UNION COUNTY — As the county wraps up the sale of Runnells Specialized Hospital to a private company, 43 employees have filed a class-action lawsuit alleging the county routinely failed to pay overtime during the past three years.
The lawsuit, filed in U.S. District Court in Newark at the end of June, alleges the county violated the Federal Fair Labor Standards Act and state laws by requiring employees to work overtime without compensation.
The 43 employees are asking the court to award back overtime pay for the last three years, damages in the amount the court decides as fair and equitable, along with attorneys’ fees for all employees concerned.
Adding fuel to the fire is the fact that while only 43 employees joined in the class-action suit, as many as 300 additional hospital employees may be due money for unpaid overtime, according to court documents obtained by LocalSource.
The lawsuit, filed just a month after the county decided to sell Runnells, maintains that hospital workers — primarily registered nurses and licensed practical nurses — are owed hundreds of thousands of dollars in overtime pay.
Furthermore, the employees demand in the lawsuit that the county preserve all pertinent documents, payroll related spreadsheets, and digital communications for the trial.
County officials refused to comment on the lawsuit, with Sebastian D’Elia, the county communications director, pointing out that it is the county’s policy not to comment on pending litigation, or any litigation for that matter.
According to court documents filed by David Tykulsker and Associates, the legal firm from Montclair representing the 43 employees, the county knew Runnells employees fell under the Fair Labor Standards Act, which mandates that any employee working in excess of 40 hours receive time-and-a-half pay.
Despite this, the lawsuit says the county continued to break the law by not abiding by the FLSA laws, which clearly state all employees be paid for working overtime.
The lawsuit contends the county broke the FLSA by regularly permitting hospital employees to work overtime hours at least every two weeks without compensating them for this work. With employees’ pay stubs as evidence, the court documents show the county also failed to include shift differential, working as the floor charge nurse, retroactive pay or longevity at the hospital.
“The defendant knew or should have known that shift differential, payment for working as the charge nurse, retroactive pay and longevity were to be included in the regular rate of pay when completing the rate of pay at which premium pay was to be calculated,” the lawsuit notes, adding the county “willfully” failed to include the same in the premium pay of the 43 individuals bringing the lawsuit.
The lawsuit points out the county knew or should have known that hospital employees fall under the FLSA, and should have paid them accordingly.
The county announced in the spring that Runnells, a102-year-old facility that houses 300 long-term care patients as well as 44 beds for adult psychiatric care, would be taken over by Center Management Group of Flushing, N.Y., a private firm.
Center Management is a national health care management company that specializes in long-term care, short-term rehabilitation, sub-acute care, and ventilator care. It also offers independent and assisted living as well as home care.
The sale, expected to save the county and taxpayers $50 million over the next five years, will return the property located in Berkeley Heights to the tax rolls. This is expected to generate approximately half a million dollars in property taxes to both Berkeley Heights and the county, according to the county.
Runnells, among the largest New Jersey nursing homes, currently is 86-percent occupied with 244 residents, according to Caring.com, a website which reports on Medicare data for those seeking information and support as they care for aging parents, spouses, and other loved ones.
Before the county signs the final papers, Center Management must apply for two state licenses, which are required in order to operate a long-term care facility and psychiatric hospital.
The management company agreed to certain mandates as part of the sale, including a 99-year deed restriction requiring the hospital to remain a healthcare facility for long-term care patients and that a certain number of beds remain available for county residents and indigent patients.
Last year alone, the county had to subsidize Runnells by $13.5 million, but that was only the tip of the iceberg. During the last two years, the county subsidized the long-term care facility with $30 million just to keep it afloat, as was previously reported.
Part of the problem the county had with Runnels had to do with declining Medicare and Medicaid reimbursements due to reductions in state and federal aid.
However, the process of selling the hospital did not come without controversy. Both employees and residents expressed concern about the type of care patients would receive at the hands of a private management group, but the county moved ahead with the sale.
In July 2013 the county moved to privatize the housekeeping and dietary services at the hospital by contracting with Sodexo, a leading provider of integrated food and facilities management services.
The company has 413,000 employees in 80 countries, serving 10 million customers in 8,000 locations.
This move has saved Union County around $2 million a year.