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Dismissing Hospital FLSA Collective Action, Court Rejects “Integrated Healthcare System” Claim

For the second time in the past week, the U.S. District Court for the Eastern District of New York has dismissed a class and collective action against 25 hospitals and healthcare facilities that the plaintiffs claimed were part of a single “integrated healthcare system.” Once again, the court criticized the broad, conclusory allegations in the complaint and made several points that could be helpful to healthcare employers facing wage and hour class and collective actions.

As in a number of other recent FLSA collective actions, in Wolman v. Catholic Health System of Long Island, Inc., the court emphasized that conclusory allegations of an integrated enterprise do not establish employer status. Even if the healthcare facilities advertised themselves as an “integrated healthcare system,” had “common ownership,” or were engaged in a “joint venture,” the court stated, those allegations were insufficient to plead joint employment under the FLSA. Accordingly, the court dismissed with prejudice all of the claims in the case against all of the defendants, except Good Samaritan Hospital Medical Center, the entity that actually employed the three named plaintiffs.

The court also criticized the plaintiffs’ continued “inartful, conclusory pleading” in their fourth amended complaint, which asserted claims for automatic deductions from pay for meal periods, and failure to pay overtime for pre-shift and post-shift work and attendance at training programs in violation of the Fair Labor Standards Act, New York Labor Law, and various state common laws. The court found that, despite its 40 pages and 246 paragraphs, the complaint contained “threadbare recitals of the elements of a cause of action,” without sufficient factual support for the claims. Over a year ago, the court dismissed these claims  in the nearly identical second amended complaint filed in the case. Following the filing of a third amended complaint, the court ordered the plaintiffs to file a more definite statement. Rather than doing so, the plaintiffs filed their fourth amended complaint.

In its most recent decision in the case, in addition to dismissing the claims against all of the alleged “joint employers,” the court made several points that will be helpful to healthcare employers facing these types of complaints:

  • Automatic meal-break deductions are not per se unlawful. The court specifically held that the hospital’s automatic meal-break deduction policy is not per se illegal. As the court explained, “there is no duty to ensure that employees are not working through unpaid meal breaks, and employers utilizing an automatic meal deduction policy may legally shift the burden to their employees to cancel the automatic deduction if they work through an unpaid meal break.” Even if such a policy was illegal, the named plaintiffs failed to plead that they were injured by the policy. The plaintiffs only alleged that their meal periods were “typically” missed or interrupted. They failed to include any facts about the nature and frequency of the interrupted meal periods to establish that it was compensable work time.
  • Asserting class claims that a policy violated the FLSA does not relieve named plaintiffs of the burden to show they were injured by that policy. For example, the court found insufficient one plaintiff’s claim that he was owed overtime for attendance at training because he failed to state where and when the training occurred or whether it was mandatory. Another plaintiff’s claim for overtime was deficient because she failed to approximate the total number of unpaid overtime hours that she worked.

Nevertheless, although the court dismissed with prejudice the claims of one of the plaintiffs who conceded that he never worked more than 40 hours in a week, it allowed the other two named plaintiffs limited leave to file a fifth amended complaint against the hospital that actually employed them. The court did, however, instruct the plaintiffs to not merely add paragraphs to the “useless, conclusory allegations which are repeated many times over.” In addition, the court indicated that it would consider imposing sanctions if the plaintiffs failed again to correct the deficiencies in their common law claims.

Healthcare employers can seek some comfort in the fact that, as previously reported on this blog, courts are beginning to more carefully scrutinize the broad, conclusory allegations in the wage-and-hour class and collective actions that have recently plagued healthcare employers. The willingness of some judges to allow plaintiffs multiple opportunities to replead deficient complaints, however, remains costly to employers and is a drain on judicial resources. 

Photo credit: MBPhoto, Inc.

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