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Federal Judge Rules in Favor of Providers in Wages Lawsuit Against Baylor Scott & White Health

The plaintiffs in the case allege that they were not given overtime pay even though they were paid as hourly employees.

HealthTexas Provider Network is liable to pay unpaid overtime compensation to nurse practitioners and physician assistants, according to a federal judgment on the case that has dragged on since 2020.

HTPN is a member of the Baylor Scott & White Health system, but the judge did not rule that the health system was liable because of “genuine disputes of material fact as to the Defendants’ status as joint employers.” The plaintiffs in the lawsuit are a group of advanced practice providers awarded class-action status in 2021. They alleged that between 2017 and 2019, their employer did not pay them for off-the-clock hours in violation of the Fair Labor Standards Act. These providers were hired as salaried employees but were paid hourly. If an employee is paid based on time worked, that person is entitled to overtime pay for time worked over 40 hours per week.

According to John Fabry, who represented the plaintiffs in the case, the APPs were paid the same hourly rate for 2.5 years, no matter how many hours they worked. If the providers worked less than 40 hours a week, their salary was reduced, but if they exceeded 40 hours, they were not given one-and-a-half pay for overtime.

While the judge has ruled that HTPN is liable for the missed payments, there will still be a trial to determine the damages and whether or not BSWH is also considered an employer. The plaintiffs brought the suit against Baylor and HTPN, but the judge did not hold Baylor liable. BSWH argues that HTPN is the entity that made all staffing decisions even though Baylor prepared the offer letters. “A reasonable jury could find that BSWH did not jointly employ Plaintiffs,” the judge wrote.

The defendants do not argue that the plaintiffs were paid hourly but say that they intended to pay them on a salary basis. The intent wasn’t enough for the judge, who wrote, “The subjective intent of Defendants’ executives in implementing the new timekeeping system cannot outweigh the actual pay practices that Defendants’ managers intentionally implemented and perpetuated over a two-year period.”

The problem arose when the defendants asked employees to clock in and out for each shift to pay the APPs beyond their salary if their hours exceeded the shift as assigned. But the system pre-loaded a 40-hour work week for the APPs because they were salaried employees. When the APPs clocked in and out each day, it added hours to the preloaded schedule, duplicating the hours worked for the APPs. To rectify the situation, court documents say that APP managers manually removed the preloaded hours and told APPs they would now be paid for the exact time they worked in the hospital. This meant they would not be paid for breaks like meals off campus and were effectively hourly employees entitled to overtime pay.

“If one worked less than 40 hours in a week, a salaried person would still get their full paycheck,” Fabry says. “Their compensation was reduced below 40 hours to whatever the exact time was. Whatever their time was, that’s what they got paid for, and they never received time and a half for anything over 40 hours in a week.”

Human resources eventually found errors in the manual removal of hours over two years, and the court ruled that the APPs were paid an hourly wage without overtime. “Having considered the hundreds of deductions over a two-year period conducted by an entire team of managers from the paychecks of over 40 employees, the Court determines that Defendants did not pay Plaintiffs on a salary basis from April 2017 to October 2019,” the judge wrote.

When asked about the ruling, Baylor Scott and White Health provided the following statement. “As this is pending litigation, we’re not able to provide comment.”

A date for the trial to determine the total damages and liability of Baylor Scott & White Health has not been set.


Will Maddox

Will Maddox

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Will is the senior writer for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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