Wage And Hour Class Actions In The Healthcare Industry

1. THE SCOPE OF THE PROBLEM

   Healthcare employers have not been immune to the dramatic increase in wage and hour class and collective actions that have plagued employers in the last few years. What started in 2008 as a localized outbreak by a single law firm filing class and collective actions against hospital systems in Rochester, New York challenging automatic 30-minute pay deductions for meal periods has now become an epidemic. The cases spread quickly because the same firm filed nearly identical lawsuits against large healthcare systems in Syracuse, Utica, and Buffalo, New York; Pittsburgh and Philadelphia, Pennsylvania; and Boston, Massachusetts.

   In 2010, the same firm filed 22 wage and hour class and collective actions in federal and state courts against prominent New York City area hospital systems. The range of employers named in those cases was extensive and included some of New York's most notable healthcare institutions. In addition to the hospital systems named in the caption of the complaints, the lawsuits also named hundreds of other healthcare facilities that the plaintiffs alleged are subsidiary, joint or affiliated organizations throughout the entire New York metropolitan area, including community hospitals, rehabilitation centers, clinics, laboratories, research institutions, veterans' hospitals, psychiatric hospitals, drug and alcohol rehabilitation facilities, adult day care facilities, fertility centers, and other specialized institutions for diagnosis, care and treatment of conditions such as AIDs, Alzheimer's Disease, epilepsy, cardiac and vascular disease, pediatric diseases, cancer and blood disorders, and many other types of illness or disease. Some of the cases also named the president and/or CEO of the healthcare institution as individual defendants. The putative class sizes were also broad, potentially reaching 100,000 employees in some cases.

   Since then, many more law firms have filed wage and hour class and collective actions against healthcare employers in state and federal courts across the country, including Alabama, Georgia, Florida, Texas, Illinois, California, Tennessee, Michigan, Indiana, the District of Columbia, and elsewhere.

   The aggressive tactics of plaintiffs' lawyers have played a significant role in this trend.1 Plaintiffs' class action counsel no longer wait for potential wage and hour plaintiffs to walk through the door or call. Instead, they are turning to sophisticated means to identify and gather "opt-in" plaintiffs. For example, a prominent New York plaintiffs' class action firm has sent letters to hospital employees across the country stating:

   Our investigation has revealed that many hourly employees in the health care industry are not paid for all the hours that they work, especially during meal periods. You may be owed unpaid wages for situations including when you worked during your meal break. We are currently investigating.

   Enclosed with the letter is a "fact sheet" that posed the question: "Is there any urgency to complete the consent form?" The response: "Yes... any delay in returning the Consent Form can cost you back wages."

   The internet has also helped plaintiffs' attorneys to more efficiently and expeditiously amass information regarding an employer's practices, and reach employees across the country, in some cases using names and addresses gathered from unions and other publicly available sources such as state nurses registries. Plaintiffs' attorneys also have set up websites to provide information to employees about current class and collective actions against healthcare employers. One plaintiffs' firm has a website entitled www.hospitalovertime.com , which states "if you worked as an hourly employee for a Health Care facility or Hospital our investigations suggest you may not have been paid for all the time you were permitted to work" and urges such employees to "take action" and contact the firm.

   Healthcare employers have recently had some significant successes in healthcare wage and hour class and collective actions, obtaining dismissals,2 defeating plaintiffs' motions for conditional certification in an FLSA collective action,3 and obtaining decertification.4

   Nevertheless, because of the sheer size of these cases, the disruption they cause, the large potential damages, the possibility of adverse publicity, and the cost of litigation, many healthcare employers feel compelled to pay significant amounts to settle these lawsuits. The settlements, which are often reported on the internet, serve to foment additional litigation. Moreover, the pleadings filed by plaintiffs' counsel, and typically available online, provide a template for plaintiffs' counsel nationwide. The following are some examples of some recently publicized settlements — some involving well known and highly respected healthcare employers, and each involving significant fees to plaintiffs' counsel:

   An $8.5 million settlement of a class and collective action against a large Boston hospital system by employees claiming the hospital violated the FLSA and Massachusetts law by failing to pay employees for time worked before and after their scheduled shifts, during meal periods automatically deducted from their pay, and for time spent attending required meetings. A $7.75 million settlement of an FLSA collective action against a large hospital in Philadelphia asserting claims for failure to pay employees for time worked during meal periods automatically deducted from their pay. $5.4 million settlement of a class action against a large healthcare plan by support specialists, product specialists, and business application coordinators who worked in an IT capacity and claimed they were...