United States District Court, N.D. Iowa, Cedar Rapids Division
SHARON BERTROCHE, M.D; GINA PERRI, M.D.; and ARLEEN ZAHN-HAUSER, M.D., Plaintiffs,
MERCY PHYSICIAN ASSOCIATES, INC., Defendant. MERCY PHYSICIAN ASSOCIATES, INC., Counter Claimant,
GINA PERRI, M.D.; and ARLEEN ZAHN-HAUSER, M.D., Counter Defendants.
MEMORANDUM OPINION AND ORDER
Williams, United States District Judge.
PROCEDURAL AND FACTUAL BACKGROUND
MOTION TO STRIKE
SUMMARY JUDGMENT STANDARD
SUMMARY JUDGMENT ANALYSIS
Equal Pay Act
Sex-Based “Wage Rates”
Equal Pay Act Damages
Breach of Contract and Iowa Wage Payment Collection Law
Damage Disclosures ...................................... 27
Inadequate Staff ...........................................
Dr. Zahn-Hauser's Breach of Contract Claims ...... 35
Summary Judgment Conclusion
matter is before the Court on Mercy Physician Associates,
Inc.'s (“defendant”) Motion for Summary
Judgment (Doc. 85) and on defendant's Motion to Decertify
the Collective Action (Doc. 86). Sharon Bertroche, Gina
Perri, and Arleen Zahn-Hauser (collectively,
“plaintiffs”) timely resisted both motions (Docs.
92 (resistance to motion to decertify); 100 (resistance to
motion for summary judgment)), and defendant timely filed
reply briefs in support of each motion (Docs. 98 (reply in
support of motion to decertify); 110 (reply in support of
motion for summary judgment)). Defendant also filed an
erratum to correct an error that appeared in its brief in
support of the motion to decertify. (Doc. 89).
Plaintiffs' Motion to Strike Testimony of Dr. Mary Dunn
Baker from Defendant's Motion for Summary Judgment is
also before the Court. (Doc. 114). Defendant timely resisted
plaintiffs' motion to strike. (Doc. 116). The Court heard
oral argument on August 23, 2019. For the following reasons,
defendant's Motion for Summary Judgment (Doc. 85) is
granted in part and denied in part,
defendant's Motion to Decertify the Collective Action
(Doc. 86) is granted, and plaintiffs'
Motion to Strike (Doc. 114) is denied.
PROCEDURAL AND FACTUAL BACKGROUND
November 3, 2016, plaintiff Sharon Bertroche, M.D., filed a
state court petition against defendant alleging a violation
of the Iowa Wage Payment Collection Law, Iowa Code Chapter
91A, and a claim for breach of contract. (Doc. 4). On April
27, 2018, Dr. Bertroche amended her state court petition to
add a claim for violation of the federal Equal Pay Act, Title
29, United States Code, Section 206(d)(1). (Doc. 6). After
Dr. Bertroche added the federal claim, defendant removed the
action to this Court on the basis of federal question
jurisdiction. (Doc. 1). Subsequently, Dr. Bertroche filed a
motion to conditionally certify a collective action under
Title 29, United States Code, Section 216(b). (Doc. 14). The
Court granted that motion to the extent Dr. Bertroche sought
conditional certification. (Doc. 38, at 7). In connection
with the conditional certification, the Court extended
certain scheduling deadlines, including the deadlines to add
parties and amend pleadings. (Doc. 41, at 5-6). Plaintiff
Gina Perri, M.D., and Arleen Zahn-Hauser, M.D., each timely
filed a “consent to become a party plaintiff to the
claim under the Equal Pay Act, 29 U.S.C. 206(d)(1)” in
this case. (Docs. 44, 46).
Bertroche subsequently moved for leave to file a second
amended complaint naming Drs. Perri and Zahn-Hauser as
additional plaintiffs on the Equal Pay Act claim (Doc. 47),
and the Court granted the motion (Doc. 48). The motion was
premised on the Court's previous conditional
certification and did not seek leave to add Drs. Perri and
Zahn-Hauser as plaintiffs on either of the other two claims.
