Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01306/USCOURTS-caed-2_05-cv-01306-8/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 15:2(a) Fair Labor Standards Act

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28 This matter was determined to be suitable for decision without *

oral argument. L.R. 78-230(h).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ELAINE CHAO, Secretary of Labor, )

United States Department of Labor, )

) 2:05-cv-1306-GEB-KJM

Plaintiff, )

)

v. ) ORDER*

)

JASMINE HALL CARE HOMES, INC., a )

corporation; HALL CARE HOMES, )

INC., a corporation; GEORGE K. )

HALL, an individual; and ESTELA )

HALL, an individual, )

)

Defendants. )

)

Pending are Plaintiff’s motion for summary judgment and/or

summary adjudication on her claims under the Fair Labor Standards Act

(“FLSA”) and Defendants’ cross-motion for partial summary judgment. 

BACKGROUND

Defendant George K. Hall (“George Hall”) owns and operates

eight adult residential care facilities for developmentally disabled

adults in Sacramento, California known as Jasmine Hall Care Homes

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The homes are operated under two companies, Defendant Jasmine 1

Hall Care Homes, Inc. and Defendant Hall Care Homes, Inc. (Defs.’ Opp’n

to Pl.’s Mot. for Summ. J. at 2.)

2

(“Jasmine Hall”). (Defs.’ Opp’n to Pl.’s Statement of Undisputed 1

Facts (“SUF”) ¶ 1.) Defendant Estela Hall (“Estela Hall”) is George

Hall’s wife and works as an Administrator for Jasmine Hall. (Id. ¶ 4;

Defs.’ Opp’n to Pl.’s Mot. for Summ. J. (“Defs.’ Opp’n”) at 2.) 

Services for developmentally disabled adults and children

are provided through a network of private, non-profit regional centers

that work under contract entered under California law with the

California Department of Developmental Services. (Defs.’ Opp’n to

Pl.’s SUF ¶ 5.) Alta California Regional Center (“Alta”) provides

these services around Sacramento, which include assessment and

placement for residential non-medical care for developmentally

disabled adults. (Id. ¶ 6.) Residential placement is made in

community care facilities (such as the Jasmine Hall Care Homes), which

have been licensed by the California Department of Social Services. 

(Id. ¶ 7.) 

Jasmine Hall employees are typically on-duty five

consecutive 24-hour shifts at their assigned care homes and have two

days a week off. (Defs.’ Opp’n to Pl.’s SUF ¶ 11.) Prior to

employment, George Hall enters into employment agreements with his

employees that specify the employees will either permanently reside at

the group homes or they will stay there at least five days a week. 

(Defs.’ Opp’n at 5.) In return, the employees are provided free room,

board, and medical benefits. (Id.) 

In June 2004, the Department of Labor (“DOL”) initiated an

investigation of Jasmine Hall concerning whether Defendants were

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In particular, Plaintiff alleges that Defendants violated 2

sections 6, 7, 11(c), 15, 16, and 17 of FLSA (29 U.S.C. §§ 206, 207,

211(c), 215, 216, and 217) for violations of, respectively, the minimum

wage, overtime and mandatory record-keeping provisions and for unpaid

wages and injunctive relief under FLSA. (Pl.’s Mot. at 9; see First Am.

Compl. at 4-6.) 

The standards for summary judgment are well known and need not 3

be repeated here. 

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violating any provision of the FLSA (29 U.S.C. §§ 201 et seq.) and

allegedly found that Defendants were failing to compensate their

employees for all hours worked. (Pl.’s Mot. for Summ. J. (“Pl.’s

Mot.”) at 8.) Plaintiff subsequently filed this action to recover, on

behalf of Defendants’ employees, unpaid minimum wages and overtime

back wages owed to them under the FLSA and to enjoin Defendants from

committing future minimum wage, record-keeping, and overtime

violations of FLSA. (Pl.’s Mot. at 9.) 

2

Plaintiff seeks summary judgment on the FLSA claims or,

alternatively, summary adjudication on various issues related thereto. 

(Pl.’s Notice of Mot. for Summ. J. at 2-4.) Defendants seek summary

judgment on Plaintiff’s claim that Defendants’ conduct was willful. 

(Defs.’ Notice of Cross-Mot. for Partial Summ. J. at 2.) 

