D. BROCK HORNBY

DECISION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT

AND FOR PARTIAL SUMMARY JUDGMENT

The plaintiffs provided care in Maine to clients of Granite Bay Care, Inc. ("Granite Bay Care") with disabilities. They did so under two job titles—Adult Foster Care Provider ("Provider") and Direct Support Professional. They have sued Granite Bay Care, a second corporation, and Granite Bay Care's corporate officers and shareholders for unpaid wages and overtime through 2011 under Maine and federal law, on the basis that they worked over 40 hours per week. The two officers/shareholders and the second corporation have moved for summary judgment on all claims on the basis that they were not the plaintiffs' "employers" under either federal or state law; the plaintiffs have moved for summary judgment on the proposition that both corporations were employers. I grant the second corporation's motion on all claims and deny the plaintiffs' motion. I grant the individual defendants' motion on the state claim, but deny it on the federal claim. Both corporations and the two individual defendants also have moved for summary judgment on the federal claim, on the basis that they relied in good faith on a Department of Labor ruling or interpretation. I deny that motion. The plaintiffs have moved for summary judgment on their state law claim against all the defendants. I grant that motion as against Granite Bay Care.

The triable issues remaining are liability on the federal claim, whether the individuals can be treated as employers under federal law, and damages.

UNDISPUTED FACTS GENERALLY

At all relevant times, Granite Bay Care was a for-profit business that provided residential services for persons with mental disabilities. Stipulated Facts ¶¶ 38, 40, 43 (ECF No. 53). Kasai Mumpini and Caroletta Alicea were its only shareholders and corporate officers. Defs.' Statement of Material Facts ("DSMF I") ¶ 5 (ECF No. 62); Pls.' Statement of Material Facts in Opp'n to Defs.' Statement of Material Facts ("Pls.' Resp. I") ¶ 5 (ECF No. 68). Granite Bay Care's purpose was "to assist individuals with disabilities to realize their fundamental right to obtain their goals and enhance their quality of life." Stipulated Facts ¶ 38. Granite Bay Care provided care and support by setting up private homes for the disabled individuals. Stipulated Facts ¶ 17. To carry out its purpose, Granite Bay Care engaged various categories of personnel—among them, Adult Foster Care Providers, Direct Support Professionals, and Respite Workers. Stipulated Facts ¶ 41.

Granite Bay Connections, Inc., was a nonprofit entity that provided comparable services in New Hampshire. DSMF I ¶ 11; Pls.' Resp. I ¶ 11. (To distinguish it from Granite Bay Care, I will refer to it as "Granite Bay New Hampshire.") Mumpini and Alicea were also officers and directors of that nonprofit corporation. Id.

Granite Bay Care compensated Providers by a stipend. Stipulated Facts ¶ 5. The Provider contracts required that the Providers be responsible for the care of the disabled client twenty-four hours per day, five days per week between Sunday at 4:00 p.m. and Friday at 4:00 p.m. Stipulated Facts ¶¶ 2, 34. Granite Bay Care provided "Respite Workers" for the remaining period of time (between Friday at 4:00 p.m. and Sunday at 4:00 p.m.) unless the Provider remained in the home with the client over the weekend. Stipulated Facts ¶ 4. The Direct Support Professionals, on the other hand, worked Mondays to Fridays, 8 a.m. to 4 p.m., and Granite Bay Care paid them by the hour. Stipulated Facts ¶¶ 3, 7. Granite Bay Care did not require Providers to work as Direct Support Professionals, but gave them the option to do so. Stipulated Facts ¶ 3. These plaintiffs served in both roles. Stipulated Facts ¶ 33.

ANALYSIS

In Part I, I deal with the argument of some defendants that they cannot be liable because they were not the plaintiffs' employer. In Part II, I determine whether the defendants have an affirmative good faith defense to federal liability. In Part III, I deal with whether the plaintiffs have established liability on their state law claim.

I. Were Mumpini, Alicea, and Granite Bay New Hampshire Employers and Therefore Liable Under Federal or State Law?

A. The Individuals Kasai Mumpini and Caroletta Alicea

(1) Federal Fair Labor Standards Act ("FLSA") Claim

To establish liability on their FLSA claim, the plaintiffs must show that a particular defendant that they are suing is their employer. 29 U.S.C. § 207. The FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d).

The First Circuit has observed that "[t]aken literally this [section 203(d) definitional] language would support liability against any agent or employee with supervisory power over other employees." Donovan v. Agnew, 712 F.2d 1509, 1510 (1st Cir. 1983). But the First Circuit also said that it would not lightly infer that the conventional corporate shield to personal liability should be disregarded, and that it was "difficult to accept . . . that Congress intended that any corporate officer or other employee with ultimate operational control over payroll matters be personally liable . . . ." Id. at 1513. Instead, Agnew adopted an "economic reality" approach to who is an employer under the FLSA. Id. at 1514. Agnew found FLSA liability for "corporate officers with a significant ownership interest who had operational control of significant aspects of the corporation's day to day functions, including compensation of employees, and who personally made decisions to continue operations despite financial adversity during the period of nonpayment." Id. (citation omitted). Baystate Alt. Staffing, Inc. v. Herman, 163 F.3d 668, 677 (1st Cir. 1998), confirmed the Agnew approach. Baystate said that the facts in Agnew "relevant to the personal liability determination" were (1) "the significant ownership interest of the corporate officers"; (2) "their operational control of significant aspects of the corporation's day to day functions, including compensation of employees"; and (3) "the fact that they personally made decisions to continue operating the business despite financial adversity and the company's inability to fulfill its statutory obligations to its employees." Id. at 677-78. The First Circuit continued this approach once again in Chao v. Hotel Oasis, Inc., 493 F.3d 26 (1st Cir. 2007).

Agnew makes ownership a factor, but does not specify how important it is. Other circuits say that alone it is not enough and that neither ownership nor ultimate authority is determinative. See, e.g., Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150, 1161 (11th Cir. 2008) (president/majority shareholder not an employer because he was not involved in the supervision, hiring, firing, or compensation of employees; even if president could have played a greater role in day-to-day operations, "unexercised authority is insufficient to establish liability as an employer" (citation omitted)); Patel v. Wargo, 803 F.2d 632, 638 (11th Cir. 1986) (president/majority shareholder not "involved in the day-to-day operation of the facility," regardless of whether he "might have played a greater role" given his status as president); Wirtz v. Pure Ice Co., 322 F.2d 259, 262-63 (6th Cir. 1963) ("There is little question from the record but what Thompson as the majority stockholder and dominant personality in Pure Ice Company, Inc., could have taken over and supervised the relationship between the corporation and its employees had he decided to do so. A careful reading of the record, however, indicates that he did not do so.").

