The case also underscores the principle that an employer’s actual practices, rather than its written policies, are critical in determining FLSA compliance.
Unpaid overtime lawsuits against hospitals and other medical providers based on automatic meal deduction policies are becoming increasingly common. A federal court in Arkansas recently issued two key rulings in a case, Burris v. Baxter County Regional Hospital, that centers on allegations that the hospital’s automatic meal deduction policy effectively denied hourly employees proper compensation for interrupted meal breaks. The court’s ruling denied the hospital’s motion to decertify the collective action as well as its motion for summary judgment (MSJ).
Angel Burris, the lead plaintiff, filed the lawsuit on behalf of herself and other non-exempt patient care providers employed by Baxter County Regional Hospital. The hospital automatically deducted 30 minutes from employees’ timecards for meal breaks, regardless of whether the employees were actually able to take an uninterrupted break. Although the policy allowed employees to cancel the deduction if their break was interrupted, Burris alleged that the hospital systematically discouraged employees from doing so.
The court had previously conditionally certified a collective action, which included over 100 hourly employees. Baxter argued that the collective action should be decertified because the plaintiffs worked in different departments with varying duties and supervisors, making their claims too dissimilar for collective treatment. The hospital also asserted that determining whether each plaintiff had worked uncompensated overtime would require highly individualized inquiries, rendering collective adjudication impractical.
In rejecting Baxter’s arguments, the court emphasized that the plaintiffs shared a common claim: they were discouraged from canceling automatic meal deductions even when their breaks were interrupted. Six deposed plaintiffs’ testimonies revealed that they experienced similar pressures from supervisors across different departments. The court found this evidence sufficient to demonstrate that the plaintiffs were similarly situated with respect to the alleged unlawful policy. It also rejected Baxter’s reliance on its written policy, noting that a written policy cannot shield an employer from liability if its actual practices undermine the policy’s stated intent.
The court addressed Baxter’s claim that individual differences among the plaintiffs would make collective action unfair or unmanageable. While acknowledging that some variations existed, the court concluded that these differences primarily pertained to damages rather than liability. Importantly, the court noted that representative testimony and bifurcation of liability and damages were sufficient to address these variations without undermining the collective nature of the action. Decertifying the collective action, the court reasoned, would result in over 100 individual trials, leading to inefficiency and potential injustice for the employees.
In addition to the motion to decertify, Baxter also sought summary judgment against Burris and certain opt-in plaintiffs. The hospital argued that Burris had failed to provide sufficient evidence that she performed overtime work without compensation. Baxter further contended that it lacked knowledge of any uncompensated work and that Burris’s failure to follow its procedures for canceling meal deductions absolved it of liability.
The court found these arguments unpersuasive. Burris and other plaintiffs testified that they frequently worked through meal breaks without compensation and that they were discouraged from canceling the automatic deductions. This testimony, the court held, could lead a reasonable jury to conclude that Baxter had constructive knowledge of the uncompensated work. The court also rejected Baxter’s reliance on the de minimis doctrine, which it deemed unsupported by evidence. Importantly, the court underscored that FLSA plaintiffs are not required to prove damages with exact precision, particularly when the employer’s recordkeeping is deficient.
Burris’s testimony also highlighted a broader issue: the hospital’s supervisors reportedly told employees that taking an unpaid meal break was required by law, even when employees were unable to do so without interruption. This misrepresentation and alleged verbal discouragement of canceling meal deductions supported Burris’s claim that the hospital’s practices violated the FLSA. The court concluded that these allegations raised genuine issues of material fact, making summary judgment inappropriate.
This decision has substantial implications for employers and employees alike. The exposure that healthcare providers face for these types of lawsuits is significant – in April 2024, a jury in Seattle awarded $98 million dollars to a class of 33,000 hourly employees of Providence Health & Services for alleged unlawful time rounding and meal period violations. The judgment entered by the Court in that case ultimately totaled more than $229 million. There have been dozens of lawsuits filed against hospitals and other employers in the healthcare industry since 2023 for alleged unlawful time rounding and meal period violations, and the author anticipates that this trend will continue going forward.
The case also underscores the principle that an employer’s actual practices, rather than its written policies, are critical in determining FLSA compliance. Employers cannot rely on written policies as a defense if their workplace practices effectively discourage employees from reporting all hours worked. The case also illustrates the courts’ willingness to allow collective actions to proceed when plaintiffs share a common unlawful policy, even if there are some differences in their job titles and/or duties.
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