Another Employer's Auto-Deduct Policy Is Upheld

Posted by Molly DiBiancaOn February 19, 2013In: Fair Labor Standards Act (FLSA), Wages and Benefits

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In Creely v. HCR ManorCare, Inc., a class of 318 nurses, LPNs, CNAs, an admission coordinators alleged that they had not been paid for time worked during meal breaks. The employer was a nationwide provider of short- and long-term medical and rehabilitation care with more than 300 facilities. Each facility had its own management team and HR personnel but its policies were developed at company headquarters and implemented at all facilities.

The employer's meal-break policy required that hourly employees take a daily 30-minute meal break. The employer's timekeeping system automatically deducted 30 minutes from the time worked a shift longer than 5 or 6 hours.

Employees did not clock in or out for their breaks. An employee who missed a break was required to fill out a "missed-punch" form and submit it to a manager, who would sign it and turn it into the Payroll Department. Payroll personnel would then adjust the timecard to reverse the automatically deducted 30 minutes.

Unlike the plaintiffs in White v. Memorial Baptist Hospital, the plaintiff-employees here did not argue that the policy was per se illegal. They also did not argue that the employer had an unofficial "policy to violate" its lawful policy. Instead, they argued that they were denied overtime pay due to the employer's implementation of the auto-deduct policy. Specifically, they claimed that they had not been paid for breaks that they'd not taken because:

1. Defendant illegally shifted the burden of monitoring time worked to the employees by requiring them to cancel the automatically deducted time;
2. Defendant took no affirmative measures to monitor whether the employees actually received their meal breaks;
3. Defendant failed to train or inform employees or management what to do if a meal break was missed or interrupted; and
4. The employees didn't report missed breaks because they were discouraged from doing so.

It was these arguments that led the court to decertify the class, finding that the plaintiffs were not similarly situated for the purposes of the FLSA. The court found that the application of the lawful auto-deduct policy varied between managers and facilities. For example, some managers provided follow-up training to the plaintiffs on the missed-punch forms, while other managers were accused of actively discouraging the plaintiffs from submitting the forms. In other words, the Plaintiffs' knowledge of and training on the policy, and the application of the policy itself, varied in large part depending on the individual managers at the employer's facilities.

This case is yet another in a growing line of auto-deduct cases that fail at the final certification stage.
Creely v. HCR ManorCare, Inc., No. 09-2879 (N.D. Ohio Jan. 31 2013).

See also
The Legality of Automatically Deducting Meal Breaks
E.D. Pa. Dismisses Nurses' Claims for Missed Meal Breaks

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