A healthcare network in upstate New York has settled a class-action lawsuit that alleged hospitals conspired to depress wages of registered nurses.
The settlement agreement was reached between bedside nurses and Northeast Health, a healthcare system which includes Albany Memorial Hospital, Samaritan Hospital in Troy, N.Y., and Sunnyview Rehabilitation Hospital in Schenectady, N.Y.
The class action suit was filed in June 2006 against several hospitals in the Albany market. Northeast Health was the first to settle.
The lawsuit contends that Albany area hospitals had for many years violated federal antitrust law by sharing confidential wage data and conspiring to depress wages for registered nurses. The class consists of direct-care nurses who were employed by the hospitals between June 20, 2002 and June 20, 2006.
The $1,250,872 settlement, which is subject to court approval, includes provisions to halt anti-competitive behavior by Northeast Health in the future. These provisions prohibit Northeast Health from sharing current and future nurse wage information with other healthcare facilities in the Albany area, and give plaintiffs access to Northeast Health witnesses in order to further prosecute the action against other area defendants.
The class-action suit has been duplicated in Detroit, Chicago, Memphis, and San Antonio.
Northeast Health officials issued a statement calling the charges “completely false and offensive.”
“We never conspired with any other hospital to suppress nurse wages, nor did we ever violate the antitrust laws in any manner,” the statement asserted. “On one hand we at Northeast Health had a strong inclination to defend this case to the end, because we know the allegations were false, and we know we would ultimately prevail. However, after three years of expensive litigation with no end in sight we decided that it was in the interest of our patients, our staff, the public, and our organization to bring this matter to a close.”
Nursing union representatives hailed the settlement as an “important step” towards ensuring fair compensation for their profession and helping to solve the nurse shortage crisis.
"For too long, hospitals cut corners when it came to valuing the hard work of nurses,” said Cathy Glasson, RN, of the Nurse Alliance of SEIU.
Glasson said the SEIU Nurse Alliance has supported research exposing the national problem of employer collusion around nurse wages and shown the link between wage levels and the shortage of bedside nurses.
"By helping to ensure competitive methods for setting RN wages, we can attract more new nurses to the profession, bring non-practicing nurses back to the bedside, and improve patient outcomes," said Anne Jacobs-Moultrie, a registered nurse and vice president of 1199SEIU United Healthcare Workers East.
The class action suit ultimately seeks to recover three times the amount that nurses in the class were underpaid.
Northeast Health recently announced an intended merger with two other area healthcare companies, St. Peter's Health Care Services and Seton Health, but this will not effect the settlement.