Garza et al v. Cherokee Healthcare Services

Western District of Texas, txwd-5:2019-cv-00353

AMENDED COMPLAINT against All Defendants amending, filed by Cynthia Garza.

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5 UNITED STATES DISTRICT COURT Western District of Texas San Antonio Division Cynthia Garza, Elsa Toscano, § Norma Bexar-Moline, Teresa § Villanueva, and San Juana Gomez, § individually and on behalf of all those § similarly situated § § Plaintiffs, § § Civil Action No: 5:19-cv-353-FB § § Jury Demanded v. § § Cherokee Healthcare Services, § § Defendant § Plaintiffs' First Amended Collective Action Complaint Cynthia Garza, Elsa Toscano, Norma Bexar-Moline, Teresa Villanueva, and San Juana Gomez ("Plaintiffs"), individually and on behalf of all others similarly situated remote medical coders bring this Fair Labor Standards Act ("FLSA") suit against the above-named Defendant and shows as follows: 1. Nature of Suit. 1.1. The FLSA was passed by Congress in 1938 in an attempt to eliminate low wages and long hours and to correct conditions that were detrimental to the health and well-being of workers. To achieve its humanitarian goals, the FLSA requires the payment of a minimum wage and "limits to 40 a week the number of hours that ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 1 5 an employer may employ any of his employees subject to the Act, unless the employee receives compensation for his employment in excess of 40 hours at a rate not less than one and one-half times the regular rate at which he is employed." Walling v. Helmerich & Payne, 323 U.S. 37, 40 (1944) (discussing the requirements of 29 U.S.C. § 207 (a)). 2. Parties. 2.1. Plaintiff Cynthia Garza is an individual residing in the Western District of Texas. In the three-year period preceding the filing of this action, Plaintiff Cynthia Garza was employed by Defendant within the meaning of the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. as a medical coder. Plaintiff Cynthia Garza's written consent to become a party plaintiff is being filed with the Court. 2.2. Plaintiff Elsa Toscano is an individual who was employed by Defendant within the meaning of the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. as a medical coder in the three-year period preceding the filing of this action. Plaintiff Elsa Toscano's written consent to become a party plaintiff is being filed with the Court. 2.3. Plaintiff Norma Bexar-Moline is an individual who was employed by Defendant within the meaning of the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. as a medical coder in the three-year period preceding the filing of this action. Plaintiff Norma Bexar-Moline 's written consent to become a party plaintiff is being filed with the Court. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 2 5 2.4. Plaintiff Teresa Villanueva is an individual who was employed by Defendant within the meaning of the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. as a medical coder in the three-year period preceding the filing of this action. Plaintiff Teresa Villanueva's written consent to become a party plaintiff is being filed with the Court. 2.5. Plaintiff San Juana Gomez is an individual who was employed by Defendant within the meaning of the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. as a medical coder in the three-year period preceding the filing of this action. Plaintiff San Juana Gomez's written consent to become a party plaintiff is being filed with the Court. 2.6. The class members are other hourly-paid persons that were employed by Defendant to remotely code inpatient or outpatient medical coding, including but not limited to the coding of diagnoses or treatments regardless of the particular healthcare facilityor contract for which they coded ("Class Members") in the three-year period preceding the filing of this action and were not paid overtime as required by the FLSA. 2.7. Defendant Cherokee Healthcare Services ("Defendant") is an entity engaged in commerce or the production of goods for commerce within the meaning of the FLSA and is obligated to ensure that all employees are paid in accordance with the FLSA. 3. Jurisdiction and Venue. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 3 5 3.1. Venue of this action is proper in this district and division because the events giving rise to the cause of action alleged herein (failure to pay overtime) occurred in this division and judicial district. Venue exists in the judicial district pursuant to 28 U.S.C. § 1391. 