In a significant victory for Massachusetts healthcare employers, on December 20, 2010, the Massachusetts federal court applied the state overtime exemption available to hospitals, nursing homes, and certain other healthcare employers, and dismissed all 13 state wage-law claims in Cavallaro v.UMass Memorial Health Care. Plaintiffs in the case, a class action filed on behalf of 13,000 current and former employees of UMass Healthcare and its subsidiaries, claimed the hospital did not compensate them for time worked: (1) during meal breaks that were automatically deducted from wages; (2) before and after scheduled shifts; and (3) time spent in training sessions.

On July 2, the court granted the hospital’s motion to dismiss claims for violation of the Massachusetts Weekly Wage Act, breach of express and implied contract, promissory estoppel, fraud, and negligent misrepresentation on the grounds that these claims were preempted by section 301 of the Labor Management Relations Act (LMRA). The court held that evaluation of these claims would require interpretation of the applicable collective bargaining agreements. The hospital moved for reconsideration, urging the court to dismiss the remaining state common law claims on LMRA preemption grounds. In addition, and perhaps more significantly, the hospital moved to dismiss plaintiffs’ claims under the overtime provision of the Massachusetts Fair Minimum Wage Act on the ground that the statute clearly exempts employees who work “in a hospital, sanitorium, convalescent or nursing home, infirmary, rest home or charitable home for the aged.” The court agreed, and granted both of the hospital’s motions.

This decision, which is the first to interpret the overtime exemption for employees of hospitals and other similar healthcare institutions, is a boon for healthcare employers in Massachusetts because the Massachusetts overtime statute provides for mandatory treble damages for employers who violate the Act. In contrast, the overtime provisions of the federal Fair Labor Standards Act (FLSA), provide for double damages and treble damages may be awarded only if an employer is found to be in willful violation of the FLSA.

This entry was written by Greg Keating, Co-Chair of Littler’s Healthcare Practice Group, and Lee Schreter, Co-Chair of Littler’s Wage and Hour Practice Group, who both represented UMass Memorial Health Care in this case.

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