Eleventh Amendment Bars FLSA Claim against Supervisors at Eastern State Hospital Where Actions Inextricably Tied to Official Duties

Posted on November 21, 2014

Earlier this week, the Fourth Circuit directed the district court to dismiss a FLSA claim brought by a nurse against two of her supervisors at Eastern State Hospital, finding that there was no basis for individual liability and sovereign immunity barred the claims. Martin v. Wood, et al., Case No. 13-2283 (4th Cir. Nov. 18, 2014).

Laura Martin was a registered nurse previously employed by Eastern State Hospital, a hospital operated by the Commonwealth of Virginia in Williamsburg, who filed suit against two of her former supervisors. Martin’s FLSA claims were based on her assertions that she often began performing duties 20 minutes or more before the beginning of her shift and kept working 30-90 minutes after the end of her shift and often through her lunch break. Martin claimed that although this meant that she often worked more than 40 hours in a week, she was only paid for 40 hours. She also claimed that when she complained to her supervisor Milagros Jones (one of the defendants in the action), Jones refused to do anything and attributed the extra time to inefficiency. Martin also claimed that Jack Wood (the other individual defendant), the CEO and director of the hospital, willfully and deliberately failed to correct the failure to pay overtime. The complaint sought damages from both Wood and Jones in their individual capacities in the form of overtime compensation, liquidated damages, and interest. Wood and Jones moved to dismiss the claims on the basis of sovereign immunity, contending that “the complaint centers on their official authority to direct and control employees . . . with respect to their hours and wages and that it fails to allege that they acted in an ultra vires manner against Martin or that they acted to serve any personal interest.” Id., p. 5. They argued that they were entitled to the same sovereign immunity as the hospital because their conduct was “tied inextricably to their official duties.” Id.

The district court denied the motion on the grounds that the complaint alleged significant intentional misconduct on the part of the supervisors and thus were directed toward them in their individual capacities. Wood and Jones filed an interlocutory appeal.
The Fourth Circuit reversed the decision of the district court. The plaintiff had conceded that Eastern State Hospital had sovereign immunity from damages claims under the FLSA under the Eleventh Amendment as an agency of the Commonwealth of Virginia and that this sovereign immunity also extends to state officers acting in their official capacities. In fact, Martin claimed that she had been careful to draft the complaint in such a way as to assert claims against Wood and Jones only in their individual capacities (and not to sue the hospital itself). But the defendants argued that Martin could not get around sovereign immunity by naming them as individual defendants when she really is suing them for actions taken in their official capacities.

The Fourth Circuit explained that an action cannot proceed against state officials based only on the fact that the complaint names an official in his or her individual capacity, quoting from Lizzi v. Alexander, 255 F.3d 128, 137 (4th Cir. for the proposition that “[t]he mere incantation of the term ‘individual capacity’ is not enough to transform an official capacity action into an individual capacity action.” Id., pp. 8-9. the court explained that it must look beyond the form of the complaint and the “conclusory allegations” against the two supervisors. Instead, the court must look at the substance of the claims and consider the following:

(1) were the allegedly unlawful actions of the state officials ‘tied inextricably to their official duties’; (2) if the state officials had authorized the desired relief at the outset, would the burden have been borne by the State; (3) would a judgment against the state officials be ‘institutional and official in character,’ such that it would operate against the State; (4) were the actions of the state officials taken to further personal interests distinct from the State’s interests; and (5) were the state officials’ actions ultra vires.

Id., pp. 9-10 (internal citations omitted) (quoting Lizzi, 255 F.3d at 136 and Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 108 (1984)).

Here, Martin claimed that Eastern State Hospital failed to compensate her for overtime because Wood and Jones refused to approve this compensation, that the supervisors exercised authority to establish and control her hours of work, that in exercising this authority, they failed to include her overtime hours in determining her weekly pay, and that in doing so, they acted directly and indirectly in the interest of the hospital. There was no allegation that the two individual defendants had “acted in an ultra vires manner or attempted to serve personal interests distinct from the Hospital’s interest.” Id., p. 10. Instead, “virtually every factor indicates that Wood and Jones are being sued in their official capabilities,” as the complaint alleges that they had the authority to authorize overtime pay and that if they had done so, it would have been paid by Eastern State Hospital. Id., p. 11. “The inevitable conclusion follows that Wood and Jones’ actions were ‘inextricably tied’ to their official duties at the Hospital.’” Id. Therefore, the suit must be dismissed because Virginia is the real party in interest and protected from such a suit by the doctrine of sovereign immunity. Id.

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