On the control factor, Agnew and its progeny focus on the day-to-day operational control that corporate officers directly and personally exercise (as opposed to ultimate operational control that a president/CEO routinely has by virtue of the office). See, e.g., Agnew, 712 F.2d at 1511, 1514 ("directly involved in decisions affecting employee compensation"; "operational control of significant aspects of the corporation's day to day functions"); Baystate, 163 F.3d at 678 ("authority to manage certain aspects of the business's operations on a day-to-day basis"; "personal responsibility for making decisions about the conduct of the business that contributed to the violations of the Act"); Hotel Oasis, 493 F.3d at 34 ("corporate officer principally in charge of directing employment practices"); see also Alvarez Perez, 515 F.3d at 1160 ("[I]n order to qualify as an employer for this purpose, an officer 'must either be involved in the day-to-day operation or have some direct responsibility for the supervision of the employee.'" (quoting Patel, 803 F.2d at 638)); Wirtz, 322 F.2d at 263 ("That he might have taken over and acted . . . in the interest of an employer (the corporation) in relation to an employee' is beside the point as long as he did not do so.").

On the third factor, the First Circuit concerns itself with who was "instrumental in 'causing' the corporation to violate the FLSA." Hotel Oasis, 493 F.3d at 34 (citations omitted); see also Baystate, 163 F.3d at 678 ("the personal responsibility for making decisions about the conduct of the business that contributed to the violations of the Act"); Agnew, 712 F.2d at 1514 ("who personally made decisions to continue operations despite financial adversity during the period of nonpayment" (citation omitted)).

I now address each of these three factors in turn, recounting the undisputed facts relevant to each of the legal principles.

(i) Ownership

This factor requires relatively little discussion. Mumpini and Alicea were Granite Bay Care's sole shareholders and corporate officers. DSMF I ¶ 5; Pls.' Resp. I ¶ 5. Although the cases discussed above indicate that mere ownership status alone does not suffice to establish personal liability as an employer, this factor nevertheless militates toward a finding of personal liability.

(ii) Day-to-Day Operational Control

Mumpini and Alicea employed a State Director for Granite Bay Care. Pls.' Additional Statement of Material Facts ("PASMF I") ¶ 2 (ECF No. 68); Defs.' Resp. to Pls.' Additional Statement of Material Facts ("Defs.' Resp. I") ¶ 2 (ECF No. 84). The State Director answered only to Mumpini and Alicea. PASMF I ¶ 1; Defs.' Resp. I ¶ 1. He had authority to manage all aspects of Granite Bay Care's business, including personnel and compensation decisions, subject to Mumpini's and Alicea's advice and consent. DSMF I ¶ 6; Pls.' Resp. I ¶ 6. He made all operational and managerial decisions involving Granite Bay Care's daily operations. DSMF I ¶ 9; Pls.' Resp. I ¶ 9. He kept Mumpini and Alicea informed of the daily management of Maine operations, relaying that information through daily e-mails and communications, as well as at in-person meetings each Monday, and at monthly director and executive management meetings at which he informed Mumpini and Alicea of staff hiring and firing decisions. PASMF I ¶¶ 5, 38; Defs.' Resp. I ¶¶ 5, 38. He forwarded to them everything that he ever did. PASMF I ¶ 8; Defs.' Resp. I ¶ 8. He informed them of the details of state funding, staff compensation models, and changes that he had proposed in Medicaid funding requests to the State of Maine, as well as the financial impact of certain issues, responding on at least one occasion to a request for financial information. PASMF I ¶ 9; Defs.' Resp. I ¶ 9.

Mumpini periodically issued memoranda to Granite Bay Care staff with respect to mandated reporting obligations, disaster protocols, professional attire, and change from bimonthly to monthly payment of stipends. PASMF I ¶ 19; Defs.' Resp. I ¶ 19. The State Director initiated and prepared certain of the communications issued in Mumpini's name. DSMF I ¶ 38; Pls.' Resp. I ¶ 38. He, rather than Alicea or Mumpini, dealt with Granite Bay Care's attorney on issues regarding compensation and the Department of Labor. DSMF I ¶ 35; Pls.' Resp. I ¶ 35. Mumpini never reviewed agendas for Granite Bay Care's executive management meetings because he did not run the meetings. DSMF I ¶ 41; Pls.' Resp. I ¶ 41.

I conclude that this Agnew factor favors the defendants. Although there was an approval structure in place by which Mumpini and Alicea could monitor the company's finances, although Mumpini held the ultimate authority inherent to his position as president and CEO, and although the State Director kept them fully informed, the plaintiffs have failed to establish that the owners exercised daily operational control or were directly and personally involved in day-to-day compensation decisions. Mumpini, Alicea, and the State Director himself all testified that the State Director had full authority over the company's day-to-day operations, including employment and compensation matters, and that Mumpini and Alicea were not involved in those decisions. Although the State Director met with Mumpini and Alicea in monthly executive management meetings, he testified that the meetings were not directive, and the plaintiffs have identified no evidence to the contrary; indeed, the parties agree that Mumpini did not run these meetings. And while Mumpini sometimes issued memoranda to Granite Bay Care staff (some of which were actually prepared by the State Director in Mumpini's name), that indicates at best an occasional involvement insufficient to call into question the State Director's role as the primary day-to-day decision-maker.

The evidence thus fails to show that the owners had day-to-day involvement in Granite Bay Care's operations, and only reveals the kind of ultimate supervisory authority inherent to ownership.

(iii) Role in Causing FLSA Violation

As president and CEO, Mumpini had the ultimate decision on Granite Bay Care's staffing systems. PASMF I ¶ 4; Defs.' Resp. I ¶ 4. When Granite Bay Care was formed, Mumpini and Alicea decided to use the same staffing model that Granite Bay New Hampshire already used, with Adult Foster Care Provider, Direct Support Professional, and Respite Worker positions. PASMF I ¶¶ 12, 14; Defs.' Resp. I ¶¶ 12, 14. They authorized Granite Bay Care management to use the Adult Foster Care Provider contracts with staff. PASMF I ¶ 16; Defs.' Resp. I ¶ 16. As a result, at its inception Granite Bay Care compensated Adult Foster Care Providers and Respite Workers by stipend as independent contractors and compensated Direct Support Professionals on an hourly basis as employees. PASMF I ¶ 15; Defs.' Resp. I ¶ 15. From 2006 to 2011, although Alicea and Mumpini did not have an ongoing discussion about whether Granite Bay Care staff would be paid by stipend or by the hour, the State Director discussed this issue with them at different times. DSMF I ¶ 31; Pls.' Resp. I ¶ 31.

In 2006, the State Director provided Mumpini and Alicea with information on comparative costs of compensating Provider staff by stipend and by the hour, and he decided to change the compensation of Respite Workers to an hourly pay rate and to treat the Respite staff in the future as employees, a decision that Mumpini and Alicea supported. PASMF I ¶ 21; Defs.' Resp. I ¶ 21. When the United States Department of Labor raised issues over Granite Bay Care's staff compensation policy in 2007, the State Director discussed the policy with Mumpini and Alicea, and kept them updated on the Department of Labor's actions and on communications from Granite Bay Care's attorney. DSMF I ¶ 23; Pls.' Resp. I ¶ 23; PASMF I ¶ 22; Defs.' Resp. I ¶ 22. After the Department of Labor concluded that Respite Workers were not exempt from overtime requirements, Mumpini and Alicea approved Granite Bay Care's agreement to pay the overtime wages that the Department of Labor informed them were owed. PASMF I ¶¶ 31-32; Defs.' Resp. I ¶¶ 31-32. Alicea believed that they had no choice but to do what the Department of Labor told them. PASMF I ¶ 32; Defs.' Resp. I ¶ 32.

