Third Circuit Affirms Dismissal Of FLSA Overtime Claims In Hospital Meal Break Cases

On August 26, the United States Court of Appeals for the Third Circuit affirmed the District Court's dismissal of the Fair Labor Standards Act (FLSA) overtime claims brought against a myriad of health care systems and their affiliates in the Greater Philadelphia area.1 Pepper Hamilton LLP represents two of the defendants, Albert Einstein Healthcare Network and Abington Memorial Hospital, and their affiliates.

In November of 2009, Thomas & Solomon LLP, a plaintiffs' firm that has filed dozens of nearly identical cases around the country, alleged that area health care systems had failed to appropriately compensate their employees for all hours worked, in violation of the FLSA. In particular, the complaints alleged that the plaintiffs, nurses and other patient-care professionals, were not compensated properly when defendants maintained three unlawful timekeeping and pay polices: (1) a "Meal Break Deduction Policy," whereby plaintiffs allege that the defendants' timekeeping system automatically deducted 30 minutes of pay daily for meal breaks without ensuring that the employees actually received a break; (2) the "Unpaid Pre- and Post-Schedule Work Policy," whereby plaintiffs allege that the defendants prohibited employees from recording time worked outside of their scheduled shifts; and (3) the "Unpaid Training Policy," whereby plaintiffs allege that the defendants did not pay employees for time spent at "compensable" training sessions. Because of the policies, the plaintiffs alleged that they regularly worked hours both under and in excess of 40 per week and were not paid for all of those hours.

Judge Cynthia M. Rufe of the U.S. District Court for the Eastern District of Pennsylvania dismissed the initial complaint, and the two subsequent amended complaints filed by the plaintiffs. After the dismissal of the Third Amended Complaint, the plaintiffs appealed the decision to the United States Court of Appeals for the Third Circuit.

In its 16-page opinion, the Court of Appeals held that plaintiffs did not "plausibly plead" that they worked over 40 hours in a particular week and were not paid overtime. In deciding the level of detail necessary to plead an FLSA overtime claim, the court agreed with the Second Circuit's approach in Lundy v. Catholic Health System of Long Island, Inc., where it held that "in order to state a plausible FLSA overtime claim, a plaintiff must sufficiently allege [40] hours of work in a given workweek as well as some...