on willfulness (factual dispute for jury) |
| Liquidated damages | Entitled absent good-faith defense | Asserted good-faith/oversight defenses | Denied summary judgment on liquidated damages (fact issue remains) |
| Injunctive relief | Ongoing practices justify permanent injunction | Violations were isolated/errors; no remedial showing | Court granted permanent injunction against future FLSA overtime and recordkeeping violations |
Key Cases Cited
- Manning v. Boston Medical Center Corp., 725 F.3d 34 (1st Cir. 2013) (standards for proving overtime liability and employer status under FLSA)
- Donovan v. Agnew, 712 F.2d 1509 (1st Cir. 1983) (economic reality test for employer status)
- Chao v. Hotel Oasis, Inc., 493 F.3d 26 (1st Cir. 2007) (factors for employer status and liquidated damages defense)
- Baystate Alternative Staffing, Inc. v. Herman, 163 F.3d 668 (1st Cir. 1998) (focus on officers’ role in causing underpayment)
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (U.S. 1988) (definition of willfulness for FLSA statute of limitations)
- Reich v. Newspapers of New England, Inc., 44 F.3d 1060 (1st Cir. 1995) (injunctive authority under the FLSA)
- Casas Office Machines, Inc. v. Mita Copystar America, Inc., 42 F.3d 668 (1st Cir. 1994) (summary judgment limits where factual weighing required)