Massachusetts Federal Court Approves $2.2 Million Settlement in Overtime Case

Massachusetts federal District Court Judge Dennis Saylor recently granted final approval of a $2.2 million settlement in a lawsuit brought by Patricia Cavallaro on behalf of a class of approximately 5,000 current and former employees who alleged that UMMMC failed to properly compensate certain non-exempt employees for overtime hours worked during their lunch breaks and after their shifts in violation of the federal Fair Labor Standards Act. The lawsuit also asserted claims for wages under Massachusetts state law, for breach of fiduciary duty under the Employee Retirement Income Security Act, and for racketeering under the Racketeer Influenced and Corrupt Organizations Act.

The settlement was filed with the court in May 2013 after the parties engaged in extensive fact-finding and participated in mediation. The $2.2 million figure is reportedly the product of a payroll data analysis in which potential damages were estimated based on actual hours and compensation data provided by UMMMC. As part of the approval process, and for settlement purposes only, the court certified two classes of certain current and former clinical employees – an opt-out class under Federal Rule of Civil Procedure 23 and an opt-in collective action under the FLSA. Roughly 200 of the 5,000 class members elected to join the FLSA collective action as part of the settlement process and will receive a minimum settlement payment of $100. Those class members who did not opt into the FLSA collective action will receive a minimum settlement payment of $25. Class counsel, led by New York-based law firm Thomas & Solomon LLP, will receive attorneys’ fees of $733,260, an amount equal to one-third of the total settlement, plus $93,644.52 for reimbursement of litigation expenses.

The action – entitled Cavallaro v. UMass Memorial Medical Center, Inc., No. 4:09-cv-40152-FDS (D. Mass.) – is one of many overtime lawsuits that have been filed against hospitals all over the country over the past few years, and appears to be the first settled in Massachusetts since the First Circuit reversed the dismissal of similar claims against Boston Medical Center Corporation last August.Given the size of recent settlements that have been approved in similar matters, the trend is not likely to dissipate any time soon:

Just last week, a federal judge in Wisconsin finally approved a $3.5 million settlement in an FLSA action filed against a Madison hospital on behalf of 1,416 registered nurses who claimed that they were not properly compensated for on-duty meal periods. See Order Granting Final Approval of Settlement, Fosbinder-Bittorf v. SSM Health Care of Wis., Inc., No. 3:11-cv-00592 (W.D. Wis. filed Oct. 23, 2013).

In August, a federal judge in Illinois preliminarily approved a $900,000 settlement in an FLSA action brought against an independent home care provider operating in Illinois and Missouri on behalf of 754 licensed practical nurses who claimed that they were not properly compensated for overtime hours worked during breaks. See Order Granting Preliminary Approval of Settlement, Beck v. VNA Homecare, Inc., No. 3:12-cv-00330 (S.D. Ill. filed Aug. 13, 2013).

In July, a federal judge in Pennsylvania granted final approval of a $2.2 million settlement in an FLSA action brought against a Pennsylvania health system on behalf of 9,000 hourly employees who claimed that they were not properly compensated for hours worked during meal breaks, before and after their shifts, and during training sessions. See Order Granting Final Approval of Settlement, Frattarola v. Mercy Health Sys. Of Se. Pa., No. 2:09-cv-05533 (E.D. Pa. filed July 17, 2013).

In June, a federal judge in Illinois preliminarily approved a $1.925 million settlement in an FLSA action against an Illinois hospital on behalf of a class of nurses who claimed that they were not properly compensated for work during meal periods and after shifts. See Order Granting Preliminary Approval of Settlement, Demarco v. Nw. Mem’l Hosp., No. 1:10-cv-00397 (N.D. Ill. filed June 17, 2013).

All businesses are vulnerable to large-scale wage and hour litigation, particularly in Massachusetts, where state law provides for treble damages and attorneys’ fees. Accordingly, no matter the size or nature of your business, we recommend that employers conduct periodic wage/hour audits to make sure that they are in compliance with all state and federal wage and hour laws.