In 2010, Granite Bay Care's State Director informed Mumpini and Alicea of pending Maine Department of Health and Human Services ("DHHS") cuts to the room-and-board subsidy paid to Granite Bay Care. PASMF I ¶ 25; Defs.' Resp. I ¶ 25. Mumpini asked him to provide a comprehensive review of room-and-board subsidies and provider contract details. PASMF I ¶ 26; Defs.' Resp. I ¶ 26. He did so, informing Mumpini and Alicea that the bottom line percentage cut in the room-and-board subsidy was 22.5 percent. PASMF I ¶¶ 26-27; Defs.' Resp. I ¶¶ 26-27. Mumpini and Alicea requested that the overall loss from the DHHS reduction be made up in other areas, and that an overall percentage of funds be maintained. PASMF I ¶ 28; Defs.' Resp. I ¶ 28. Prior to proposing changes in the staffing and compensation model for caregiving staff to DHHS, the State Director informed Mumpini and Alicea of the details of the proposed new staffing model. PASMF I ¶ 29; Defs.' Resp. I ¶ 29.

Also in 2010, the United States Department of Labor informed Granite Bay Care that it owed overtime wages to Adult Foster Care Providers. PASMF I ¶ 33; Defs.' Resp. I ¶ 33. Granite Bay Care's State Director subsequently provided Mumpini and Alicea with materials comparing the respective costs of compensating staff by stipend and by the hour. PASMF I ¶ 34; Defs.' Resp. I ¶ 34. (The State Director had previously presented Mumpini and Alicea with cost comparisons of different staff compensation models in 2006 and 2008. PASMF I ¶ 37; Defs.' Resp. I ¶ 37.) Alicea testified that in 2010 she began looking into changing the method of compensation and that she eventually decided to change staff compensation to an hourly rate of pay. PASMF I ¶¶ 33, 35; Defs.' Resp. I ¶¶ 33, 35.

Thus, although I have concluded that Alicea and Mumpini were not involved in the quotidian operations of Granite Bay Care, the evidence is sufficient to raise factual questions as to their role in causing the FLSA violations asserted in this lawsuit. They may have delegated the daily operational decisions to the State Director, but triable questions remain as to their role in some of the more momentous decisions regarding the company's compensation model. The plaintiffs have introduced evidence that Mumpini and Alicea were not merely aware of Granite Bay Care's staffing model, but that they in fact made the decision to use that model in Maine, i.e., authorized Granite Bay Care management to enter into Adult Foster Care Provider contracts with staff. Even accepting the defendants' qualification that the State Director had authority and discretion to change the compensation scheme, that does not refute the basic fact that the original decision was that of Mumpini and Alicea, not the State Director. In other words, they had "personal responsibility for making decisions about the conduct of the business that contributed to the violations of the [FLSA]" if they made the decision to implement the very compensation scheme at issue here. Baystate, 163 F.3d at 678.

Furthermore, even though I have concluded that the plaintiffs have not shown evidence that Mumpini and Alicea were involved in the day-to-day operations of Granite Bay Care, they have pointed to several instances of involvement at significant junctures. In 2007, Mumpini and Alicea approved the payment of overtime wages to Respite Workers following a Department of Labor investigation. In 2010, they requested that a specified percentage of funds be maintained in the wake of DHHS cuts. Perhaps most significantly, Alicea's deposition testimony is at least ambiguous as to whether it was they who made the decision to change staff compensation following the second Department of Labor investigation in 2010.

That is more than enough to raise genuine questions as to whether Mumpini and Alicea made the business decisions resulting in the FLSA violations asserted here. Thus, even though the second Agnew factor favors them due to their lack of daily involvement, a factfinder still might conclude that Mumpini and Alicea were "employers" within the ambit of the FLSA due to their ownership interest and their role in implementing the compensation scheme that assertedly violates the FLSA. See Hotel Oasis, 493 F.3d at 34 ("instrumental in 'causing' the corporation to violate the FLSA"). I therefore deny Mumpini's and Alicea's motion for summary judgment.

(2) Maine Law Claim

Unlike the FLSA, Maine's wage and hour law does not define the term "employer," and the parties dispute whether an individual supervisor can ever be held liable as an employer. On the one hand, Maine's Law Court has stated that in interpreting Maine's wage and hour law, when "a term is not defined in either the relevant statutory provisions or in prior decisions of this court, Maine Courts may look to analogous federal statutes, regulations, and case law for guidance." Gordon v. Me. Cent. R.R., 657 A.2d 785, 786 (Me. 1995) (citation omitted). Indeed, the Law Court has held that in applying Maine's statute, a trial court did not err in analogizing to FLSA caselaw on employer status (including Agnew) and in holding various interrelated corporate entities liable as "joint employers" under an "economic reality" analysis. Dir. of the Bureau of Labor Standards v. Cormier, 527 A.2d 1297, 1299-1300 (Me. 1987).

But on the other hand, the First Circuit has consistently recognized the extraordinarily broad scope of FLSA coverage. In Bayside, for instance, the First Circuit noted that the FLSA's definitions of "employ," "employer," and "employee"

"[are] comprehensive enough to require [their] application to many persons and working relationships, which prior to this Act, were not deemed to fall within an employer-employee category." Moreover, the remedial purposes of the FLSA require courts to define "'employer' more broadly than the term would be interpreted in traditional common law applications."

Although the Law Court did rely on Agnew and its "economic reality" analysis in upholding joint employer liability for multiple corporations in Cormier, extending liability to individual shareholders and officers represents a far more drastic step. Doing so would run counter to the general principle that "'corporations are separate legal entities with limited liability,'" a principle that leaves Maine courts "'generally reluctant to disregard the legal entity.'" Johnson v. Exclusive Props. Unlimited, 720 A.2d 568, 571 (Me. 1998) (citations omitted). The plaintiffs have not shown the abuse of the corporate form and unjust or inequitable consequences necessary to pierce the corporate veil and hold individual shareholders liable. See id. (recognizing "two common elements that a plaintiff must establish before a court will disregard the corporate entity: (1) some manner of dominating, abusing, or misusing the corporate form; and (2) an unjust or inequitable result that would arise if the court recognized the separate corporate existence" (citations omitted)).

Given both the Maine legislature's silence on the definition of "employer" and the reluctance of Maine courts to hold shareholders individually liable, I decline to extend liability under Maine's wage and hour law to individual shareholders and officers.

B. Granite Bay New Hampshire

I recount additional undisputed facts that bear on whether Granite Bay New Hampshire was an employer of these Maine plaintiffs.

