Federal Court In New York Decertifies FLSA Collective Action Of 1,000 Hospital Workers Challenging Auto-Deduct Policy

by BakerHostetler

Over the past several years, medical providers in particular have been beset by wage and hour claims arising out of so-called “auto-deduct” policies. A recent case, arising out of the Eastern District of New York, a jurisdiction that has generally been friendly to plaintiffs in this arena, suggests that such claims may ultimately fail.

In Desilva v. North Shore-Long Island Jewish Health Sys, Inc., 10-cv-1341 (E.D.N.Y. June 5, 2014), the Eastern District of New York decertified a 1,000+ class of hospital workers asserting FLSA unpaid overtime claims based on their employer’s use of a policy that automatically deducted 30 minutes of time per employee shift for lunch. In doing so, it became the latest in a string of decisions which have held that an employer’s implementation of an automatic deduction policy does not, in and of itself, warrant final certification.

The plaintiffs were LIJ current and former health care employees across the country. LIJ used the popular “Kronos” timekeeping system and a procedure in which managers entered employees’ schedules into the system, and the employees verified their hours worked by swiping their security badge when the entered and left the facility. However, the employees did not swipe in and out for meal periods. Instead, Kronos was programmed to automatically deduct half-hour meal periods for all employees who worked six or more hours in a single day. The employees were paid for their scheduled shift hours minus 30 minutes for the automatic deduction, unless their managers added time worked during the meal period to the employees’ time cards.

The plaintiffs alleged that as a result of LIJ’s auto deduct policy and Kronos system, they often worked through meals and breaks but were not compensated in violation of the FLSA. In March 2012, the court conditionally certified the matter as an FLSA collective action.  After notice was issued, 1,196 plaintiffs opted in to the action. Approximately one year later a new district judge was assigned to the case. The following year, LIJ moved to decertify the class based on what the court described as a “voluminous” evidentiary record.

The court agreed with defendants and decertified the class based on several grounds.  The court noted that during the last few years, numerous courts have found that automatic meal deductions are facially legal and that, without more, such policies “cannot serve as the common bond around which an FLSA collective action may be formed.” Thus, the court found that the plaintiffs were unable to point to a common violation of the law that bound the purported class action. Absent such a unifying illegal policy, the plaintiffs were required to demonstrate that LIJ systematically disregarded its own legal policy and that it was done in such a uniform and pervasive way as to warrant class treatment. The court found that the plaintiffs failed to do so and, to the contrary, the evidence demonstrated a wide range of compensation practices across the various facilities.

Finally, the court also found that if it allowed the matter to proceed as a collective action, it would be left in the untenable position of having to choose between either holding, in effect, 1,196 mini-trials or depriving the defendants of their due process right to present a full defense. The court therefore decertified the collective action.

What jumps out about this case is that the factors which led the court to decertify the class – the reliance on a wage payment policy that was facially legal, the inherent individualized inquiry that would be necessary to show that such a facially legal policy was illegally applied, and a class that could not realistically be taken to trial – should all have been readily apparent at the conditional certification stage. Unfortunately, due to the lenient conditional certification standard, the defendants were forced to engage in nearly two years of class discovery and compile a “voluminous” evidentiary record to dispose of a national collective action that never really had a chance of success. This is why many defense counsel (this one included) are of the opinion that any “efficiencies” of the lenient FLSA conditional certification process are more than offset by the resulting failure to weed out untenable class actions prior to expensive class discovery and decertification.

The Bottom Line: Automatic meal deductions are facially legal under the FLSA and, without more, are not enough for plaintiffs to prevail on a FLSA collective action. Unfortunately, because of the lenient conditional certification standard, it still might take an employer years of litigation to successfully defend against such claims.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:


BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.