Plaintiffs later filed another motion to amend the complaint
under Federal Rule of Civil Procedure 15, that time seeking,
among other things, leave “to add additional factual
allegations and allegations against [defendant], including .
. . breach of contract and wage claims against [defendant] on
behalf of Dr. Perri and Dr. Zahn-Hauser.” (Doc. 58, at
1-2). The Court granted plaintiffs' motion (Doc. 61), and
the Third Amended Complaint (“complaint”) was
docketed and remains the operative complaint (Doc. 62).
In re Atlas Van Lines, Inc., 209 F.3d 1064, 1067
(8th Cir. 2000) (“It is well-established that an
amended complaint super[s]edes an original complaint and
renders the original complaint without legal effect.”
are all female physicians, each of whom entered into a
“Primary Care Physician Employment Agreement”
with defendant. (Docs. 62, at 1-2, 7; 63, at 1-3, 12). Under
those agreements, each plaintiff worked for defendant as a
family practice physician. (Docs. 62, at 7; 63, at 12). The
agreements provide that certain administrative
responsibilities were delegated to defendant:
Office space, equipment, furniture, supplies,
[Defendant] shall provide or arrange to provide office space
for Physician . . ., which shall be furnished with all
equipment, furniture, supplies and materials reasonably
necessary for Physician to perform the duties required
hereunder. Moreover, [defendant] shall provide or arrange to
provide the repairs and support services for said equipment
Office staff and administrative
(a) [Defendant] shall provide or arrange to provide and
administratively supervise all personnel reasonably necessary
to staff the Clinic, including an office manager, nurses,
receptionists, transcriptionists and bookkeepers. [Defendant]
agrees to consult with Physician with regard to the quantity,
qualifications, hiring, evaluation, discipline and
termination of said personnel.
(b) [Defendant] shall provide or arrange to provide all
administrative services reasonably necessary for the
operation of [Physician's Clinic], including but not
limited to personnel management and training, up-to-date
policy and procedure manuals, quality improvement and risk
management services, billing and collections, accounts
payable, office financial reports and statistical
information, and promotion of [defendant's] network in
Physicians and Physician Extenders.
[Defendant] shall use its best efforts to employ those
qualified physicians and physician extenders reasonably
necessary to assist Physician in the performance of the
duties required hereunder and to provide coverage for
Physician during time off duty.
(Docs. 85-3, at 40-41 (Dr. Bertroche's contract);
id., at 138 (Dr. Perri's contract);
id., at 203-04 (Dr. Zahn-Hauser's contract)
(paragraph enumerations omitted)).
Bertroche worked for defendant from 1995 through 2016 (Docs.
105, at 1; 110-1, at 1), Dr. Perri worked for defendant from
2007 through 2017 (Docs. 105, at 1; 110-1, at 1), and Dr.
Zahn-Hauser worked for defendant from 2006 through 2019
(Docs. 105, at 1; 110-1, at 1). At least three male
physicians also worked for defendant over the course of
approximately the same time period. (Docs. 105, at 1-2;
110-1, at 2). Of those three male physicians, two are family
practice physicians. (Docs. 105, at 1-2; 110-1, at 2).
three male physicians, like plaintiffs, each signed a
“Primary Care Physician Employment Agreement”
with defendant. (Docs. 105, at 2; 110-1, at 2). The
agreements-those signed by plaintiffs and those signed by the
male physicians-all contained the same list of “Primary
Care Physicians' Duties, ” and each agreement used
the same “Team Bonus Model” compensation program.
