In a significant defeat for plaintiffs’ class action firms bringing wage and hour class cases against unionized healthcare institutions, a Massachusetts federal judge dismissed a wage and hour class action against Caritas Christi Health Care System on the grounds that  the claims were preempted by the Labor Management Relations Act (LMRA).  This decision is particularly important as plaintiffs’ class action firms are increasingly filing state law wage and hour class actions, in addition to federal FLSA collective actions, in an effort to take advantage of potentially larger opt-out classes and additional damages.

The plaintiffs in Pruell v. Caritas Christi  filed a putative class action in Massachusetts state court  alleging that hospitals in the Caritas system violated Massachusetts wage law by: 1) automatically deducting a half-hour meal break from wages, even when employees did not take the break; 2) failing to pay employees for work performed before and after their shifts; and 3) failing to pay employees for time spent attending training sessions. In response, Caritas removed the case to federal court and moved to dismiss all of the claims on the ground that they were preempted by the LMRA. The court agreed and dismissed the case.

Discussing the legal framework for preemption, the court cited the United States Supreme Court for the well-established principle that Section 301 of the LMRA preempts state law claims when resolution of the claims depends on the meaning of a collective bargaining agreement (CBA).  More specifically, the court stated that a case is preempted when the resolution of the claims “arguably hinges upon interpretation of a CBA but not if their resolution can be achieved without reference to or merely by consulting the terms of a CBA.”  Applying these principles, the court determined that the resolution of the claims against the hospitals in the Caritas system would require interpretation of multiple provisions of the applicable CBAs regarding the regular rate of pay for computing overtime and damages.  For example, the court pointed out that in order to determine the appropriate “regular rate” for purposes of computing overtime, a trier of fact would be required to interpret  provisions of the CBAs between the hospitals and the Massachusetts Nurses Association defining “regular base rate,” shift differentials, weekend differentials, and similar provisions.  The court would also be required to consider the effect and applicability of any section of the CBA that provides for overtime pay for hours worked in excess of a scheduled shift.  The court applied the same reasoning to the plaintiffs’ common law claims for breach of contract, money had and received, quantum meruit/unjust enrichment, fraud, misrepresentation, estoppel, and conversion, stating they were all “variations on a common theme” --  that plaintiffs were underpaid -- and interpretation of the CBAs would be required to compute the remedy. Thus, the court held that all of the claims in the case were preempted by the LMRA, remand was denied, and the entire case was dismissed. 

In a similar class action against UMass Memorial Healthcare, Inc., a different Massachusetts federal judge recently dismissed claims, on LMRA preemption grounds, for violation of the Massachusetts Weekly Wage Act, breach of contract, breach of implied contract, fraud, negligent misrepresentation, and promissory estoppel.

Both of these cases underscore the importance of  carefully assessing the claims in wage and hour class and collective actions against unionized healthcare employers to determine whether resolution of the claims might depend on the meaning of a CBA, even where the CBA need only be interpreted to determine the amount of the remedy, as many CBAs in the healthcare industry contain various and complicated provisions affecting the “regular rate” from which overtime must be calculated.

This entry was written by Greg Keating, Dennis Brown, and Thomas Bender