I have blogged numerous times about these automatic lunch deduction cases and have suggested remedies.  Yet, these cases proliferate.  Another very recent example is that of a hospital that has agreed to pay more than $4,000,000 to settle a FLSA collective action where the workers allege that their employer violated the Fair Labor Standards Act by automatically deducting a thirty-minute lunch break, every day, whether or not the employees allegedly worked through lunch.  The case is entitled Small et al. v. University Medical Center of Southern Nevada and was filed in federal court in the District of Nevada.

The workers were a class of respiratory therapists; there were 600 workers in the settlement.  Interestingly, the plaintiffs’ attorneys received more than $1.2 million in attorney fees.  The class members will receive, on average, approximately $3,500 each.  Settlement was appropriate, as pointed out in the parties’ joint motion for approval of the settlement.  The brief stated that “this case was particularly risky as it involved a large class that defendants allege plaintiffs would have trouble to sustain because of alleged distinctions between each individual plaintiff’s job function and departmental management structure.”

The USDOL had investigated the hospital and had concluded that the hospital automatically deducted one half-hour every day for lunch whether the workers in fact took the lunch.  Significantly, the employer was cognizant of its errant automatic deduction policy but nevertheless continued to enforce it.  The class was certified, notwithstanding that the employer argued that too much individual scrutiny was required to determine who was owed money.

The hospital defended by asserting that workers could override the automatic deductions by entering a cancellation code into the computer system that kept track of employee work hours. The hospital also defended by claiming that it did not know this was happening because employees never complained to HR or used the override system.

The Takeaway

The employer here was on the right track (so to speak) because it had an override policy in place but the employees either did not know about it or did not know how to utilize it.  That was the employer’s failing here.  It is permissible to use such an automatic deduction policy, but there must be put in place a fail-safe system, some kind of reporting mechanism that employees have full knowledge of and use to report a supposedly missed lunch.

That is the employer’s ultimate protection…