3.2. Defendant employs individuals in and carries on substantial business in the Western District of Texas and has sufficient minimum contacts with this state to be subject to this Court's jurisdiction. 3.3. This Court has jurisdiction over this case pursuant to the district court's federal question jurisdiction as set forth in 28 U.S.C. § 1331. Specifically, this case is brought pursuant to the FLSA, 29 U.S.C. § 201 et seq., as amended. 4. Coverage. 4.1. At all material times, Defendant has acted, directly or indirectly, in the interest of an employer with respect to Plaintiffs. 4.2. At all times hereinafter mentioned, Defendant has been an employer within the meaning of the Section 3(d) of the FLSA, 29 U.S.C. § 203(d). 4.3. At all times hereinafter mentioned, Defendant has been an enterprise with the meaning of Section 3(r) of the FLSA, 29 U.S.C. § 203(r). 4.4. At all times hereinafter mentioned, Defendant has been an enterprise engaged in commerce or the production of goods for commerce within the meaning of Section 3(s)(1) of the FLSA, 29 U.S.C. § 203(s)(1), in that said enterprise has had employees engaging in commerce or in the production of goods for ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 4 5 commerce, or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce for any person (such as, for example, the payment processing systems for coding medical charts) in that said enterprise has had and has an annual gross volume of sales made or business done of not less than $500,000 (exclusive of excise taxes at the retail level which are separately stated). 4.5. Defendant is a provider of contract healthcare services on a multi-state basis. Two or more of Defendant's employees, engage in commerce by using equipment that has traveled in interstate commerce. By way of example and not by limitation, Defendant's employees used/use: 4.5.1. computers and telecommunications equipment that has been manufactured and shipped across state lines; 4.5.2. office equipment, such as copiers, that has been manufactured and shipped across state lines; 4.5.3. the interstate telephone systems, landline and cellular, to recruit and employ individuals for operational positions; 4.5.4. The United States postal system to send mail across state lines; and 4.5.5. the interstate banking systems to pay Defendant's employees. 4.6. At all times hereinafter mentioned, Plaintiffs were individual employees who were engaged in commerce or in the production of goods for commerce as required by 29 U.S.C. § 207. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 5 5 4.7. Plaintiffs were employed by Defendant within the applicable statute of limitations. 5. Factual Allegations. 5.1. Defendant provides services to the healthcare industry. 5.2. Plaintiffs work(ed) for Defendant remotely coding medical charts on a BAMC contract. Specifically, Plaintiffs coded for: 5.2.1. outpatient visits/consultations; 5.2.2. inpatient visits/consultations; and 5.2.3. inpatient/outpatient billable and non-billable clinics; 5.3. Defendant has provided job descriptions for medical coders, and thus the Plaintiffs, on job employment websites as: 5.3.1.INPATIENT MEDICAL CODER SUMMARY: Responsible for assignment of accurate ICD codes for diagnoses and procedures. Medical Severity - Diagnostic Related Group (MS-DRG) is automatically assigned by the grouper software) for inpatient stays. Inpatient coders may also be responsible for the assignment of accurate ICD diagnoses, current procedural terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS), modifiers, and quantities from medical record documentation (paper or electronic) for inpatient professional services (a.k.a, rounds or IBWA encounters). Trains and educates MTF staff on coding issues and plays a significant role in coding compliance activities. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 6 5 5.3.2. OUTPATIENT MEDICAL CODER SUMMARY: Responsible for assignment of accurate Evaluation and Management (E&M) codes, ICD diagnoses, current procedural terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS), modifiers and quantities derived from medical record documentation (paper or electronic) for outpatient encounters. Trains and educates MTF staff on coding issues and plays a significant role in coding compliance activities. 