Onate v. AHRC Health Care, Inc.

Background

Antonio Onate Jr. brought this action against AHRC Health Care, Inc. and Care Design NY, LLC, on behalf of himself and a proposed group and class of similarly situated employees. The claims against Care Design had already settled. The complaint alleged that AHRC used improper wage practices, including paying employees based on scheduled hours rather than actual clock-in and clock-out times, rounding time in a way that reduced credited work time, and automatically deducting meal-break time even when employees were working.

The complaint proposed a Fair Labor Standards Act collective group covering three years and a New York class covering six years. The proposed group included hourly employees who were not fully paid for time worked before or after scheduled shifts, during meal breaks, or over 40 hours in a week.

Discovery dispute

AHRC objected to class discovery in part because Onate was salaried and, according to AHRC, was not within the complaint’s definition limited to hourly, non-exempt employees. Onate responded that he was a non-exempt salaried employee and argued that both salaried and hourly employees could be included because they were subject to the same timekeeping practices.

Magistrate Judge Kevin Nathaniel Fox ruled during a discovery hearing that the complaint focused on the alleged practice of scheduling employees for a set period, having them work outside that period, and failing to pay for that additional time. Judge Fox did not limit discovery to one job title or location. AHRC later produced a list of 760 hourly employees and said the list included employees paid based on scheduled hours rather than actual clocked time.

After further discovery, Onate argued that the list was incomplete because evidence showed that both non-exempt salaried and hourly employees may have been subject to the same practices. Magistrate Judge Jennifer Willis denied that request, concluding that the dispute had already been litigated before Judge Fox.

Review of Judge Willis’s order

Onate objected to Judge Willis’s order. The applicable standard allowed the objection to succeed only if the order was clearly erroneous or contrary to law. Judge Schofield overruled the objections to the extent Onate sought to relitigate the original definition of the proposed class. She held that Judge Fox’s ruling, and Judge Willis’s adherence to it, were not clearly erroneous on that issue. Judge Schofield also stated that any direct challenge to Judge Fox’s ruling was untimely.

Judge Schofield sustained the objections, however, to the extent Onate sought a list that included non-exempt hourly employees as well as non-exempt salaried employees who were subject to the alleged time-rounding and scheduled-hours practices. She held that hourly employees could have scheduled hours that excluded meal breaks and could have claims covered by the complaint if time rounding was used to avoid paying for work before or after scheduled hours or during meal breaks. Those claims were included regardless of whether the employees were scheduled to work 40 hours per week.

The court further held that Judge Fox had not decided whether AHRC’s list of 760 names included everyone within the proposed class, and had not limited the proposed class to salaried employees. Judge Schofield ordered that AHRC should be compelled to produce a list consistent with the complaint’s definition, in consultation with Onate about the search terms or criteria used. If necessary, Onate was to be permitted to obtain discovery about whether and to what extent non-exempt hourly employees were subject to the alleged practices.

Disposition and significance

The court ordered that Onate’s objections were SUSTAINED in part and OVERRULED in part. The matter was reversed in part and remanded for further proceedings consistent with the order. The order addressed the scope of discovery and the proposed class definition; it did not decide whether AHRC violated wage laws or certify the proposed class.