Mumpini and Alicea, the directors of the profit-making Granite Bay Care, were also the directors of Granite Bay New Hampshire, a nonprofit that provided in New Hampshire services comparable to those that Granite Bay Care provided in Maine. DSMF I ¶ 11; Pls.' Resp. I ¶ 11; PASMF I ¶¶ 40-41; Defs.' Resp. I ¶¶ 40-41. In structuring Granite Bay Care, the Maine State Director simply copied the Adult Foster Care Provider staffing model already used in New Hampshire. PASMF I ¶ 13; Defs.' Resp. I ¶ 13. He received a copy of the personnel handbook used by Granite Bay New Hampshire, adapted it to Maine, and later revised it in conjunction with Granite Bay Care's executive management (i.e., all of the people under his direction), although not with Mumpini and Alicea. DSMF I ¶ 40; Pls.' Resp. I ¶ 40; Gregory Robinson Dep. Sept. 12, 2012 ("Robinson Dep. II") 8:21-9:3 (ECF No. 62-11). During the first six months of Granite Bay Care's existence from 2004 to 2005, Granite Bay New Hampshire provided support staff to Granite Bay Care, namely a payroll administrator who provided joint oversight. PASMF I ¶¶ 42-43; Defs.' Resp. I ¶¶ 42-43. The management of both companies held monthly joint executive strategic planning meetings with Mumpini and Alicea. PASMF I ¶ 44; Defs.' Resp. I ¶ 44.

But separate State Directors managed the companies' daily operations, and these separate State Directors made all the decisions on personnel and compensation for their respective companies. DSMF I ¶ 12; Pls.' Resp. I ¶ 12. Each company had exclusive responsibility over its own employees and contractors, and had the power to hire, promote, discipline, and terminate its own employees but not the employees or contractors of the other company. DSMF I ¶ 45; Pls.' Resp. I ¶ 45. Each company individually supervised and controlled the work schedules, conditions, and contractual terms of its respective employees and contractors, but not those of the other company's employees or contractors. DSMF I ¶ 46; Pls.' Resp. I ¶ 46. Each entity individually determined the rate and method of compensation of its own employees and contractors, but not those of the other entity's employees and contractors. DSMF I ¶ 47; Pls.' Resp. I ¶ 47. The companies independently and separately handled human resource matters and decisions, and maintained separate files, records, and contracts pertaining to their employees, contractors, and business operations. DSMF I ¶¶ 47-48; Pls.' Resp. I ¶¶ 47-48. The two corporations were not required to coordinate with one another on any decisions. DSMF I ¶ 50; Pls.' Resp. I ¶ 50. Granite Bay Care supported its own business, financial, human resources, and operational needs on its own, and did not rely on Granite Bay New Hampshire for support beyond the first six months of its existence. DSMF I ¶ 51; Pls.' Resp. I ¶ 51.

The plaintiffs generally viewed Granite Bay Care as their employer, and did not have a firm understanding of what Granite Bay New Hampshire was. DSMF I ¶ 52; Pls.' Resp. I ¶ 52. However, the plaintiffs signed non-disclosure, non-competition, and non-disparagement agreements that named both Granite Bay Care and Granite Bay New Hampshire as a contracting party ("Vendor") and stated, "Provider has requested that . . . Vendor pay Employee a bimonthly stipend for the services performed by Provider as specified in Provider Contract ('Compensation')." PASMF I ¶ 45; Defs.' Resp. I ¶ 45; Contract of Sharon McCarron at 840 (ECF No. 53-1). This contract only named Granite Bay New Hampshire once, and despite the designation of Granite Bay New Hampshire as a "Vendor," the paragraph titled "Vendor's Business" only described the business of Granite Bay Care in Maine. McCarron Contract at 840-42. In signing the contract, the Provider agreed not to breach confidentiality or disparage either corporation, and not to compete in Maine with either corporation. Id.

(1) Federal Law Claim

I have already recounted the FLSA definition of "employer." Department of Labor regulations expressly contemplate the possibility of a joint employment relationship where an employee "stand[s] in the relation of an employee to two or more employers at the same time" and "employment by one employer is not completely disassociated from employment by the other employer(s)." 29 C.F.R. § 791.2(a). In that case, "all joint employers are responsible, both individually and jointly, for compliance" with the FLSA. Id. Does that principle apply here?

In Baystate, the First Circuit held that a temporary staffing agency was a joint employer of temporary workers alongside the agency's client companies, looking "not to the common law conceptions of [the employment] relationship, but rather to the 'economic reality' of the totality of the circumstances bearing on whether the putative employee is economically dependent on [his or her] alleged employer." 163 F.3d at 675 (citation omitted). The First Circuit reached its conclusion based on four factors: "whether the alleged employer (1) had the power to hire and fire the employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records." Id. (citation omitted). Applying those factors, the First Circuit observed that the temporary staffing agency there was "solely responsible for hiring the temporary workers" and "had the power to refuse to send a worker back to a job site where he or she had performed unsatisfactorily"; that the agency "controlled employee work schedules and conditions of employment," and "retained the authority to intervene if problems arose with a worker's job performance"; that it had "unfettered discretion in determining the rate and method of payment" and issued the workers' paychecks; and that it maintained all employment records. Id. at 675-76 (citations omitted).

In this case, all such authority was vested solely in Granite Bay Care, not Granite Bay New Hampshire. The plaintiffs have pointed to no evidence contradicting the Granite Bay Care Maine State Director's declaration that Granite Bay New Hampshire had no involvement in the hiring, promotion, discipline, and termination of Granite Bay Care employees; that Granite Bay New Hampshire did not interfere with Granite Bay Care's supervision and control of work schedules and conditions; and that Granite Bay Care maintained its own employment and business records. Furthermore, the parties agree that Granite Bay Care alone determined the rate and method of compensation of its own employees and contractors.

The plaintiffs' allegedly contradictory evidence consists of Mumpini's and Alicea's role as directors of both companies; the attendance at monthly strategic planning meetings by key individuals from both companies; the Maine State Director's adoption of the Granite Bay New Hampshire staffing model and personnel handbook for use in Maine; the payroll administrator's joint oversight over payroll matters during the first six months of Granite Bay Care's existence; and the naming of Granite Bay New Hampshire as a party to the non-disclosure/non-competition/non-disparagement contracts that the plaintiffs signed. I deal with each of those.

By itself, the common role played by Alicea and Mumpini in both companies is of little import to the Baystate factors in assessing whether Granite Bay New Hampshire is the plaintiffs' employer. Similarly, the fact that key individuals from both companies attended strategic planning meetings with Alicea and Mumpini does not establish that the companies had any authority over one another's employees; the plaintiffs do not point to any evidence indicating that Granite Bay New Hampshire's representatives somehow influenced Granite Bay Care's employment decisions at these meetings. The Maine State Director's use of the Granite Bay New Hampshire staffing model and handbook may demonstrate that the Granite Bay New Hampshire model was an important influence on his own decision-making as State Director of Granite Bay Care, but it does not suggest that Granite Bay New Hampshire exercised control over Granite Bay Care's employees. See Cavallaro v. UMass Mem'l Health Care, Inc., 2013 WL 360405, at *8 (D. Mass. Jan. 28, 2013) ("[T]he mere assertion that the corporations followed uniform policies is not sufficient to support any reasonable inference that they exercised control over [plaintiff's] compensation.").

