A Seattle jury determined that Providence had underpaid thousands of its hourly employees by denying second meal breaks during long shifts and rounding down the minutes they clocked in for a shift.
In a verdict reached Thursday, the jury awarded over 33,000 employees represented in the class-action suit about $98 million, according to court documents and reports. About $90 million of the total stemmed from the unpaid and missed meal breaks, with a little over a million deducted due to some class members knowingly agreeing to waive the breaks.
However, the nonprofit system is likely on the hook for substantially more due to state law requiring the total amount to be doubled because King County Superior Court Judge Averil Rothrock determined the violations to be willful. This could bring the total closer to $220 million inclusive of statutory interest, per reports and comments from the plaintiffs’ legal representation.
In an emailed statement, Providence said it disagrees with the plaintiffs’ claims and is “disappointed” with the outcome.
“This case presented several new and complex wage and hour issues that are not addressed in Washington statutes or by the Washington Courts of Appeal,” it said. “Along with other employers also seeking clarity on these Washington wage and hour issues, we intend to appeal this result. As this involves ongoing litigation, we cannot comment further.”
According to a complaint filed by plaintiffs in the case, Washington law requires employers to provide a second 30-minute meal period when they work over 10.5 hours in a shift. While meal periods are “automatically” deducted from pay, Providence did not provide the second meal period shift to those working long shifts.
Providence also implemented a timekeeping system in which hourly employees were paid to the nearest quarter hour. The policy was “not neutral,” however, because it rounded in seven-minute increments that always went in favor of the health system, the plaintiffs wrote.
“As a result of Providence’s uniform policies and practices of rounding employee punch times and failing to provide a second meal period for shifts in excess of 10.5 hours, hourly employees, including Plaintiffs, are systematically denied pay for all compensable hours in violation of Washington law,” according to the complaint.
The court’s ruling pertains to class members affected by the two practices between September 2018 and May 2023. Providence reportedly discontinued the rounding practice last fall.
Renton, Washington-based Providence spans 51 hospitals and has had a few years of major financial losses. Following a -6.4% operating margin from a $1.7 billion operating loss in 2022, the Catholic system reported in March a -4.1% operating margin and a $1.2 billion operating loss for 2023.
The nonprofit system has also felt the brunt of multimillion-dollar restitutions as of late. In February, it cut a deal with Washington state Attorney General Bob Ferguson to settle allegations that it had failed to inform tens of thousands of patients of their charity care eligibility. Key to that arrangement was $157.7 million in medical care payments it agreed to either refund or erase.
Similar scrutiny is ongoing in Oregon, where it operates eight hospitals and more than 200 other locations. In March, the state’s attorney general, Ellen Rosenblum, asked a state judge to require that Providence fully cooperate with its ongoing probe of the organization’s charity care practices. Providence has pushed back, telling the court that it had already produced over 100,000 pages of documents and that the state’s requests were “highly burdensome and unreasonable.”