(Docs. 105, at 2; 110-1, at 2-3). Plaintiffs assert that even
though all of defendant's primary care physicians
“performed the same basic job duties of examining,
evaluating[, ] and treating [defendant's] patients”
(Doc. 105, at 2), defendant paid its female physicians,
including plaintiffs in this case, less than defendant paid
its male physicians for substantially equal work in violation
of the Equal Pay Act (Docs. 62, at 7-9; 105, at 2-5). In
direct response to allegations under the Equal Pay Act,
defendant asserts the following affirmative defense:
Plaintiffs' compensation was marginally different from
that of comparable physicians, with differences attributed to
their individual and voluntary practice decisions within an
evenly applied compensation formula. The physician
compensation formula agreed to by [p]laintiffs is evenly
applied across physicians and results in compensation based
upon quantity and quality of production, including practice
revenue minus practice expenses. Defendant does not utilize
gender in any manner as a factor for compensation, and allows
individual [physicians] flexibility to practice medicine. The
disparate practice choices between [p]laintiffs and other
physicians of both genders[ ] result in a difference in job
(Doc. 63, at 19). That is, although defendant acknowledges
that each physician received a different amount of total
compensation, defendant contends that those differences were
based on each physician's specific practice and were not
based on a difference in the factors used to calculate
compensation between men and women. (See Doc. 85-1,
plaintiffs amended their complaint under Federal Rule of
Civil Procedure 15, Drs. Perri and Zahn-Hauser each asserted
two additional claims in their own names individually. (Doc.
62, at 9-12). Each of those two plaintiffs asserted a claim
for breach of her employment agreement and for violation of
the Iowa Wage Payment Collection Law, Iowa Code Chapter 91A.
(Id.). Under Iowa Code Chapter 91A, Drs. Perri and
Zahn-Hauser each seek, in part, unpaid wages and liquidated
damages. (Id., at 9-11).
now seeks summary judgment on all claims, except for a
liquidated damages claim that Dr. Bertroche has asserted
under her Chapter 91A claim. (Doc. 85, at 1). As to the Equal
Pay Act claim, defendant moves for summary judgment on two
different bases, both of which contain significant legal and
factual overlap. First, defendant argues that plaintiffs
cannot establish a prima facie case of sex
discrimination because plaintiffs cannot show that female
physicians were compensated at a different rate of pay than
male physicians. (Doc. 85-1, at 5-15). Alternatively,
defendant argues that it has satisfied the affirmative
defense set forth above and, specifically, that defendant has
shown “that physicians were paid under a system that
measured earnings by production quantity and quality using
physician revenue, cost, and profits.” (Doc. 85-1, at
15). Finally, defendant argues that all of the claims on
which defendant moves must be dismissed because plaintiffs
have failed to come forward with a cognizable theory of
damages. (Id., at 19-31). Defendant has also filed a
motion to decertify the collective action. (Doc. 86). After
considering plaintiffs' motion to strike, the Court will
first address defendant's arguments under the Equal Pay
Act and will then turn to defendant's damages arguments
before, finally, addressing whether to decertify the
collective action. See Ahle v. Veracity Research
Co., 738 F.Supp.2d 896 (D. Minn. 2010) (considering
motion for summary judgment before addressing motion for
MOTION TO STRIKE
seek to have Mary Dunn Baker, Ph.D.'s expert witness
report stricken from the summary judgment record under
Federal Rule of Civil Procedure 12(f). (Doc. 114). In
support, plaintiffs assert that, through no fault of their
own, they have been unable to depose Dr. Baker and have been
prejudiced by their inability to do so. (Id., at
2-3). Plaintiffs further assert that defendant's
“failure to produce” Dr. Baker to be deposed
“violates [p]laintiffs' right of due
process.” (Id., at 2).
filed their motion after summary judgment briefing had
closed. Before they filed their resistance, plaintiffs knew
they would be doing so without having deposed Dr. Baker.
Indeed, Dr. Baker's deposition was initially scheduled to
take place several days before plaintiffs' deadline to
file their resistance, but defense counsel cancelled that
deposition one week before plaintiffs were due to file their
resistance. See LR 56(b) (permitting a party 21 days
to resist a motion for summary judgment); Docs. 85 (motion
for summary judgment, filed on June 13, 2019), 114-2, at 1
(email from defense counsel dated June 28, 2019, cancelling
the deposition scheduled for July 1, 2019). Plaintiffs did
not, however, raise this issue before filing their
resistance, or at the time they filed their resistance. The
parties rescheduled Dr. Baker's deposition to take place
after summary judgment briefing had closed (see Doc.
