Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Although the U.S. District Court for the Northern District of Illinois conditionally certified a class of Utilization Review Case Managers who claimed they were misclassified as exempt employees, the court in Babych v. Psychiatric Solutions, Inc. et al. limited the class to employees at a single facility in Streamwood, Illinois where the two named plaintiffs worked. The ruling was particularly significant, as later court filings indicated that there are only four additional potential plaintiffs.
At the time the lawsuit was filed, Psychiatric Solutions, Inc. owned 95 inpatient behavioral healthcare facilities throughout the U.S., Puerto Rico, and the U.S. Virgin Islands. The plaintiffs sought nationwide certification of a class of “all current and former employees of Psychiatric Solutions, Inc. during the statutory period who were Utilization Review Case Managers, Utilization Review Case Specialists, or who held a similarly titled position and job duties,” on the theory that the misclassification of these positions was company-wide. The court refused to grant such a broad request, finding that none of the evidence plaintiffs submitted “demonstrated that employees with similar job titles worked more than 40 hours per week at other facilities or were classified as exempt under the FLSA. Nor has Babych cited testimony of [the employer’s] managers or directors that would indicate that every PSI facility had a common policy of misclassification.”
Although the court’s adherence to a lenient standard for conditional certification may continue to incentivize plaintiffs’ attorneys to pursue FLSA collective actions against large healthcare systems, this decision is a reflection of the willingness of some courts to recognize that, in the absence of specific evidence to the contrary, employees of large employers with multiple facilities cannot be assumed to be similarly situated. The decision is also a useful reminder of the importance for defense counsel of focusing the court’s attention on the differences in policies and practices in multi-facility institutions, as well as the differences between the named plaintiffs and others in a proposed class.
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