CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
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New York, NY 10175
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March 16, 2010

Fair labor standards act collective action litigations

On November 13, 2008, three separate collective/class action lawsuits were filed in the Northern District of New York, as a collective action under the FLSA, as a class action for violations of the New York State Labor Law (“Labor Law”) for failure to pay wages and overtime, and under the Employee Retirement Income Security Act of 1974 (“ERISA”) for failure to keep accurate records and for fiduciary breaches.  The three lawsuits, Fengler, et al. v. Crouse Health Foundation, Inc., et al., 08-CV-1221, Hamelin, et al. v. Faxton-St. Luke’s Healthcare, et al., 08-CV-1219, and Colozzi et al. v. St. Joseph’s Hospital Health, et al., 08-CV-1220, (“Upstate FLSA Class Actions”) were all filed by Dolin, Thomas Law Firm (now known as Thomas & Solomon LLP) based in Rochester, New York.

Thomas & Solomon LLP has filed similar actions in Pittsburgh, Philadelphia and Massachusetts.  Recent communications with healthcare employers demonstrate that Thomas & Solomon LLP is seeking to bring class actions against metropolitan New York area hospitals.  In fact, Thomas & Sullivan LLP has begun actively soliciting New York metropolitan hospital employees to join similar lawsuits, and lists a number of New York metropolitan hospitals that they are “currently investigating” on their web page http://www.hospitalovertime.com/locations/New+York.

Facts of the Upstate FLSA Class Actions

Each of the complaints in the above actions (“the Complaint”) alleges that the hourly employees of the defendant hospitals (“Defendants”) were denied compensation, including overtime, by operation of the Defendants’ break deduction policy which automatically deducts time from employees’ paychecks for a meal break (the “Meal Break Deduction Policy”).  The Complaint alleges that the employees automatically lost one-half hour of compensable time because of the Meal Break Deduction Policy, even when the employees were performing compensable work for the Defendants. 

Each Defendant has a policy where hourly employees who work at least a six-hour shift are entitled to a thirty-minute unpaid meal break, which supervisors and managers are to ensure is available to employees each day.  Each of the Defendants utilizes a computerized time-keeping and payroll system known as Kronos.  The Kronos program automatically deducts thirty minutes from an employee’s paycheck, obviating the need for clocking in and out during the break.  The employees were required to contact their supervisor when they are unable to take a full meal break for work-related reasons, and their supervisor was to manually effectuate cancellation of the meal period deduction directly into the Kronos system.

Preliminary Class Certification Granted

On January 26, 2009, the Court granted preliminary certification in the Upstate FLSA Class Actions as to “[a]ll present and former hourly employees of the [St. Joseph’s Hospital Health Center, Crouse Hospital, Faxton-St. Luke’s Healthcare and St. Luke’s Home], including but not limited to registered nurses, licensed practical nurses, nurse practitioners, and certified nurses’ assistants, with direct patient care responsibilities who have been subject to automatic meal break deductions through use of the Kronos system, and who have or may have worked through or during unpaid meal breaks without compensation at any time during the past three years.”  While some of the Defendants have apparently settled, the remaining parties in all three actions are currently engaged in discovery. 

Recommendations

In light of these actions, it is recommended that employers review their time-keeping procedures and systems.  While employers in all industries are potential targets for FLSA actions, hospitals should be particularly vigilant as Thomas & Solomon LLP is actively soliciting hospital employees to join in class actions against their employers.  If you utilize Kronos or a similar computerized time-keeping and payroll system and have questions regarding your potential liability, please be sure to consult with counsel as soon as possible.  We remain available to review your time-keeping procedures and meal break policies to help ensure compliance with the law.

If you have any questions, please feel free to contact us.