DISCUSSION3

I. Applicability of Section 785.23

The FLSA generally mandates that employers pay their workers

a minimum hourly wage and overtime wages for work exceeding 40 hours a

week. Bennett v. Carol’s Towing, L.L.C., 2005 WL 2101002, at *2 (W.D.

Mo. Aug. 31, 2005); see Gaby v. Omaha Home for Boys, 140 F.3d 1184,

1186 (8th Cir. 1998). “These standards envision workers who clock in

at a specific time and work more or less continuously until they clock

out.” Bennett, 2005 WL 2101002, at *2. 

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Defendants argue the “homeworker’s doctrine” prescribed in

section 785.23 applies to the work situation at issue in this action. 

This doctrine “make[s] it possible to determine the compensation that

[] workers [who reside on an employer’s premises and are not required

to work continuously] deserve under [] FLSA.’” Id. (quoting Halferty

v. Pulse Drug Co., 864 F.2d 1185, 1189 (5th Cir. 1989)). Under

section 785.23:

An employee who resides on his employer’s premises

on a permanent basis or for extended periods of

time is not considered as working all the time he

is on the premises. Ordinarily, he may engage in

normal private pursuits and thus have enough time

for eating, sleeping, entertaining, and other

periods of complete freedom from all duties when

he may leave the premises for purposes of his own. 

It is, of course, difficult to determine the exact

hours worked under these circumstances and any

reasonable agreement of the parties which takes

into consideration all of the pertinent facts will

be accepted. This rule would apply, for example,

to the pumper of a stripper well who resides on

the premises of his employer and also to a

telephone operator who has the switchboard in her

own home.

29 C.F.R. § 785.23.

“The crucial insight of [section 785.23] is that - in these

specific circumstances, where an employee not only works but also

resides [or spends extended periods of time] on his or her employer’s

premises - the characterization of time for FLSA purposes need not be

an all-or-nothing proposition, as it otherwise would be in the offpremises residency context.” Brigham v. Eugene Water & Elec. Bd., 357

F.3d 931, 941 (9th Cir. 2004). “‘It is . . . difficult to determine

the exact hours worked under these circumstances,’ and the parties’

agreement provides a particularly important benchmark for assessing

how many hours the employees actually labored.” Id. 

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The parties dispute the applicability of section 785.23 to

Defendants’ case. (Pl.’s Mot. at 34; Defs.’ Opp’n at 9.) If a

genuine issue of material fact exists regarding Defendants’

entitlement to invoke section 785.23, Plaintiff will not prevail on

her motion for summary judgment on her FLSA claims nor on her motion

for summary adjudication of the section 785.23 issue. 

A. Complete Freedom

Plaintiff argues that Defendants are not entitled to invoke

section 785.23 since, “[b]y its own terms, [section] 785.23 is only

applicable to employment arrangements where the employees ‘may engage

in normal private pursuits and thus have enough time for sleeping,

entertaining, and other periods of complete freedom from all duties

during which he may leave the premises for purposes of his own.’” 

(Mot. at 35, quoting 29 C.F.R. § 785.23.) Plaintiff contends that

Defendants’ employees do not have complete freedom, as described by

the regulation, because they are on duty for their entire 24-hour

shift, and they cannot regularly leave the facility for their own

purposes since Defendants’ clients require constant care and attention

and because Defendants must satisfy mandatory client/staff ratios. 

(Id. at 35.) Plaintiff further argues that Defendants’ clients

require substantial nighttime supervision, and the employees were

generally not getting substantial sleep. (Id. at 44.) Plaintiff also

contends that Jasmine Hall supervisors do not allow the employees to

leave the premises without advance permission. (Id. at 36.) 

Defendants counter that their employees do have periods of

complete freedom to engage in personal pursuits during their 24-hour

shifts since they regularly have free time during the day to engage in

their private pursuits both on and off the premises. (Defs.’ Opp’n at

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15.) Specifically, Defendants argue that most clients leave the house

to go to work or day programs in the morning and therefore, “[a]fter 9

a.m., the [employees] are free to engage in their personal pursuits”

and they “are free to leave the facility without obtaining permission”

although they sometimes notify their supervisor as a courtesy. (Id.

at 6.) Further, Defendants contend that their employees split up

their duties so that no employee is required to do everything and so

that the employees do not need to monitor the clients at night. (Id.

at 6, 7.) 