114, at 2),  and it was only after this rescheduled
deposition was cancelled that plaintiffs raised the prejudice
issue. If plaintiffs thought prejudice would result from
their inability to depose Dr. Baker before resisting
defendant's motion for summary judgment, plaintiffs
should have raised this issue at the time they filed their
resistance, at the latest. The Court fails to see how, under
these circumstances, prejudice arose from the second
cancellation of Dr. Baker's deposition.
Court enjoys “liberal discretion under Rule
12(f).” Nationwide Ins. Co. v. Cent. Mo. Elec.
Co-op., Inc., 278 F.3d 742, 748 (8th Cir. 2001).
“Motions to strike under [Rule] 12(f) are viewed with
disfavor and are infrequently granted.” Lunsford v.
United States, 570 F.2d 221, 229 (8th Cir. 1977)
(citation omitted). Here, the Court will not strike Dr.
Baker's report from the summary judgment record.
Plaintiffs knew, one full week before filing their
resistance, of the potential prejudice that may result from
crafting their resistance without having deposed Dr. Baker.
Even so, plaintiffs did not claim prejudice at that time, or
at any time thereafter, until after summary judgment briefing
had closed, nor did plaintiffs seek an extension of the
deadline to file their resistance on this
basis. Plaintiffs' motion to strike (Doc.
114) is denied.
SUMMARY JUDGMENT STANDARD
judgment is appropriate when “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). When asserting that a fact is undisputed
or is genuinely disputed, a party must support the assertion
by “citing to particular parts of materials in the
record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations
. . ., admissions, interrogatory answers, or other
materials.” Fed.R.Civ.P. 56(c)(1)(A); see Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Alternatively, a party may “show[ ] that the materials
cited do not establish the absence or presence of a genuine
dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” Fed.R.Civ.P.
56(c)(1)(B). More specifically, “[a] party may object
that the material cited to support or dispute a fact cannot
be presented in a form that would be admissible in
evidence.” Fed.R.Civ.P. 56(c)(2).
is “material” if it “might affect the
outcome of the suit under the governing law . . ..”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986) (citation omitted). “An issue of material fact
is genuine if it has a real basis in the record, ”
Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir.
1992) (citation omitted), or “when a reasonable jury
could return a verdict for the nonmoving party on the
question, ” Wood v. DaimlerChrysler Corp., 409
F.3d 984, 990 (8th Cir. 2005) (internal quotation marks and
citation omitted). Evidence that presents only “some
metaphysical doubt as to the material facts, ”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986), or evidence that is “merely
colorable” or “not significantly probative,
” Anderson, 477 U.S. at 249-50, does not make
an issue of fact genuine. In sum, a genuine issue of material
fact requires “sufficient evidence supporting the
claimed factual dispute” that it “require[s] a
jury or judge to resolve the parties' differing versions
of the truth at trial.” Id. at 249 (citation
and internal quotation marks omitted).
party moving for summary judgment bears “the initial
responsibility of informing the district court of the basis
for its motion and identifying those portions of the record
which show a lack of a genuine issue.”
Hartnagel, 953 F.2d at 395 (citation omitted). Once
the moving party has met this burden, the nonmoving party
must go beyond the pleadings and by depositions, affidavits,
or other evidence designate specific facts showing that there
is a genuine issue for trial. See Mosley v. City of
Northwoods, 415 F.3d 908, 910 (8th Cir. 2005).
determining whether a genuine issue of material fact exists,
courts must view the evidence in the light most favorable to
the nonmoving party, giving that party the benefit of all
reasonable inferences that can be drawn from the facts.
Tolan v. Cotton, 572 U.S. 650, 651 (2014);
Matsushita, 475 U.S. at 587-88 (citation omitted);
see also Reed v. City of St. Charles, 561
F.3d 788, 790 (8th Cir. 2009) (stating that in ruling on a
motion for summary judgment, a court must view the facts
“in a light most favorable to the non-moving party-as
long as those facts are not so ‘blatantly contradicted
by the record . . . that no reasonable jury could
believe' them” (omission in original) (quoting
Scott v. Harris, 550 U.S. 372, 380 (2007))). A court
does “not weigh the evidence or attempt to determine
the credibility of the witnesses.” Kammueller v.