5.4. Plaintiffs were not paid on a salary basis. Plaintiffs are (were) paid on an hourly basis thus none of the exemptions to the FLSA apply.1 5.5. Plaintiffs were paid an hourly rate as follows: 5.5.1. Cynthia Garza, $26.47/hour; 5.5.2. Elsa Toscano, $34.00/hour; 5.5.3. Norma Bexar-Moline, $25.00/hour; 5.5.4. Teresa Villanueva, $24.72/hour; and 5.5.5. San Juana Gomez, $34.00/hour. 5.6. Plaintiffs' job responsibilities consisted of non-exempt medical coding work. Plaintiffs would code medical charts according to industry specifications. 1 Exemptions to the FSLA are affirmation defenses that must be pled by Defendant and not negated by Plaintiff in his Complaint. Corning Glass Works v. Brennan, 417 U.S. 188, 196–97 (1974)("[T]he application of an exemption under the Fair Labor Standards Act is a matter of affirmative defense on which the employer has the burden of proof"); Dewan v. M-I, L.L.C., 858 F.3d 331, 332 (5th Cir. 2017). Plaintiff is not required to negate the affirmative defenses. See Tregenza v. Great Am. Commc'ns Co., 12 F.3d 717, 718 (7th Cir. 1993) ("a plaintiff is not required to negate an affirmative defense in his complaint"). ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 7 5 5.7. Plaintiffs' primary job duties consisted of conduct that did not require discretion in order to be performed or advanced training. Plaintiffs' duties were routine and did not require the exercise of independent judgment or discretion. 5.8. Plaintiffs are (were) paid on an hourly basis at a straight time rate. Plaintiffs were not paid for "off-the-clock" hours. Plaintiffs worked hours that Plaintiffs' supervisor(s) refused to record in the timekeeping system. 5.9. Plaintiffs and similarly situated employees regularly worked in excess of 40 hours a week. Plaintiffs were not paid for hours over 40 in a workweek even though Defendant's management knew Plaintiffs were working over 40 hours in most, if not every, work week. 5.10. The hours worked by Plaintiffs and the Class Members were not accurately tracked or counted towards total hours worked and no overtime was paid for these hours ("Uncounted Hours Policy"). Because Defendant did not accurately track and pay for all hours worked, including overtime hours, Defendant violated the FLSA by failing to pay Plaintiffs overtime compensation for all hours worked in excess of 40 per workweek. 5.11.Plaintiffs and the Class Members were required to log in to the Defendant's IT system. On many occasions the IT system was down and Plaintiffs and the Class Members were required to remain at or near their computers so they could resume processing data when the system came back online. Plaintiffs and the Class Members were required to certify that they were available and waiting for ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 8 5 the system to resume. Plaintiffs and the Class Members were not compensated for this time. This was Defendant's "System Down-Uncompensated Time Policy." It was applied uniformly to Plaintiffs and the Class Members. 5.12. Plaintiffs routinely worked overtime that was not paid in most if not all of the weeks they were employed by Defendant. Under the FLSA Defendant is required to keep accurate records of time worked. Defendant did not do so. To the extent Defendant kept some records Plaintiff will be in a better position to specify specific overtime hours worked but not paid. Nonetheless, for instance, Plaintiffs believe and allege overtime was worked and not paid in the week beginning June 4, 2018 as follows: 5.12.1. Cynthia Garza, at least 12 hours for unpaid overtime of at least $476.46 plus a like amount in liquidated damages. 5.12.2. Elsa Toscano, at least 10 hours for unpaid overtime of at least $510.00 plus a like amount in liquidated damages. 5.12.3. Norma Bexar-Moline, at least 20 hours for unpaid overtime of at least $750.00 plus a like amount in liquidated damages. 5.12.4. Teresa Villanueva, at least 7.5 hours for unpaid overtime of at least $278.10 plus a like amount in liquidated damages. 5.12.5. San Juana Gomez, at least 10 hours for unpaid overtime of at least $402.60 plus a like amount in liquidated damages. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 9 5 5.13. Defendants knowingly, willfully, and/or with reckless disregard carried out its illegal pattern and/or practice of failing to pay the minimum wage and/or overtime compensation with respect to Plaintiffs and similarly situated employees. Specific facts exposing that Defendant willfully violates/violated the FLSA include the fact that Defendant (1) instituted and enforced the Uncounted Hours Policy; (2) instituted and enforced the System Down-Uncompensated Time Policy; (3) failed to keep proper employment records for Plaintiff and the Class Members; and (4) failed to keep accurate time records for the hours worked by Plaintiff and the Class Members during their employment.2 6. Collective Action Allegations. 