Quick Hits

• A jury awarded two classes of employees nearly $100 million in compensatory damages related to claims that a hospital system employer underpaid the employees by rounding time clocks and failing to provide required second meal periods.
• The damages could be doubled, as a judge had already granted the plaintiffs partial summary judgment on the claims and determined the violations to be willful.

The jury in King County Superior Court found that Providence Health & Services must pay $98.3 million in compensatory damages to the two classes of employees, encompassing more than 33,000 employees across Washington State, according to a recent media report. The damages amount could be doubled, as a judge had already determined the violations to be willful.

Background

The lawsuit involved two classes of employees. One class alleged that the hospital system’s process of rounding time clocks to the nearest fifteen-minute increment had resulted in employees being systematically underpaid in violation of state law. The second class alleged that the hospital system had failed to provide caregivers a second, uninterrupted meal period when they worked more than ten hours in a shift, as may be required under Washington law.

Providence argued that the rounding system, which it has since discontinued, was neutral because it only rounded employees’ clock-in time up to the designated start of their shifts, and regardless, the employees had agreed to the rounding practice in their collective bargaining agreement (CBA). The hospital system further argued that it expected its caregivers to take meal periods and that caregivers either waived their second meal periods or were provided paid, on-duty meal periods (for caregivers who had to or chose to remain on duty).

However, in January 2024, King County Superior Court Judge Averil Rothrock granted the plaintiffs’ motion for partial summary judgment on both the rounding and second meal period claims, finding the “undisputed evidence support[ed] a finding of willfulness” against Providence. That ruling left only a jury determination on the issue of the amount of damages.

Time Clock Rounding

In granting partial summary judgment, Judge Rothrock found that the practice of rounding to the nearest fifteen minute increment favored Providence and was not neutral. The judge stated that the Washington Department of Labor and Industries requires that such a “rounding system must, over a period time, compensate for all time actually worked.”

The judge sided with the plaintiffs after determining that the rounding “systematically favor[ed]” Providence because over time the employees lost time more often due to the policy than they gained time. Notably, the judge pointed to evidence suggesting that the rounding had caused a net loss in earnings of only $262.36 per class member over the nearly five-year class period, September 30, 2018, to May 20, 2023.

Second Meal Period Waivers

On the second meal period claim, the judge found in his partial summary judgment ruling that evidence suggested that second meal periods were not being taken and that Providence had not met its burden to show that a violation had not occurred. The judge stated that it was not clear that employees actually took on-duty second meal periods and that Washington law requires employers to do more than merely provide opportunities for meal periods—they must “ensure” employees have second meal periods when required.

Providence had pointed to evidence suggesting that some employees had waived their right to a second meal period—some so that they did not have to extend their shifts by thirty minutes. The judge stated that the evidence was insufficient and had failed to create an issue of fact as to whether there had been a violation or true waivers. Instead, the judge’s ruling focused on the lack of a record of specific waivers (aside from written waivers for only a small fraction of the class), stating that “undisputed evidence shows wholesale failure of caregivers to punch out and take second meal breaks according to Providence’s policy.”

The judge further rejected the argument that some of the caregivers in the class had agreed to waive their right to second meal periods pursuant to the CBA. The judge said, despite arguments from Providence, that the Washington Supreme Court had not vacated a holding that the meal period right could not be waived in a CBA. Regardless, the judge said it was not clear that the CBA at issue had acknowledged the right to second meal periods and waived it.

Next Steps

The jury damages award is significant and perhaps may serve as a warning for employers regarding how repeated, mere technical violations of wage and hour requirements, can add up to create substantial liability. Employers may want to evaluate their current time clock rounding policies to ensure they are net positive for employees and reevaluate any meal period waivers.