Employers seeking to invoke section 785.23 as a methodology

for calculating how many hours the employees actually worked are

required to provide employees with “periods of complete freedom from

all duties.” 29 C.F.R. § 785.23. In Brigham, the Ninth Circuit held

particular factors useful to this inquiry, such as whether the

employer required the employees to live on the premises; whether there

were excessive geographical restrictions on the employees’ movements;

whether the frequency of calls to duty was unduly restrictive; whether

the on-call employee could easily trade on-call responsibilities; and

whether the employee had actually engaged in personal activities

during call-in time. Brigham, 357 F.3d at 936. 

In this case, with the exception of the undisputed

requirement that employees are required to live on the premises (or at

least spend five consecutive days on the premises), the parties

present conflicting evidence on the issue whether employees are able

to leave the premises during the day, whether they need permission to

do so, the amount of free time they have during their shifts to engage

in personal activities, and how often (and for how long) client

interruptions occur at night. (Compare Decls. of Virginia Camba,

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7

Josefa Vasquez, Rosita Daproza, Antonio Darwin, Emiliana Pilar,

Priyarka, Oliver Almendras, Felicianos Almendras, Rose Mendoza, M.

Pilar, Josefa Lastimosa, Valerie Lowery, and Joyce Glover (Exs. G-R,

V) in Supp. of Pl.’s Mot.; with Ex. D (Dep. of Estela Hall), Ex. E

(Dep. of Lyle McCollough), Ex. F (Dep. of Xochilt Zimmerly), Ex. G

(Dep. of Stephenson-Minor) to Decl. of Baldwin J. Lee, Decls. of Grace

Darwin, Evelyn Panares, Mabel Tetteh, and Constancia Ybanez in Supp.

of Def.’s Opp’n.) This conflict presents genuine issues of material

fact as to whether Defendants’ employees have periods of complete

freedom during their 24-hour shifts. 

B. Sleeping Quarters Requirement

Plaintiff also argues that Defendants are not entitled to

invoke section 785.23 since Defendants do not provide individual

sleeping quarters (i.e. bedrooms) to each employee in accordance with

DOL’s Wage and Hour Memorandum (#88.48). (Pl.’s Mot. at 36, 38; Pl.’s

Reply at 17.) Defendants counter that although some employees share

bedrooms, DOL’s Wage and Hour Memorandum does not mandate judicial

deference and therefore the court need not consider it in adjudicating

the applicability of section 785.23. (Defs.’ Opp’n at 10, 13.) 

Regardless of whether the court gives deference to DOL’s

Wage and Hour Memorandum, Plaintiff has not shown that Defendants’

non-compliance with the individual sleeping quarters requirement would

obligate Defendants to pay their employees for all 24 hours they are

on duty. DOL’s Wage and Hour Memorandum explicitly states that

compliance with the individual sleeping quarters requirement will only

permit employers to deduct sleep hours. (See Wage and Hour Memorandum

(#88.48), Ex. A to Pl.’s Reply at 24 (“In order to deduct sleep time

for . . . employees, such employees must be provided private quarters

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in a homelike environment.”).) This suggests that non-compliance with

the individual sleep quarters requirement would only require payment

of sleep hours. Accordingly, Plaintiff has not shown that Defendants’

lack of compliance with DOL’s individual sleeping quarters requirement

“mean[s] . . . that [Defendants’] entire [employment] agreement will

be invalidated and [P]laintiff[] will be entitled to full compensation

for [the entire 24 hour period during which the employees were “onduty”].” Shannon, 82 F. Supp. 2d at 433, n. 15. 

C. Employment Agreement

Plaintiff further contends that Defendants are not entitled

to invoke section 785.23 since Defendants have not entered into a

reasonable employment agreement with their employees for calculating

hours worked. (Pl.’s Mot. at 41.) Defendants counter that their

employees do not work the entire time they are on duty. (Defs.’ Opp’n

at 6.) Section 785.23 requires that the employer enter into a

reasonable agreement with its employees. (See 29 C.F.R. § 785.23.) 

