Borup v. The CJS Solutions Group, LLC

Background

The related cases concern workers whom The CJS Solutions Group, LLC, doing business as The HCI Group, assigned to assist with the Mayo Clinic’s transition to a computerized patient-management system. The Borup plaintiffs were medically trained workers, including physicians, medical residents, and medical students. They argued that HCI misclassified them under the Fair Labor Standards Act and that their travel time should count as paid work time. The Vallone plaintiffs argued that HCI had to pay for travel between remote locations and the Mayo Clinic and for time connected to training that HCI cancelled after the workers had traveled to Rochester.

The court had conditionally approved a Fair Labor Standards Act collective in Vallone, but notice had not yet been sent. The Borup plaintiffs had not moved to certify either a Fair Labor Standards Act collective or a class under Rule 23, although other individuals had opted into the case.

Motions to Compel Arbitration

HCI moved to compel arbitration in both cases. The court held that it, rather than an arbitrator, should decide whether HCI waived arbitration by litigating in court. The court applied a three-part test: whether HCI knew about its arbitration right, acted inconsistently with that right, and prejudiced the plaintiffs through its inconsistent conduct.

The court found that HCI knew by October 2018 that employees had begun signing arbitration agreements. HCI nevertheless litigated discovery disputes, sought a stay, pursued related appeals, and filed a partial summary-judgment motion without asserting arbitration. In Vallone, HCI waited even longer before moving to compel arbitration. The court concluded that HCI substantially used the court’s litigation process before asserting arbitration and that the plaintiffs were prejudiced by extensive discovery, motion practice, and litigation expenses. The court therefore denied both motions to compel arbitration.

Motion to Dismiss in Borup

HCI sought dismissal of the nationwide misclassification allegations and the claims of opt-in plaintiff Jonathan Backers, who did not work on the Mayo project, based on lack of personal jurisdiction. Personal jurisdiction means the court’s power to exercise authority over the defendant for the claims at issue.

The court assumed, without deciding, that HCI had not waived the defense merely by failing to plead it clearly in its answer. But the court found that HCI waived the defense through its conduct. HCI waited nearly two years to raise personal jurisdiction and sought a substantive ruling without asserting that the court lacked jurisdiction. The court therefore denied HCI’s amended motion to dismiss.

Summary Judgment in Vallone

Summary judgment is a ruling that resolves a claim when the relevant facts do not require a trial. HCI sought summary judgment on the Vallone plaintiffs’ travel-time claim and cancelled-training claim.

For travel time, the court held that the plaintiffs were not HCI employees when they traveled to Rochester because their employment for the project had not yet begun. The court also held that, even if they were considered employees during the travel, the Portal-to-Portal Act did not require payment for this travel. The plaintiffs were traveling to the worksite, not substituting travel for other work duties. The court granted summary judgment on this part of the motion. The court stated that this meant the nationwide class allegations could not proceed because the remaining cancelled-training claim concerned only individuals who worked for HCI at the Mayo Clinic.

For the cancelled-training claim, the court held that the workers were engaged to wait on April 30, 2018. They had traveled to Rochester expecting to work and were required to remain in or near Rochester, so they could not use the time effectively for their own purposes. The court denied summary judgment on this issue and held that HCI was obligated to pay them for that day.

Disposition

The court ordered that HCI’s motions to compel arbitration were DENIED; HCI’s amended motion to dismiss in Borup was DENIED; and HCI’s amended motion for summary judgment in Vallone was GRANTED in part and DENIED in part.

Judge Paul A. Magnuson signed the memorandum and order.