Temp Nurses Win Class Status in Stipend, Overtime Case (1)

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By Porter Wells

Fastaff LLC must defend claims that the staffing company improperly excluded housing stipends from its overtime wage calculations against a freshly certified class of workers.

California has recently been a hotbed of wage-and-hour activity. The California Supreme Court ruled in March that businesses in the state should be calculating overtime compensation for employees with the formula set out by the state’s labor commission manual rather than the less-generous federal calculation.

Fastaff assigns nurses and technicians to temporary job assignments for up to 13 weeks and provides a housing stipend or housing arrangements during an employee’s assignment. The company doesn’t include the value of the stipend or housing in the determination of an employee’s overtime pay.

Employee Stephanie Dalchau says Fastaff’s calculations shortchanged her overtime wages, violating the Fair Labor Standards Act and California state law. The miscalculation was companywide, affecting many other potential plaintiffs, she claimed.

Fastaff, in fighting the class certification petition, tried to restrict the potential size of the class by separating the subset of employees who receive housing stipends from the subset of employees who live in company-provided housing. Only the first group sustained an actionable injury when they didn’t meet their minimum hours—a prorated reduction in their stipend—whereas the second group was able to remain in the provided housing, the company said.

But the class’ claimed injury isn’t just the ultimate dollar reduction in the housing stipend, Judge William Orrick of the U.S. District Court for the Northern District of California said April 9.

The precise harm is “the exclusion of the value of the housing benefit from the regular rate, resulting in overtime underpayment,” he said in granting the class certification. “This is an injury shared by all prospective class members, no matter which housing benefit option they selected.”

Motion to Stay Proceedings Denied

The company is also litigating a separate case in state court that alleges it denied rest periods and issued inaccurate wage statements. The parties are negotiating a settlement, a fact used by Fastaff in an effort to get the federal court to hit pause on Dalchau’s case.

Fastaff’s motion to stay the proceedings in the U.S. District Court for the Northern District of California was denied in the same order in which Orrick granted Dalchau class certification.

The company didn’t prove any real hardship, and Orrick expressed suspicion that the staffing firm was attempting to escape liability in one case or the other by asking to halt proceedings.

Matthew Hayes, Dalchau’s attorney, told Bloomberg Law in an April 10 email that Fastaff’s conduct in attempting to stay the federal case and settle the state case “speaks for itself.” He said he is otherwise pleased with Orrick’s decision.

Attorneys for Fastaff didn’t immediately respond to Bloomberg Law’s request for comment.

Hayes Pawlenko LLP in Pasadena, Calif., represents Dalchau and the newly certified class. Morgan, Lewis & Bockius LLP in Los Angeles represents Fastaff and its parent company, U.S. Nursing Co.

The case is Dalchau v. Fastaff, LLC, 2018 BL 124926, N.D. Cal., No. 17-cv-01584-WHO, opinion issued 4/9/18.

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