“The cases interpreting [section 785.23] suggest that, at a minimum,

an agreement must take into account some approximation of the number

of hours actually worked by the employee or that the employee could

reasonably be required to work.” Leever v. Carson City, 360 F.3d

1014, 1019 (9th Cir. 2004). 

i. Hours Worked 

Plaintiff argues that Defendants do not have a reasonable

agreement with their employees for calculating hours worked. (Pl.’s

Mot. at 41.) Specifically, Plaintiff contends that the employment

agreement amounts to a policy whereby employees are only paid for 8

hours a day during their five consecutive day shifts yet they are on

duty and have client responsibilities for all 24 hours and cannot

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leave the home for their own purposes during this time. (Pl.’s Mot.

at 43.) Further, Plaintiff re-asserts her argument that Defendants’

employees do not have “complete freedom” under section 785.23 and also

argues that given the amount of overnight supervision that Defendants’

clients require, Defendants’ employees are usually not getting

substantial sleep. (Id. at 42, 44.) Plaintiff also contends that the

employment agreement is unreasonable as it does not attempt to gauge

the amount of time employees actually work. (Id. at 43.) 

Defendants counter that although their “employees are on 24-

hour duty [they] do not work for all that time.” (Defs.’s Opp’n at

6.) Specifically, Defendants contend that “[a]lthough [their

employees] are paid for eight hours a day . . ., it is rarely

necessary to perform work for even a full eight hours in any given

day, much less the 16 hours per day that the DOL claims.” (Id. at

22.) Defendants also contend that their employees get a good night’s

sleep and if they are disturbed during the night to care for a client,

they are instructed to record the time so that they can get

compensated for it. (Id. at 5, 11.) Accordingly, Defendants argue

that their employment agreement is reasonable since, “[a]ssuming [the

employees] work 40 hours per week [although they regularly work less],

[they] earn between $8.65 and $10.38 per hour, plus lodging, food and

medical benefits, and additional compensation for any overtime that

they work or any nighttime sleep interruptions.” (Id.) Defendants

also argue that both George and Estela Hall work as staff members

during the first six months of the opening of a new group home to

accurately gauge the amount of hours worked. (Defs.’ Opp’n at 21.) 

Genuine issues of material fact exist concerning how many

hours the employees actually work, including what is expected of them

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Section 11(c) of FLSA, 29 U.S.C. § 211(c), provides that: 4

“Every employer . . . shall make, keep and preserve such records of the

persons employed by him and of the wages, hours, and other conditions

(continued...)

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under the agreement, how much freedom the employees have to engage in

personal pursuits during the day, whether the employees need advance

permission to leave the premises, whether employees are able to get

mostly uninterrupted sleep and when they do not, whether Defendants

George or Estela Hall instructed them to record any interruptions (so

that they could get paid for them), and how much knowledge, if any,

Defendants George and Estela Hall have of any alleged “overtime” the

employees were clocking. (Compare Dep. of George Hall (Ex. B), Decls.

of Virginia Camba, Josefa Vasquez, Rosita Daproza, Antonio Darwin,

Emiliana Pilar, Priyarka, Oliver Almendras, Felicianos Almendras, Rose

Mendoza, M. Pilar, Josefa Lastimosa, Valerie Lowery, and Joyce Glover

(Exs. G-S, V) in Supp. of Pl.’s Mot. and Decl. of Rebecca Arreola in

Supp. of Pl.’s Reply; with George Hall Decl. ¶ 32, Ex. C (Dep. of

George Hall), Ex. D (Dep. of Estela Hall), Ex. E (Dep. of Lyle

McCollough), Ex. F (Dep. of Xochilt Zimmerly), Ex. G (Dep. of

Stephenson-Minor) to Decl. of Baldwin J. Lee, Decls. of Grace Darwin,

Evelyn Panares, Mabel Tetteh, and Constancia Ybanez in Supp. of Defs.’

Opp’n.) 

ii. Time-Recording Requirement 

Plaintiff also argues that because Defendants failed to keep

detailed records of the hours their employees worked, they cannot show

that their agreement is reasonable and therefore they cannot invoke

section 785.23. (Mot. at 44.) Plaintiff contends Defendants were

required to keep mandatory records of hours worked and that “[s]ection

785.23 requires very specific recordkeeping.” (Pl.’s Mot. at 44.) 4

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and practices of employment maintained by him.” (Come out). 