Loomis, Fargo & Co., 383 F.3d 779, 784 (8th Cir.
2004) (citation omitted). “Rather, the court's
function is to determine whether a dispute about a material
fact is genuine . . ..” Quick v. Donaldson
Co., 90 F.3d 1372, 1376-77 (8th Cir. 1996).
SUMMARY JUDGMENT ANALYSIS
Equal Pay Act
Equal Pay Act, Title 29, United States Code, Section 206, is
one of many provisions contained within the Fair Labor
Standards Act, Title 29, United States Code, Sections 201,
et. seq. Under the Equal Pay Act, an employer may
not discriminate against employees “on the basis of sex
by paying wages to employees . . . at a rate less than the
rate at which he pays wages to employees of the opposite sex
. . . for equal work on jobs the performance of which
requires equal skill, effort, and responsibility . .
..” 29 U.S.C. § 206(d)(1). An action to recover
damages under the Equal Pay Act “may be maintained
against any employer . . . by one or more employees for and
in behalf of himself or themselves and other employees
similarly situated.” 29 U.S.C. § 216(b).
Eighth Circuit Court of Appeals has addressed how a plaintiff
may establish liability under the Equal Pay Act, as well as
those affirmative defenses that are available in defending
against an Equal Pay Act claim:
A plaintiff must first establish a prima facie case
that women were paid less than men in the same establishment
for equal work requiring equal skill, effort, and
responsibility and performed under similar working
conditions. If a plaintiff establishes a prima facie
case, the burden then shifts to the defendant to prove one of
four statutory affirmative defenses. Id. at 1081.
Those defenses require an employer to prove that any wage
differential is explained by “(i) a seniority system;
(ii) a merit system; (iii) a system which measures earnings
by quantity or quality of production; or (iv) a differential
based on any other factor other than sex.” 29 U.S.C.
§ 206(d)(1). In an [Equal Pay Act] case, a defendant
cannot escape liability merely by articulating a legitimate
non-discriminatory reason for the employment action. [The
defendant] must prove that the pay differential was based on
a factor other than sex.
Claims under the [Equal Pay Act] generally have a two[-]year
statute of limitations. 29 U.S.C. § 255(a). Evidence of
wage discrimination need not be confined to the [Equal Pay
Act's] two[-]year limitation period, however, for a court
may consider relevant evidence from before that period while
assessing the worker's claims.
Price v. N. States Power Co., 664 F.3d 1186, 1191
(8th Cir. 2011) (internal citations, quotation marks, and
Sex-Based “Wage Rates”
arguing that plaintiffs cannot establish a prima
facie case of wage discrimination based on sex,
defendant first asserts that the Court must look beyond total
compensation and examine whether plaintiffs were paid at
rates equal to their male counterparts. From there,
defendant argues that plaintiffs' Equal Pay Act claims
must fail because “[p]laintiffs have not, and cannot,
set forth any differing ‘wage rate.'” (Doc.
85-1, at 10). The Court agrees that the operative question is
the “rate” at which plaintiffs were paid, as
compared to defendant's male physicians. The Court finds,
however, that plaintiffs have generated a genuine issue as to
whether plaintiffs were paid at a different
“rate” than defendant's male physicians.
Broadus v. O.K. Industries, Inc., the Eighth Circuit
Court of Appeals held that “[t]o establish a violation
of the Equal Pay Act, an employee must demonstrate that the
employer paid male and female employees different wage
rates for substantially equal work.” 226 F.3d
937, 941 (8th Cir. 2000) (emphasis added) (citation omitted).
