Class action suits are always a public relations nightmare, expensive and difficult to defend. According to a recent seminar held in Phoenix and sponsored by the law firm of Littler Mendelson, a labor and employment law firm with offices throughout the United States, a new wave of class action suits targeting health care employers and their payment methods are on the rise. Indeed, the Department of Labor (DOL), which investigates wage and hour complaints, is expected to add 250 new investigators in 2009. Hilda Solis, the new Secretary of Labor, said in a June 2009 speech given to the American Society of Safety Engineers, “Make no mistake, the DOL is back in the enforcement business.”
Health care is a recent target not only by the DOL, but also by plaintiff firms that advertise and solicit health care workers from publicly held databases of health care licenses. According to Jennifer Mora of Littler Mendelson in Phoenix, Arizona, plaintiffs firms no longer wait for employees to walk through their door. Instead, these highly aggressive firms now contact employees directly. (See http://www.hospitalovertime.com/) Some firms send letters to employees offering to protect their rights. The standard, “You may be owed wages” and “Are you being paid overtime?” queries found on plaintiff lawyers’ websites can be a goldmine for plaintiff firms and can expose employers to potential class action suits. As part of their “modus operandi,” plaintiff law firms typically publish press releases to highlight the issue. They also file boilerplate lawsuits in state and federal court against targeted employers alleging wage and hour violations. When actions are filed in both state and federal court, employers are forced to “fight on two fronts,” according to Mora.
Class actions over wage issues are not new. In 2001, Perdue Farms owed more than $10 million to its employees for failing to compensate them for the time it took chicken processors to put on, clean and take off sanitary equipment. In 2002, Radio Shack paid its employees $30 million to settle overtime claims. In 2006, IBM paid workers $65 million in back wages for failing to pay its computer installation and maintenance workers overtime. Now, it appears health care may be a new target.
Mora has some tips to help employers avoid litigation. Simply because an employee has an advanced degree does not necessarily mean that the employee is exempt from overtime. Rather, according to Mora, “Employers must carefully review an employee’s actual job duties and their method of compensation to determine whether the employee is exempt from overtime. The fact that an employee is called a manager and is paid a salary does not mean they are exempt.”
In addition, one targeted area for enforcement may be lunch breaks, where employees may be denied uninterrupted time to eat lunch due to patient demand. Mora recommends prohibiting employees from eating lunch at their workstations and ensuring meal periods are not automatically deducted from payroll. She also recommends employers prohibit workers from reporting to their workstations early to avoid potential “off-the-clock” claims. Employers should also ensure employees are properly clocking in and out to prevent unauthorized overtime claims.