11

Defendants counter that Plaintiff has failed to cite any legal

authority supporting this contention, arguing that “[s]ection 785.23

arises from the very rationale that the work performed by a worker who

resides at the workplace does not lend itself to easy recordkeeping.” 

(Defs.’ Opp’n at 20.)

Plaintiff has not shown how the detailed record-keeping

requirements of the FLSA apply to Defendants under section 785.23, nor

how Defendants violated FLSA’s time-recording requirement. The plain

language of section 758.23 provides, in part, that: “[i]t is . . .

difficult to determine the exact hours worked under [] circumstances

[where the employees reside on the employer’s premises for extended

periods of time].” 29 C.F.R. § 785.23. 

Since there are genuine issues of material fact concerning

whether Defendants can invoke section 785.23 as a methodology for

calculating how many hours the employees actually worked within the

meaning of the FLSA, Plaintiff’s motion for summary judgment on her

FLSA claims and motion for summary adjudication on the issues related

thereto are denied. 

II. Willfulness 

Both parties seek summary judgment on Plaintiff’s claim that

Defendants willfully violated the FLSA. (Pl.’s Mot. at 45; Defs.’

Mot. at 2.) All causes of action brought under the FLSA must

generally be commenced within two years after the action’s accrual

date. 29 U.S.C. § 255(a). However, “[i]f a particular employer’s

conduct embodies [a] ‘willful violation’ of [the] FLSA, 29 U.S.C. §

255(a) permits extension of the FLSA’s standard two-year statute of

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limitations to a three-year period.” Alvarez v. IBP, Inc., 339 F.3d

894, 908 (9th Cir. 2003). “Willfulness” under the FLSA’s three-year

statute of limitations means that “the employer knew or showed

reckless disregard for the matter of whether its conduct was

prohibited by the statute.” McLaughlin v. Richland Shoe, 486 U.S.

128, 133 (1988). 

Plaintiff argues that she is entitled to summary judgment

because DOL performed investigations of Jasmine Hall in both 1998 and

2004, and that George Hall was provided with copies of the relevant

portions of FLSA and of DOL’s interpretative bulletins at those times. 

(Pl.’s Mot. at 45.) Plaintiff also argues that in 2004, investigator

Sheila Creel told Defendants that they were in violation of FLSA for

not paying their employees for all 24 hours of their duty period. 

(Id. at 46.) Defendants oppose Plaintiff’s motion and seek summary

judgment arguing that DOL’s 1998 investigation did not find any

violations. (Defs.’ Opp’n at 26-27, Defs.’ Mot. at 3-5.) Further,

with regard to the 2004 investigation, Defendants argue that “the mere

fact that Plaintiff informs Defendants of its opinion that the pay

practices violated [] FLSA, does not in itself make the violations

willful.” (Id.)

It is undisputed that no violations of the FLSA were found

during DOL’s 1998 investigation of the Jasmine Hall Care Homes. 

(Def.’s SUF in Supp. of its Mot. ¶¶ 1,2.) Plaintiff has not shown

that Defendants could not have reasonably construed the lack of

violations in 1998 as a broad affirmation that their practices

complied with the relevant provisions of FLSA. Therefore, there are

genuine issues of material fact regarding whether Defendants willfully

violated FLSA as a result of information handed to them during the

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1998 investigation. As for the 2004 investigation, although “private

parties must retain a right to disagree with the Secretary’s

interpretation of the regulations, especially here where the question

is a close one,” the existing factual disputes regarding the

employees’ work arrangements prevent the court from determining

whether Defendants had a legitimate reason to disagree with the DOL

and thus whether the question here is, in fact, close. Brock v.

Claridge Hotel & Casino, 846 F.2d 180, 188, n.9 (6th Cir. 1988). 

Accordingly, both Plaintiff’s and Defendants’ motions for summary

judgment on the willfulness claim are denied. 

CONCLUSION 

For the reasons stated, Plaintiff’s motions for summary

judgment and summary adjudication, and Defendants’ cross-motion for

summary judgment are denied. 

IT IS SO ORDERED.

Dated: July 13, 2007

 

GARLAND E. BURRELL, JR.

United States District Judge

 

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