Detroit District Court Certifies Antitrust Class Of Registered Nurse

What is the right compensation for a particular job? That's the question virtually every employer must face. Pay too little, and the employer may not be able to fill a position or must settle for less than the best candidates. Pay too much, and the employer loses money and may create other problems, including the morale of other employees, additional hurdles in managing substandard performers, and other aberrations in its compensation system.

For that reason, many employers investigate what wages are being paid in the market place, often subscribing to third party services to provide competitive wage data. The use of these services is driven in part by Department of Justice and Federal Trade Commission guidelines that create a safe harbor of sorts to permit employers to use data that is sufficiently non-specific to assist in making compensation decisions. The purpose for these guidelines is to avoid potential antitrust violations where it can be claimed that employers have conspired to fix wages. If that system fails, the employer can be faced with potentially staggering liability, as a recent case demonstrates.

In Cason-Merenda v. VHS of Michigan, Inc., Case No. 2:06-15601-GER-DAS (E.D. Mich., Sept. 13, 2013), the plaintiffs claimed that a group of hospitals in the Detroit area improperly shared wage information and colluded to fix the wages paid to tens of thousands of registered nurses. Perhaps significantly, all but one of the hospitals settled their claims on a class-wide basis. The court denied, in part, the remaining defendant's motion for summary judgment, and also denied its motion to reject the plaintiffs' expert's testimony on Daubert grounds. Following those rulings, the plaintiffs sought certification of a class of approximately 20,000 registered nurses for wage decisions going as far back as 2002. Given the magnitude of the claims, and the difficulty of reconstructing compensation decisions in the fast-paced world of health care from over a decade before, it isn't hard to see why the other hospitals had chosen to settle.

The last defendant, however, did make cogent arguments in opposition to certification. As the court itself noted, different hospitals used different surveys at different times and they used them differently, if at all. A significant part of the nurses' compensation consisted of things other than wages, and those components varied by employer and location (although the parties disagreed over the degree). It...