In the more recent case of Price v. Northern States Power
Co., however, the Eighth Circuit explained what a
plaintiff must show to establish a prima facie case
without referencing a “wage rate” or
“rate of pay:” “A plaintiff must . . .
establish a prima facie case that women were paid
less than men in the same establishment for equal work
requiring equal skill, effort, and responsibility and
performed under similar working conditions.” 664 F.3d
unclear to this Court whether the Eighth Circuit intended to
modify the relevant inquiry by omitting any explicit
reference to “wage rate” or “rate of pay,
” or whether Price articulates the same
“wage rate” inquiry in different terms. The Equal
Pay Act, however, explicitly refers to “wage
rate” multiple times and prohibits “wage
No employer . . . shall discriminate . . . between employees
on the basis of sex by paying wages to employees . . . at
a rate less than the rate at which he pays wages to
employees of the opposite sex . . . an employer who is paying
a wage rate differential in violation of this
subsection shall not . . . reduce the wage rate of
29 U.S.C. § 206(d)(1) (emphasis added). In the absence
of clear precedent to the contrary, the Court will follow the
language of the statute and will consider whether plaintiffs
have generated a genuine issue of fact as to whether they
were paid at a different “rate” than their male
Court finds that there is a genuine dispute as to whether
plaintiffs were compensated at a different “rate”
than their male counterparts. Put simply, the Court cannot
discern, on this record, how each physician's
compensation was determined. Defendant argues that the wage
rate was simply revenue minus expenses equals income. (Doc.
85-1, at 12). Although defendant asserts that there cannot be
a difference in the “wage rate” because each
physician's compensation is calculated under this
identical formula (Doc. 85-1, at 8-11), defendant has not
proven that the variables inputted into that formula are
identical such that all “wage rates” must also be
identical. Defendant controls factors that can affect
doctors' revenue and expenses. As noted, defendant has a
responsibility under the contract to provide facilities and
staffing for the doctors. If, for example, defendant provided
male doctors with better staffing support than they did
female doctors, then by its conduct defendant may have
intentionally or unintentionally affected female doctors'
ability to generate revenue and minimize expenses. Defendant
has provided the Court with volumes of compensation data, but
defendant has not provided an interpretation of that data
sufficiently for the Court to determine whether all
physicians were, in fact, paid according to the same
“wage rate.” Defendant has not shown that female
doctors and male doctors were provided the same revenue or
expenses. Defendant has, then, failed to show that plaintiffs
are incapable of demonstrating that they were paid a
different “wage rate” than defendant's male
physicians. Thus, summary judgment is inappropriate on this
issue, and defendant's motion is denied
to the extent defendant asserts that plaintiffs cannot show
they were paid a different “wage rate” than
defendant's male physicians.
defendant has not shown entitlement to summary judgment based
on their affirmative defense that physicians were compensated
based on “a system that measured earnings by production
quantity and quality using physician revenue, cost, and
profits.” (Doc. 85-1, at 15). Plaintiffs have
produced evidence showing that even if this system was used
to determine compensation, sex also played a role in
determining each plaintiff's “wage rate.”
This is sufficient to defeat defendant's motion for
summary judgment based on its affirmative defense. Price
Waterhouse v. Hopkins, 490 U.S. 228, 248 (1989)
(“[A]lthough the Equal Pay Act expressly permits
employers to pay different wages to women where disparate pay
is the result of a ‘factor other than sex,' . . .
it is the employer, not the employee, who must prove that the
actual disparity is not sex linked.” (citations
omitted)), superseded by statute on other grounds, as
stated in Burrage v. United States, 571 U.S. 204, 213
n.4 (2014); Irby v. Bittick, 44 F.3d 949, 954 (11th
Cir. 1995) (“[D]efendant[ ] must show that the factor
of sex provided no basis for the wage
differential.” (emphasis in original) (citation and
internal quotation marks omitted)), disagreed with on
other basis by Buntin v. Breathitt Cty. Bd. of Educ.,
134 F.3d 796, 799 n.7 (6th Cir. 1998).
articulated in Price, “the defendant must
prove that the pay differential was based on a factor other
than sex, ” and a defendant will not meet its burden
simply “by articulating a legitimate non-discriminatory
reason for the employment action.” 664 F.3d at 1191
(citation and internal quotation marks omitted).
“‘The burden of proving that a factor other than
sex is the basis for a wage differential is a heavy
one.'” Fagen v. Iowa, 301 F.Supp.2d 997,
1007 (S.D. Iowa 2004) (quoting Brennan v.
Owensboro-Daviess Cty. Hosp., 523 F.2d 1013, 1031 (6th
Cir. 1975)). Plaintiffs' expert, David C. Sharp, Ph. D.,