Wage and Hour Class Actions Against Healthcare Employers Spreading

Healthcare systems across the nation employ timekeeping systems that automatically deduct 30 minutes for meal breaks.  Employees are given the opportunity to manually override the automatic meal deduction if their meal break was substantially interrupted.  What started as a localized outbreak in the Northeast by a single law firm challenging this payroll practice at large healthcare systems in New York, Pennsylvania, and Massachusetts, has now become a nationwide epidemic, as one lawsuit after another alleges that healthcare employers have failed to compensate employees for “working lunches.”  Many more law firms are getting into the act and filing wage and hour class and collective actions against healthcare employers in state and federal courts across the country, including, in addition to the states listed above, e Florida, Texas, Illinois, Ohio, California, Tennessee, Michigan, Indiana, and the District of Columbia.

In addition to claims of working during unpaid meal periods, employees are also asserting claims for other alleged violations, including misclassification, miscalculation of the regular rate of pay in connection with varying shifts, breach of contract, failure to maintain accurate records, violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and the Employee Retirement Income Security Act (ERISA), as well as and other types of  “off-the-clock” work, such as unpaid training time, travel time, and time spent before and after shifts.  In the last six months, more than 300 such suits have been filed, and the number of cases being filed continues to grow.

The Internet has helped fuel this growth and has enabled plaintiffs’ attorneys to more efficiently and expeditiously amass information about employers’ practices, and reach employees—who are potential plaintiffs—across the country.  For example, plaintiffs’ attorneys have set up websites to provide information to employees about current “investigations” of healthcare employers, urging employees of these institutions to contact them regarding compensation issues.  The Internet also provides nearly instantaneous information about significant settlements (or, more rarely, judgments) in wage and hour class actions regardless of location.  Moreover, the pleadings filed by successful plaintiffs’ counsel, also typically available online, provide a template for lawyers nationwide.  Due to the sheer size of these cases, the level of disruption they may cause, the large potential damages, the potential for adverse publicity, and the cost of litigation, many companies and institutions feel compelled to pay significant amounts to settle these lawsuits. 

  Examples of some recently publicized settlements include:

  • A class action against a large hospital by current and former nurses, social workers and aides who claimed they were denied overtime and rest and meal periods in violation of the California Labor Code.  The court approved a settlement of $15 million.
  • A class action by 3,000 home healthcare workers who claimed they were not paid for time spent (or expenses) traveling between patient visits. The employer agreed to pay $2 million dollars to settle the claim.
  • A settlement of over $9 million by a large hospital and healthcare system to a class of nurses and other employees who claimed they worked during uncompensated rest breaks that were automatically deducted from their time cards and paychecks.  
  •  A U.S. Department of Labor settlement for more than $ 1.7 million to 4,000 nurses working for a Missouri medical corporation comprised of seven healthcare centers and hospitals.  The DOL’s investigation arose out of allegations that the nurses frequently worked during unpaid meal periods that were automatically  deducted by an electronic timekeeping system.

If the last six months are any indication, we can expect the surge in wage and hour class actions to continue to increase and spread further across the country.

This entry was written by Robert Wolff.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.