The non-disclosure/non-competition/non-disparagement contracts are not enough to establish Granite Bay New Hampshire as the plaintiffs' employer. The plaintiffs do not point to any testimony contradicting Mumpini's and Alicea's statements that the designation of Granite Bay New Hampshire as a party to those contracts was simply a typographical error. Their sole evidence consists of the contract language, which only named Granite Bay New Hampshire once. Even viewing the contracts in the light most favorable to the plaintiffs and assuming the inclusion of Granite Bay New Hampshire was intentional, the plaintiffs do not allege that Granite Bay New Hampshire was a party to their actual employment contracts. And although the documents in question stated, "Provider has requested that . . . Vendor pay Employee a bimonthly stipend for the services performed by Provider as specified in Provider Contract ('Compensation')," McCarron Contract at 840, those documents did not provide for payment by either corporation. In short, those documents were neither employment agreements nor guarantees of compensation, and thus do not support the proposition that Granite Bay New Hampshire employed the plaintiffs.

As for the payroll administrator's brief oversight, that does not establish that Granite Bay New Hampshire controlled the compensation and rate and method of payment of Granite Bay Care employees, especially in light of the fact that the parties have elsewhere agreed that Granite Bay Care individually determined the rate and method of compensation of its employees. DSMF I ¶ 47; Pls.' Resp. I ¶ 47. In any event, even if this Bayside factor were to tilt slightly in the plaintiffs' favor, it does not alter the outcome, given that the other three factors overwhelmingly favor Granite Bay New Hampshire.

(2) Maine Law Claim

The plaintiffs ground their Maine law argument in the Law Court's decision in Cormier, which I summarized earlier. Unlike the First Circuit in Baystate, the Cormier court did not provide a precise formulation for its economic reality determination, noting only that it found "particularly compelling the fact that [one of the corporations] exercises, in effect, overall operational and administrative direction . . . through its centralized management functions." 527 A.2d at 1300. These functions included the hiring and payment of employees, advertisement of jobs, screening of job applicants, and conducting orientation for new employees. Id. at 1299.

No such centralized management existed in this case, and nothing in Cormier or subsequent caselaw indicates that the Maine Law Court's approach to economic reality in the case of joint employers would be more employee-favorable from the First Circuit's approach in Baystate. I therefore reach the same conclusion under Maine law as under federal law, and conclude that Granite Bay New Hampshire, not the plaintiffs, is entitled to summary judgment on the plaintiffs' state law claim.

II. Do the Defendants Have a Federal Good Faith Reliance Affirmative Defense?

29 U.S.C. § 259(a) creates a "good faith" defense to FLSA liability:

[N]o employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938 . . . if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation, of the agency of the United States specified in subsection (b) of this section [i.e., the Administrator of the Wage and Hour Division of the Department of Labor], or any administrative practice or enforcement policy of such agency with respect to the class of employers to which he belonged.

First, I recount additional undisputed facts pertinent to this motion.

In May 2007, the United States Department of Labor sent a letter to Granite Bay Care's lawyer initiating a payroll audit and requesting access to documents. Defs.' Statement of Material Facts ("DSMF II") ¶ 4 (ECF No. 64); Pls.' Statement of Material Facts in Opp'n to Defs.' Statement of Material Facts ("Pls.' Resp. II") ¶ 4 (ECF No. 70). The Department of Labor's investigation did not focus on Adult Foster Care Providers, but focused instead on Respite Workers, a category different from these plaintiffs' positions. Pls.' Additional Statement of Material Facts ("PASMF II") ¶ 1 (ECF No. 70); Defs.' Resp. to Pls.' Additional Statement of Material Facts ("Defs.' Resp. II") ¶ 1 (ECF No. 83). Granite Bay Care provided all its employee payroll files and contracts for Direct Support Professionals and Adult Foster Care Providers. DSMF II ¶ 5; Pls.' Resp. II ¶ 5. The Department of Labor Wage and Hour Investigator reviewed the documents and asked questions about the employees' contracts, including the contracts of the Adult Foster Care Providers. DSMF II ¶ 6; Pls.' Resp. II ¶ 6. The Investigator told Granite Bay Care's State Director that he was aware of the Adult Foster Care Provider business model because his sister received similar services. DSMF II ¶ 8; Pls.' Resp. II ¶ 8. During the course of the investigation, the Investigator interviewed Adult Foster Care Providers as well as Respite Workers. DSMF II ¶ 12; Pls.' Resp. II ¶ 12. After reviewing Granite Bay Care's files during the 2007 investigation, the Investigator compiled a list of names and reviewed them with Granite Bay's State Director, specifically asking which named individuals were Adult Foster Care Providers. DSMF II ¶ 9; Pls.' Resp. II ¶ 9. The Investigator removed those names from the list of individuals who he believed were entitled to overtime. Id. The individuals removed from the list worked both as Adult Foster Care Providers and as Direct Support Professionals. DSMF II ¶ 10; Pls.' Resp. II ¶ 10. The Investigator did not raise any concerns over this dual role. DSMF II ¶ 11; Pls.' Resp. II ¶ 11. At a meeting on August 30, 2007, the Investigator met with Granite Bay Care's State Director and explained his findings, focusing on the Respite Workers. DSMF II ¶ 13; Pls.' Resp. II ¶ 13. The Investigator also told the State Director that the Adult Foster Care Providers were "fine." Id.

On September 17, 2007, the Investigator sent an e-mail to Granite Bay Care's lawyer and attached a Department of Labor opinion that discussed the "companionship exemption" to the FLSA and set forth factors to consider in determining whether a residence was a private home to which the exemption applied. DSMF II ¶ 14; Pls.' Resp. II ¶ 14; PASMF II ¶ 10; Defs.' Resp. II ¶ 10. The Investigator concluded in the e-mail that the homes where Granite Bay Care's clients resided were not the private homes of the Respite Workers, so that the exemption did not apply to them. PASMF II ¶ 9; Defs.' Resp. II ¶ 9. The last paragraph of this e-mail stated that Adult Foster Care Providers who did not use Respite services could have their Respite care payment considered as an additional foster care stipend:

As I indicated at the meeting, my overtime back wage figures are subject to revision as circumstances warrant, such as for the instances [the State Director] mentioned with the adult foster care provider opting not to avail themselves of the respite care and instead being paid the respite care stipend themselves. In that case, I will instead consider the respite care payment as an additional foster care stipend.

On November 7, 2007, Granite Bay Care representatives, including its lawyer, met with Department of Labor representatives, including the Investigator and the Department of Labor District Director. DSMF II ¶ 17; Pls.' Resp. II ¶ 17. The District Director reviewed the Investigator's previous determinations, and Granite Bay Care's lawyer asked the District Director to state in writing that the Adult Foster Care Provider model was acceptable. DSMF II ¶ 18; Pls.' Resp. II ¶ 18. The District Director responded that the Department of Labor did not ordinarily do so, but that if Granite Bay Care sent such a letter, he would respond in writing if something in the letter were incorrect. Id.