6.1. The allegations in paragraph 5 are incorporated herein and apply to the Class Members. 2 Sandoval v. Carrco Paint Contractors, No. 16-cv-159, 2017 WL 2999425, at *4 (May 24, 2017) ("Additionally, 'an employer's recordkeeping practices may nonetheless corroborate an employee's claims that the employer acted willfully in failing to compensate for overtime wages.'") (quoting Perez v. T.A.S.T.E. Food Prod., Inc., No. 5:13- CV-655-DAE, 2014 WL 412327 at *5 (W.D. Tex. Feb. 3, 2014); Bingham v. Jefferson Couunty, Texas, No. 1:11- CV-48, 2013 WL 1312563, at *7 (E.D. Tex. Mar. 1, 2013) (citing Elwell v. University Hospitals Home Care Services, 276 F.3d 832, 844 (6th Cir. 2002) ("[A]n employer's recordkeeping practices may nonetheless corroborate an employee's claims that the employer acted willfully in failing to compensate for overtime. For example, the fact that an employer knowingly under-reported its employee's work hours could suggest to a jury that the employer was attempting to conceal its failure to pay overtime from regulators, or was acting to eliminate evidence that might later be used against it in a suit by one of its employees."); Solano v. Ali Baba Mediterranean, No. 3:15-CV- 0555-G, 2016 WL 808815, at *5 (N.D. Tex. Mar. 2, 2016) (citations omitted); Majchrzak v. Chrysler Credit Corp., 537 F. Supp. 33, 36 (E.D.Mich.1981) (finding willful violation of overtime provisions where company policy of not recording "compensation time" earned for working in excess of forty hours per week was "susceptible to abuse and indeed was abused herein"); Marshall v. Sam Dell's Dodge Corp., 451 F. Supp. 294, 301 (N.D.N.Y.1978) ("The defendants' practice of knowingly maintaining inaccurate time records which greatly understated the number of hours worked by their sales personnel permits only one conclusion; i.e. the violations of the Act were willful."). ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 10 5 6.2. Other Class Members employed by Defendant have been victimized by both the Uncounted Hours Policy and the System Down-Uncompensated Time Policy which is in willful violation of the FLSA. These two policies applied to all the Class Members. 6.3. Each of the Class Members remotely worked coding hours for which they were not paid and each of the Class Members worked hours for which they were not paid when they were waiting for the IT system to become operable. 6.4. All Class Members were paid hourly and not on a salary. Thus, no exemptions to the FLSA apply to any of the Class Members. 6.5. All Class Members employed by Defendant were paid hourly and in the same manner as Plaintiffs, i.e., paid hourly yet their hours were not accurately tracked/counted. The Uncounted Hours Policy of Defendant and the System Down-Uncompensated Time Policy of Defendant have been uniformly imposed on the Class Members employed by Defendant. 6.6. The Class Members performed job duties typically associated with non-exempt employees. Their duties were routine and did not require the exercise of independent judgment or discretion. Moreover, these employees regularly worked more than 40 hours in a workweek and were not paid one and one-half their regular rate of pay for hours worked in excess of 40 hours in a work week. 6.7. Accordingly, the Class Members are similarly situated to Plaintiffs in terms of job duties and pay provisions. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 11 5 6.8. Defendant's failure to pay overtime compensation at the rates required by the FLSA comes from generally applicable policies or practices and does not depend on the personal circumstances of the Class Members. Thus, Plaintiffs' experience is typical of the experience of the Class Members. 6.9. The specific job titles, precise job requirements or job locations of the various Class Members do not prevent collective treatment. All Class Members, regardless of their work location, precise job requirements or rates of pay, are entitled to be paid overtime compensation for hours worked in excess of 40 hours per week. Although the issue of damages may be individual in character, there is no detraction from the common nucleus of liability facts. The questions of law and fact are common to Plaintiffs and the Class Members. 