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FLSA Claims Against Six Philadelphia-Area Hospital Systems Dismissed with Prejudice

Monday, August 13, 2012

On August 8, 2012, Judge Cynthia M. Rufe of the Eastern District of Pennsylvania dismissed with prejudice wage loss claims against six Philadelphia-area hospital systems. Pepper Hamilton LLP represents Albert Einstein Healthcare Network and Abington Health in these actions. The six cases1 – all of which had been filed in November 2009 by Thomas & Solomon LLP, a plaintiffs’ firm that has filed dozens of nearly identical cases around the country purportedly on behalf of employees – alleged that the hospital systems had failed to appropriately compensate their employees for all hours worked, in violation of the Fair Labor Standards Act (FLSA), which requires employers to pay minimum wage and time-and-a-half for overtime, along with various state laws. The plaintiffs had also asserted ERISA and RICO claims in previous iterations of the complaints. The court dismissed these claims in earlier proceedings, and they were not asserted in the Third Amended Complaints.

The named plaintiffs in each of the six actions took aim at electronic time keeping systems that automatically deduct an employee’s meal break. The named plaintiffs, who purported to represent classes of thousands of employees working in dozens of different positions, alleged that they routinely worked through their meal breaks and were not compensated for that time. They also alleged that they were not compensated for tasks performed before and after their normally scheduled shifts and for time spent in training programs. The plaintiffs sought compensation under § 207(a) of the FLSA, which requires “employers to compensate employees for hours in excess of 40 per week at a rate of 1 ½ times the employees’ regular wages.” They also sought compensation for gap time – i.e., uncompensated hours below the 40-hour threshold of § 207(a).

The court dismissed the plaintiffs’ claims in their entirety, with prejudice. First, the court held that gap time claims are not cognizable under the FLSA: “The FLSA does not create liability for unpaid non-overtime compensation for an employee who was paid at least the minimum wage.” (citation omitted). The plaintiffs did not allege a failure to pay at least minimum wage. Second, the court determined that the plaintiffs could not maintain their claims for overtime compensation because they had not sufficiently alleged that they worked overtime (i.e., in excess of 40 hours in a week) and were not compensated. As pled, the court criticized the plaintiffs’ descriptions of their work schedules, which relied on vague assertions that they “frequently” or “occasionally” worked various hours, and concluded that “Plaintiffs have failed to allege a single specific instance in which a named Plaintiff worked overtime and was not compensated for this time.” The court also made it clear that verbosity is not a substitute for material allegations:

While the Third Amended Complaint contains 488 paragraphs, only 24 of those paragraphs allege facts specific to Plaintiffs in the case. Most of the remaining 464 paragraphs contain either irrelevant verbiage ... immaterial background information ... or legal assertions regarding potential theories of liability.

In dismissing these six FLSA actions, the Eastern District of Pennsylvania joined several other courts that have rejected this pleading style and dismissed cases brought by Thomas & Solomon and other firms. These courts have made clear that a plaintiff who asserts an FLSA claim must allege, with some reasonable particularity, that he/she worked more than 40 hours in a week and was not compensated. Generalizations will not suffice.

Although Judge Rufe did not foreclose the possibility that an automatic meal break deduction policy could be applied in a manner that violated the FLSA, she flatly rejected the plaintiffs’ argument that such automatic deduction policies are per se violations of the FLSA. These decisions will require future plaintiffs alleging claims for unpaid overtime to provide sufficiently detailed allegations regarding the overtime hours they claim to have worked but for which they were not paid.

Having dismissed the FLSA claims with prejudice, Judge Rufe declined to exercise jurisdiction over the state law claims.

Endnotes

1 Davis v. Abington Mem’l Hosp., No. 09-5520; Frattarola v. Mercy Health Sys. of Southeastern Pa., No. 09-5533; Lynn v. Aria Health Sys., Inc., No. 09-5548; Lynn v. Jefferson Health System, No. 09-5549; Ruff v. Albert Einstein Healthcare Network, 09-5550; Duncheskie v. Temple Univ. Health Sys., No. 09-5551.

Jan P. Levine, Christopher J. Moran, Robin P. Sumner, Sean P. McDevitt and Sara B. Richman

Written by

Jan P. Levine
Phone: 215.981.4714
Fax: 215.981.4750
levinej@pepperlaw.com

Christopher J. Moran
Phone: 215.981.4169
Fax: 215.981.4750
moranc@pepperlaw.com

Robin P. Sumner
Phone: 215.981.4652
Fax: 215.981.4750
sumnerr@pepperlaw.com

Sean P. McDevitt
Phone: 610.640.7856
302.777.6519

Fax: 610.640.7835
302.421.8390

mcdevitts@pepperlaw.com

Sara B. Richman
Phone: 215.981.4658
Fax: 215.981.4750
richmans@pepperlaw.com


The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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