After the meeting, the Department of Labor issued a letter of findings, which made no findings regarding Adult Foster Care Providers. DSMF II ¶ 19; Pls.' Resp. II ¶ 19. Granite Bay Care's lawyer in turn sent a letter to the District Director to "memorialize our mutual understanding of DOL's investigation and outcome." DSMF II ¶ 20; Pls.' Resp. II ¶ 20; PASMF II ¶ 19; Defs.' Resp. II ¶ 19. The letter set forth Granite Bay Care's position on the Adult Foster Care Providers and stated: "The DOL's investigation did not focus on the [Providers] or hourly workers and found no violations with regard to the [Providers] or hourly workers." DSMF II ¶¶ 20-21; Pls.' Resp. II ¶¶ 20-21. Granite Bay Care's State Director never received or was made aware of a Department of Labor response to the letter. DSMF II ¶ 22; Pls.' Resp. II ¶ 22. The Department of Labor sent follow-up e-mails seeking unrelated information from Granite Bay Care, but neither those e-mails nor a February 22, 2008 letter from DOL's District Director to Granite Bay Care's lawyer addressed or corrected the statement in the lawyer's letter regarding Adult Foster Care Providers. DSMF II ¶¶ 23-24; Pls.' Resp. II ¶¶ 23-24.

In 2010 the Department of Labor initiated another investigation of Granite Bay Care's employment practices, and initially concluded that the company's Adult Foster Care Providers were due overtime payments. DSMF II ¶ 27; Pls.' Resp. II ¶ 27. At a meeting between Granite Bay Care and Department of Labor representatives, Granite Bay Care's State Director contended that the company had acted in good faith based on the Department of Labor's review in 2007, and that the Department of Labor had misled Granite Bay Care into believing that its compensation model for Adult Foster Care Providers was viable. DSMF II ¶ 28; Pls.' Resp. II ¶ 28. After a series of meetings between the Department of Labor and Granite Bay Care regarding the issue, the Department of Labor took no further action. DSMF II ¶ 30; Pls.' Resp. II ¶ 30.

With that factual background, I turn to the requirements of the good faith defense. The defendants argue that the DOL Investigator's e-mail dated September 17, 2007 was a "ruling" to which they conformed in good faith reliance, thus qualifying them for an affirmative defense under § 259(a). The plaintiffs respond both that the e-mail does not constitute a "ruling" under § 259(a) and that in any event, Granite Bay Care did not rely on it in good faith. Because I conclude that the Investigator's e-mail does not fit section 259(a) as a ruling or interpretation, I need not rule on the good faith issue.

Courts are divided on whether a DOL Investigator's interpretation can ever constitute a "ruling, approval, or interpretation, of the agency" (emphasis added) within the meaning of § 259(a). The Department of Labor's view is that

where the "agency" whose regulation, order, ruling, approval, interpretation, administrative practice or enforcement policy may be relied on is confined to "the agency of the United States" specified in the section, the Act expressly limits the meaning of the term to the official or officials actually vested with final authority under the statutes involved. . . . Furthermore, it appears from the statement of the managers on the part of the House accompanying the Conference Committee Report, that the term "agency" as appearing in the Portal Act was employed in this sense. As there stated (p. 16), the regulations, orders, ruling, approvals, interpretations, administrative practices and enforcement policies relied upon and conformed with "must be those of an 'agency' and not of an individual officer or employee of the agency. Thus, if inspector A tells the employer that the agency interpretation is that the employer is not subject to the (Fair Labor Standards) Act, the employer is not relieved from liability, despite his reliance in good faith on such interpretations, unless it is in fact the interpretation of the agency." Similarly, the Chairman of the Senate Judiciary Committee, in explaining the conference agreement to the Senate, made the following statement concerning the "good faith" defense.
"It will be noted that the relief from liability must be based on a ruling of a Federal agency, and not a minor official thereof. I, therefore, feel that the legitimate interest of labor will be adequately protected under such a provision, since the agency will exercise due care in the issuance of any such ruling."

On the other hand, the Eastern District of New York held in Mascol v. E & L Transp., Inc., 387 F. Supp. 2d 87, 100-01 (E.D.N.Y. 2005), that a letter signed by a Wage and Hour Investigator was a "ruling" within the ambit of § 259(a):

Since the letter was issued by the Wage and Hour Division as a result of a specific official investigation, even though it was not a published formal statement, it qualifies as an official letter representing the position of the Wage and Hour Division and so it must be a "ruling" of an "Agency" as contemplated by the Portal Act.

As I indicated at the meeting, my overtime back wage figures are subject to revision as circumstances warrant, such as for the instances [Granite Bay's State Director] mentioned with the adult foster care provider opting not to avail themselves of the respite care and instead being paid the respite care stipend themselves. In that case, I will instead consider the respite care payment as an additional foster care stipend.

The defendants argue that "if there was any issue or concern with payment of adult foster care providers on an hourly basis or with the potential payment of overtime, there would have been no reason for this statement to be made." Defs.' Mot. for Partial Summ. J. at 8 (ECF No. 63). Perhaps so, but that does not turn the e-mail into an interpretation or a ruling, and neither does the District Director's silence in response to Granite Bay's lawyer's letter or DOL's 2010 decision not to proceed. See 29 C.F.R. § 790.17(g) ("If for example, the agency declines to express an opinion as to the application of the law in a particular fact situation, the agency is refraining from interpreting the law rather than giving an interpretation."); De Luna-Guerrero v. N.C. Grower's Ass'n, Inc., 370 F. Supp. 2d 386, 392 (E.D.N.C. 2005) ("[I]t is not enough for the agency to state that it will not express an opinion." (citing 29 C.F.R. § 790.17(g))).

As a result, I deny the defendants summary judgment on their good faith affirmative defense to the federal claim.

III. The Plaintiffs' Motion for Summary Judgment of Liability on the State Law Claim

A. Supplemental Jurisdiction

It is well established that under the supplemental jurisdiction statute there is subject matter jurisdiction to adjudicate any state claim that forms part of the same case or controversy as the federal claim. 28 U.S.C. § 1367; Pagan-Colon v. Walgreens, 697 F.3d 1, 18 n. 12 (1st Cir. 2012). The parties agree that appropriate compensation for the work under the Fair Labor Standards Act ("FLSA") claim involves the same work, conducted in the same place, as the Maine law wage and hour claims. The defendants challenge my exercise of supplemental jurisdiction over the state claims in this case only if I grant them summary judgment on the FLSA claim. Because I have not granted summary judgment on the federal claim against all the defendants, I will continue to exercise jurisdiction over the state law claims under 28 U.S.C. § 1367.

B. Statute of Limitations

The plaintiffs request that summary judgment be granted on the defendants' affirmative defense of the statute of limitations. I am not sure why this issue is still in play. The parties agree that Maine's general six-year statute of limitations applies to this case. The defendants' liability under Maine wage and hour laws can extend only as far back as the beginning of each plaintiff's employment. The defendants say that date is less than six years in each case and the plaintiffs have not disagreed. Because none of the plaintiffs worked for the defendants for more than six years before filing their respective complaints, I grant summary judgment to the plaintiffs on the statute of limitations defense with regard to liability under Maine law.

C. Employee/Independent Contractor

The Maine wage-and-hour statute sets the minimum wage and overtime standards for Maine employees. Under Maine law, employers are generally required to compensate their employees at or above the stated minimum wage for the first 40 hours of work and at one and one-half times the employee's regular wage for time over 40 hours. 26 M.R.S.A. § 664 (1) & (3). Although certain exemptions exist, the parties agree that none of those exemptions applies to this case. The issue is whether the plaintiffs, when working as Adult Foster Care Providers, were properly classified as independent subcontractors in being paid a stipend without regard to minimum wage or overtime, rather than as Granite Bay Care employees. If not, damages will follow.