6.10. Accordingly, the class of similarly situated plaintiffs is properly defined as: 6.10.1. All hourly paid remote medical coders (regardless of actual job title) performing outpatient or inpatient medical coding who worked for Defendant within the last three years who worked in excess of 40 hours in one or more workweeks and were not compensated at one and one- half times their regular rate of pay for all hours worked in excess of 40 hours in one or more workweeks. 6.11. Plaintiffs bring this action on behalf of similarly situated employees. 6.12. As a collective action, Plaintiffs seek this Court's appointment and\or designation as representatives of a group of similarly situated individuals as defined herein. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 12 5 7. First Cause of Action: Failure to Pay Wages in Accordance with the Fair Labor Standards Act. 7.1. Each and every allegation contained in the foregoing paragraphs 1-6, inclusive, is re-alleged as if fully rewritten herein. 7.2. During the relevant period, Defendant has violated Section 7 of the FLSA, 29 U.S.C. §§ 207 and 215(a)(2), by employing employees in an enterprise engaged in commerce or in the production of goods for commerce within the meaning of the FLSA as aforesaid, without compensating such employees for their work in excess of forty hours per week at rates no less than one-and-a-half times the regular rates for which they were employed. 7.3. Plaintiffs seek recovery for unpaid overtime. In this First Cause of Action Plaintiffs are not seeking recovery under the FLSA for hours worked in weeks in which they worked less than 40 hours per week. 7.4. Defendant knowingly, willfully, or with reckless disregard carried out its illegal pattern or practice of failing to pay overtime compensation with respect to Plaintiff and the Class Members. 7.5. Defendant did not act in good faith and/or have reasonable grounds for a belief that its actions did not violate the FLSA nor did they act in reliance upon any of the following in formulating their pay practices: (a) case law; (b) the FLSA, 29 U.S.C. § 201, et seq.; (c) Department of Labor Wage & Hour Opinion Letters; or (d) the Code of Federal Regulations. ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 13 5 7.6. Relief Sought. 7.6.1. WHEREFORE, PREMISES CONSIDERED, Plaintiffs pray that they and all those who consent to be opt-in plaintiffs in this collective action recover from Defendant, the following: 7.6.1.1. An Order recognizing this proceeding as a collective action pursuant to Section 216(b) of the FLSA and appointing Plaintiffs and their counsel to represent the Class Members; 7.6.1.2. An Order requiring Defendant to provide the names, addresses, email addresses and telephone numbers of all potential Class Members; 7.6.1.3. An Order approving the form and content of a notice to be sent to all potential Class Members advising them of the pendency of this litigation and of their rights with respect thereto; 7.6.1.4. Overtime compensation for all unpaid hours worked in excess of forty hours in any workweek at the rate of one-and-one-half times their regular rates; 7.6.1.5. All unpaid overtime compensation; 7.6.1.6. An award of liquidated damages pursuant to 29 U.S.C § 216 as a result of the Defendant's failure to pay overtime compensation pursuant to the FLSA; ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 14 5 7.6.1.7. Reasonable attorney's fees, expert fees, costs, and expenses of this action as provided by the FLSA; 7.6.1.8. Pre-judgment and post-judgment interest at the highest rates allowed by law; and 7.6.1.9. Such other relief as to which Plaintiffs may be entitled. 8. Jury Demand. 8.1. Plaintiffs demand a trial by jury. Respectfully submitted, By: /s/ Chris R. Miltenberger Chris R. Miltenberger Texas Bar Number: 14171200 The Law Office of Chris R. Miltenberger, PLLC 1360 N. White Chapel, Suite 200 Southlake, Texas 76092-4322 817-416-5060 (office) 817-416-5062 (fax) chris@crmlawpractice.com Attorney for Plaintiffs Certificate of Service The undersigned certifies that on June 12, 2019, the foregoing document was filed electronically through the Court's CM/ECF system in compliance with the Local Rules. By: /s/ Chris R. Miltenberger Chris R. Miltenberger ____________________________________________________________________________________ Plaintiffs' First Amended Collective Action Complaint Page | 15