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Slaaen v. Senior Lifestyle Corp.

United States District Court, E.D. Wisconsin

April 9, 2019




         1. INTRODUCTION

         Plaintiffs filed this action on October 3, 2018, alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and Wisconsin's Wage Payment and Collection Laws, Wis.Stat. § 109.01 et seq., Wis.Stat. § 104.01 et seq., Wis.Stat. § 103.001 et seq., Wis. Admin. Code § DWD 274.01 et seq., and Wis. Admin. Code § DWD 272.001 et seq. Plaintiffs seek to bring their FLSA claim on a class basis, which in the parlance of the FLSA is called a collective action. See 29 U.S.C. § 216(b). On February 23, 2019, they filed a motion for conditional certification of their FLSA claim as a collective action. (Docket #25). Defendants oppose conditional certification. (Docket #32). The motion is now fully briefed and, for the reasons explained below, conditional certification will be granted.

         2. RELEVANT FACTS

         Defendant Senior Lifestyle Corporation (“SLC”) operates numerous assisted living centers across the country. Plaintiffs worked at one such facility in Greenfield, known as “Hickory Park.” Plaintiffs contend that SLC failed to pay its employees, including Plaintiffs, at the proper rate when those employees worked overtime. Specifically, the FLSA requires employers to calculate overtime pay based on the employee's regular rate of pay. Plaintiffs maintain that SLC and its co-defendant, SL Greenfield LLC, paid certain non-discretionary bonuses to their employees at Hickory Park, but when it came time to pay those employees for overtime, the bonuses were not included in the employees' regular rate. Thus, the employees were shortchanged for their overtime.

         Plaintiffs assert that this improper overtime policy is uniform across SLC's national operations. For support, Plaintiffs offer their own testimony about the practices at Hickory Park. They also offer the testimony of Mary Tasche, who worked at SLC's Sheboygan facility as the director of sales and marketing. According to Plaintiffs and Tasche, the bonuses for which they were not properly compensated included Tour Bonuses (or Marketing Bonuses), Move-In Bonuses, Resident Referral Bonuses, Shift Bonuses, Quarterly Net Gain Bonuses, and Quarterly Occupancy Bonuses.

         As further support, Plaintiffs point to the testimony of Noel Pakulski (“Pakulski”), the executive director of Hickory Park, and Dave Richey (“Richey”), SLC's vice president of operations. According to Plaintiffs, Pakulski's testimony confirms that they were not properly paid with respect to the bonuses they earned at Hickory Park. As to SLC's national operations, Richey testified that the corporation's approach is to not pay overtime based on the employee's regular wages plus bonuses:

If it's a bonus, it's a bonus. It's not part of the regular pay. . . . You've got a regular rate of pay that's -- your rate of pay is $11 an hour, that's your rate of pay. You work overtime, time and a half, you get time and a half on that. You do something outside of, you know, what your normal process is or you do something different, then there would be a bonus for that.
. . .
So your question, if I remember it, was should bonuses be part of regular pay and I don't - it's a bonus. It's not part of regular pay. So that's my statement. . . . If there's a bonus, it's a bonus. It's outside of normal pay.

(Docket #29-3 at 81-82, 85). Finally, Plaintiffs note that SLC maintains a “FLSA Overtime and Payroll Practices Policy” which is silent on the matter of properly computing bonuses into overtime pay. (Docket #29-2 at 121-22).

         Defendants counter that each assisted living facility operates with relative independence. As Defendants describe it, the facilities are like franchises; each executive director runs their own facility as they see fit, and pays SLC for various support services, including human resources, marketing, and sales. Important to this case is the executive directors' freedom to set pay for their employees and determine bonuses. SLC offers various “standards” for certain bonuses, but these are mere suggestions for how a particular bonus should be structured. See Id. at 123-28. SLC does not dictate what bonuses must be offered or how bonuses should be paid. Indeed, when told about the Tour Bonus policy at Hickory Park, Richey said that he was not aware that it was being offered. Plaintiffs rejoin that in her deposition, Pakulski indicated that bonuses over a certain dollar threshold would need approval from SLC.

         3. ANALYSIS

         3.1 ...

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