Eight-Factor Test

I examined the Maine law independent contractor/employee issue recently in Scovil v. FedEx Ground Package Sys., Inc., 886 F. Supp. 2d 45, 51-52 (D. Me. 2012). I concluded there that the eight factors from Murray's Case, 154 A. 352 (Me. 1931), determine the nature of the relationship under Maine wage and hour laws. I rely upon the Scovil reasoning without revisiting it.

The Murray's Case relationship test teaches consideration of the following factors:

(1) the existence of a contract for the performance by a person of a certain piece or kind of work at a fixed price;
(2) independent nature of his business or his distinct calling; (3) his employment of assistants with the right to supervise their activities; (4) his obligation to furnish necessary tools, supplies, and materials; (5) his right to control the progress of the work except as to final results; (6) the time for which the workman is employed; (7) the method of payment, whether by time or by job; (8) whether the work is part of the regular business of the employer.

(1) Existence of a contract for the performance by a person of a certain piece or kind of work at a fixed price

The parties agree that Providers entered into contracts with Granite Bay Care in which they agreed to assume responsibility for the care of a disabled individual who was in need of mental health services. Stipulated Facts ¶¶ 2, 5, 40, 41, 43. The contract required that the Provider be responsible for the care of the client twenty-four hours per day, five days per week. Stipulated Facts ¶ 2.

The contract required that the Provider provide services certain hours of each week. McCarron Contract at 836-37, 847, 849. The services that were provided under the contract were compensated in the form of a stipend, paid bimonthly or monthly. Stipulated Facts ¶ 5. The stipend was further broken down into a per diem amount to facilitate the calculation of an adjusted stipend if the Provider were absent on a day in which he or she otherwise would have been providing care. Stipulated Facts ¶ 6; McCarron Contract at 847, 849. In fact, the plaintiffs' stipends were reduced on a per diem basis when they were absent for a day or more and Respite coverage needed to be obtained. Stipulated Facts ¶¶ 6, 36; McCarron Contract at 847. The contractual "stipend" was directly proportional to the number of days the Provider worked. In other words, this was payment for time worked—like a wage—and not payment for a service whereby the Provider could make a profit by performing more quickly.

This factor favors the finding of an employee relationship.

(2) Independent nature of the business or his distinct calling

The parties agree that the Providers did not operate an independent business or have a traditional "calling," although some had experience in caring for disabled individuals. Stipulated Facts ¶ 10. Indeed, Granite Bay Care provided training for the Providers. Stipulated Facts ¶¶ 13, 22, 23. The Providers did not ordinarily perform other services for other entities during the time of their employment with Granite Bay Care. Stipulated Facts ¶ 35.

This factor favors the finding of an employee relationship.

(3) Employment of assistants with the right to supervise their activities

The contract did not permit the Providers to hire assistants or substitutes, but instead required Granite Bay Care's approval of any Respite Care provider identified by the Provider. McCarron Contract at 848. Providers did not supervise Respite Workers. Pls.' Statement of Material Facts ("PSMF III") ¶ 5 (ECF No. 57); Defs.' Resp. to Pls.' Statement of Material Facts ("Defs.' Resp. III") ¶ 5 (ECF No. 75). If a Provider did not like the manner in which a Direct Support Professional or a Respite Care Worker treated the disabled individual or the manner in which they performed their jobs, the Provider complained to Granite Bay Care's management about those employees. Id.

This factor favors the finding of an employee relationship.

(4) Obligation to furnish necessary tools, supplies, and materials

Providers were required to come equipped with a cell phone, a vehicle and a computer to assist in supporting and caring for their assigned individuals, McCarron Contract at 843 ¶ h, no specialized tools. They were also responsible for providing bedroom furnishings for their own rooms. McCarron Contract at 843 ¶ g; Stipulated Facts ¶ 17. But they did not have to provide the home, food for the clients, heat, insurance or utilities. PSMF III ¶ 6; Defs.' Resp. III ¶ 6. Granite Bay Care leased the homes in which they provided services. PSMF III ¶ 7; Defs.' Resp. III ¶ 7. Moreover, they did not have to pay any of the costs of maintaining the homes. PSMF III ¶ 8; Defs.' Resp. III ¶ 8. They informed Granite Bay Care of needed repairs. Stipulated Facts ¶ 18. Granite Bay Care or the landlord made all the repairs. Id. Bills for the maintenance of the homes went to Granite Bay Care's corporate office to be processed and paid. Stipulated Facts ¶¶ 19-20.

Nothing about the tools, supplies and materials suggests that this is an independent contractor relationship, although this factor does not lead strongly in either direction.

(5) Right to control the progress of the work except as to final results

With respect to control "[i]t is not the fact of actual interference with the control, but the right to interfere, that makes the difference between an independent contractor and a servant or agent." Murray's Case, 154 A. at 354 (emphases added) (citation omitted). The plaintiffs assert that Granite Bay Care had the right and power under its Adult Foster Care Provider contract, as well as under the disabled client's "Person Centered Plan," to direct and control their work. Granite Bay Care disagrees. Although the unusual work setting here may have made actual control on a continuous basis difficult, I conclude that Granite Bay Care nevertheless retained the right to control the plaintiffs.

The Adult Foster Care Provider contract provided specific responsibilities and obligations for the Provider. Stipulated Facts ¶ 21; McCarron Contract. However, the parties have stipulated that the contract covered only part of the services and/or work performed to provide disabled individuals support and care during each week. Stipulated Facts ¶ 1. Granite Bay Care instructed Providers on how their role should be performed and trained Providers on how to work with disabled individuals. Stipulated Facts ¶ 22. Under the contract, Granite Bay Care not only directed the hours of the work but also required Providers to request leave if they wanted to be absent from the home that Granite Bay Care provided for the client. Stipulated Facts ¶ 2; McCarron Contract at 843, 848. Granite Bay Care set and enforced rules regulating the conduct of the Providers in the home, such as prescribing who could authorize visitors to the home and prohibiting the possession of alcohol, weapons or pornography. Stipulated Facts ¶ 26; McCarron Contract at 843. The contract required Providers to direct questions about agency matters to Granite Bay Care's Program Manager. McCarron Contract at 838, 843. In addition, Granite Bay Care reserved the right to terminate a Provider's contract at any time without cause and without notice. Stipulated Facts ¶ 8. Providers, on the other hand, were required to give 90 days' notice before ending the contract. Stipulated Facts ¶ 9. A Provider's failure to provide the required notice of termination could "impact the individual's employment status in other [Granite Bay Care] programs" if he or she were so employed. Id. Granite Bay Care required Providers to provide all required documents and a monthly report to its Program Manager. McCarron Contract at 843 ¶ c.

Each client that Granite Bay Care served had his or her own unique needs. In order to meet those needs a detailed Person Centered Plan was developed. A team consisting of the legal guardian for the disabled individual, a representative of the State of Maine, staff from Granite Bay Care and the Provider generated the Plan. PSMF III ¶ 12; Defs.' Resp. III ¶ 12. The Plan had to be approved by the State and the guardian, and then was enforced by Granite Bay Care. PSMF III ¶ 13; Defs.' Resp. III ¶ 13. The Providers had to follow the Plan in teaching daily living skills and in the general delivery of services to the disabled client. McCarron Contract at 836 ¶ c. The Providers stayed in regular contact with the legal guardian for the disabled client. Defs.' Additional Statement of Material Facts ("DASMF III") ¶ 29 (ECF No. 75); Pls.' Resp. to Defs.' Additional Statement of Material Facts ("Pls.' Resp. III") ¶ 29 (ECF No. 82). The Provider was the connection to the legal guardian and attended all meetings and provided the detailed update on what the disabled individual had done and how the client was progressing. DASMF III ¶ 31; Pls.' Resp. III ¶ 31.

Granite Bay Care acknowledges that it monitored the Providers' performance under the contract, DASMF III ¶ 34; Pls.' Resp. III ¶ 34, but it asserts that its focus was on the ultimate results of the Providers' work rather than on how the results were achieved. It cites Legassie, 741 A.2d at 444, for support of its argument that the Providers were therefore independent contractors. Id. ("The right to control the 'details of the performance,' present in the context of an employment relationship, must be distinguished from the right to control the result to be obtained, usually found in independent contractor relationships." (citation omitted)). Granite Bay Care says that although it tailored care to the individual client and provided individualized mental health services, the Providers were provided "unfettered discretion in how they performed their duties." Defs.' Opp'n to Pls.' Mot. for Summ. J. at 18 (ECF No. 78). To support this assertion, Granite Bay Care points out that a Provider made hundreds of decisions each day:

when to wake the consumer, when the consumer should get dressed, what the consumer should eat for the day, when and how to prepare and cook meals, how to involve the consumer in those activities, what leisure activities the consumer can or should engage in, when the consumer can watch television and which shows he or she may watch,
what and when the consumer can read, when the consumer can have time to relax and what the consumer will do during that period, what games the consumer can play, topics to discuss with the consumer, when telephone calls can be made, when and what to clean in the house, when to perform hygiene related functions, when, where and how long to go out for walks or drives or to attend church or activities, what activities to participate in, when to prepare for bed and to go to bed, how to provide guidance and instruction to the consumer on daily activities such as those described above, how and when to reinforce instruction and lessons that were experienced during the course of the day, how to continue to assist the consumer with their growth and development, and how, when and why to restrain and/or discipline the consumer for his or her conduct. In addition, the [Provider] is responsible for modeling appropriate behavior throughout the time he or she spends with the consumer.

Granite Bay Care's arguments may show that constant monitoring of Providers was impractical, but they do not show that Granite Bay Care surrendered the right to control what Providers did. Many workers conventionally categorized as employees are not and cannot be supervised on a moment-by-moment or even hour-by-hour basis (consider teachers or coaches), especially in today's world of telecommuting. But that does not mean that their employer lacks the right to control them, only the opportunity. Even without intervening in the details of how the Providers performed each task or job duty, Granite Bay Care controlled the work of the Providers. Given the terms of the contract and the Plans that structured and ordered Providers' work, the ultimate supervision and oversight of their work by Granite Bay Care and the training provided by Granite Bay Care, the Providers did not have the right to control their own work. They were not given any contractual discretion to deviate from contracts or Plans. They were subject to the direction and supervision of Granite Bay Care.

This factor favors the finding of an employee relationship.

(6) Time for which the workman is employed

The Provider contract was for a one-year term. McCarron Contract at 835. In practice, Providers signed a new contract each year they served and all were employed for more than one year. Sharon McCarron Aff. ¶ 5 (ECF No. 57-3); Andre Folikoue Teko Aff. ¶ 5 (ECF No. 57-4); Kayi Affo Contracts (ECF No. 68-2; Jessica Bradbury Palmer Contracts (ECF No. 68-3); Sharon Fairbanks Contracts (ECF No. 68-4); Sharon McCarron Contracts (ECF No. 68-5); Andre Folikoue Teko Contracts (ECF No. 68-6). Granite Bay Care could terminate them without cause and without notice, but the Providers had the obligation to give advance notice if they left Granite Bay. Stipulated Facts ¶¶ 8-9.

The plaintiffs assert that the "prolonged duration" of the employment indicates that they were employees. The defendants cite Owen v. Royal Industries, Inc., 314 A.2d 60, 62 (Me. 1974), a workers' compensation case, to confirm that independent contractors can in fact be engaged on a long-term basis. Defs.' Opp'n to Pls.' Mot. for Summ. J. at 20 (ECF No. 78). Owen does recognize that proposition, albeit in passing.

I conclude that this factor does not favor either categorization of the relationship.

(7) Method of payment—by time or by job

Granite Bay Care compensated the Providers according to a fixed fee for a month. Defs.' Opp'n to Pls.' Mot. for Summ. J. at 20-21 (ECF No. 78). But there was no way the Providers could complete the "job" in a shorter time. Instead, as discussed above, Granite Bay Care reduced a Provider's stipend for each missed day of work. The stipend also varied according to the number of days in the month. McCarron Contract at 849 (semi-monthly stipend breakdown).

The per diem reduction weighs in favor of finding an employee relationship.

(8) Whether the work is part of the regular business of the employer

The work that Providers did was not only "part of the regular business of" Granite Bay Care, it was central to its business. Granite Bay Care's mission stated: "Granite Bay Care (Care) is a locally owned and operated human service agency providing intensive clinical, nursing, residential, and community based services to adults with cognitive and physical disabilities, in a growing number of locations spanning North to South, Bangor to Berwick." Stipulated Facts ¶ 39. Granite Bay Care accomplished this mission through engaging persons in various positions including Providers and Direct Support Professionals. Stipulated Facts ¶ 41. Providers worked in cooperation with the Direct Support Professionals doing very similar work at different times of the day. Together they were an integral part of the mission that Granite Bay Care chose: the care and protection of developmentally and physically disabled people in a home-based setting. Stipulated Facts ¶¶ 3, 14, 39-41. It is an admirable mission, but to say that these Providers were independent contractors would mean that Granite Bay Care contracted out the heart of its business.

This factor favors employee status.

* * * * *

I conclude that none of the Murray's Case factors supports independent contractor status, and that most of them favor employee status. The factors of special importance (according to Legassie) in worker protection cases such as this—(2) the nature of the work and (8) its relation to the employer's business— strongly favor employee status. The factor emphasized in tort liability cases— (5) right to control—also strongly favors employee status. On this record and under Maine law, a factfinder could not find that the Providers were independent contractors, but only that they were employees. Therefore, the plaintiffs are entitled to summary judgment that Granite Bay Care is liable on the Maine state law claim for violation of Maine's wage and hour statute in treating these employees as independent contractors.

CONCLUSION

As a result of all my rulings, summary judgment shall be entered in favor of Granite Bay Connections, Inc. (the New Hampshire nonprofit) on all the plaintiffs' claims, and in favor of Kasai Mumpini and Caroletta Alicea on the state law claims. Summary judgment on liability shall be entered in favor of the plaintiffs on their Maine state law claim against Granite Bay Care, Inc. The amount of damages on that claim, as well as liability on the federal law claim (including that of Mumpini and Alicea), remain for trial.

SO ORDERED.

__________________________

D. BROCK HORNBY

UNITED STATES DISTRICT JUDGE