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Schneider v. Union Hospital, Inc.

United States District Court, S.D. Indiana, Terre Haute Division

October 14, 2016

Amy L. Schneider and Janet E. Breneman, Plaintiffs,
v.
Union Hospital, Inc., Defendant.

          ORDER

          HON. JANE MAGNUS-STINSON, UNITED STATES DISTRICT JUDGE

         Presently pending before the Court in this putative collective and class action brought under the Fair Labor Standards Act (“FLSA”) and the Indiana Wage Payment Act (“IWPA”) are: (1) a Motion to Certify Combined Class Action and FLSA Collective Action filed by Plaintiffs Amy Schneider and Janet Breneman, [Filing No. 78]; (2) a Motion for Approval of Class Action and Collective Action Notice filed by Plaintiffs, [Filing No. 80]; and (3) a Motion for Leave to Submit Surreply to Plaintiffs' Motion for Approval of Class Action and Collective Action Notice filed by Defendant Union Hospital, Inc. (“Union Hospital”), [Filing No. 96].

         I. Background[1]

         A. Union Hospital and its Method of Paying Employees

         Union Hospital currently employs over 1, 800 hourly, non-exempt employees at its Terre Haute, Vigo County facility. At Union Hospital, there are more than 100 different departments, with over 1, 200 job categories. [Filing No. 88-1 at 3; Filing No. 88-2.] These departments include Maintenance, Housekeeping, Respiratory Therapy, Cardiovascular Testing, Support Staff, Information Systems, and Medical Records, with the majority of Union Hospital's employees working in patient care areas such as Nursing. [Filing No. 88-1 at 3; Filing No. 88-1 at 9.]

         From 2003 through October 24, 2015, Union Hospital used software called Kronos to record employees' time. [Filing No. 79-1; Filing No. 79-9 at 2-3.][2] Employees used a specified telephone in his or her department to activate Kronos when they clock in and out. [Filing No. 54 at 3.] The location of the telephone varied by department - some employees had desk positions and could clock in from their desk, while others could clock in from a number of phones located within their department. [See Filing No. 88-3 at 14; Filing No. 88-4 at 3-4.] Any telephone at Union Hospital could be used to clock in, regardless of the department the employee worked in, and some employees would use phones outside of their department when clocking in despite Union Hospital's instruction not to do so. [Filing No. 88-1 at 6-7.] Further, some employees could manually adjust their own time entries, while others could not. [Filing No. 88-1 at 4-5; Filing No. 88-3 at 31-32.]

         From 2003 to October 24, 2015, Union Hospital paid its hourly employees for time worked in increments on one-tenth of an hour. [Filing No. 54 at 4; Filing No. 88-1 at 4.] When an employee clocked in, his or her time was rounded up to the nearest one-tenth of an hour, and when an employee clocked out, his or her time was rounded down to the nearest one-tenth of an hour. [Filing No. 54 at 4.] Union Hospital considered non-compensable time at the beginning and end of an employee's shift to be “a grace period…because that was reflective of [the employee's] practice….” [Filing No. 88-1 at 4.] This was based on “the practice of… employees based upon feedback from… leadership and managers who work[ed] with them.” [Filing No. 88-1 at 8.]

         Union Hospital produced documents during discovery, which describe the manner in which Kronos kept track of employees' time:

Round Rule: 6-0 In & 6-5 Out
All in punches are rounded forward to the nearest tenth of an hour. If an employee clocks in between 6:55 and 7:00 the punch is rounded to 7:00 for payment. If an employee clocks in between 7:01 and 7:06 the punch is rounded to 7:06 for payment. The Kronos time card will reflect the actual punch time. Punches are rounded in this manner regardless of scheduled shift start time.
Example a.
If an employee was scheduled to begin work at 7 a.m. and docked in at 6:55, the punch would be rounded to 7:00 for payment.
Example b.
If an employee was scheduled to begin work at7 a.m. and clocked in at 7:01, the punch would be rounded to 7:06 for payment.
Alt out punches are rounded backward to the nearest tenth of an hour. If an employee clocks out between 7:30 and 7:35 the punch is rounded to 7;30 for payment. If an employee clocks out between 7:36 and 7:42 the punch is rounded to 7:36 for payment. The Kronos time card will reflect the actual punch time.
Example c.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:32 p.m., the punch would be rounded to 7:30 for payment.
Example d.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:37 p.m., the punch would be rounded to 7:3S for payment.
Example e.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:26 p.m., the punch would be rounded to 7:24for payment, Example f.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:20 p.m., the punch would be rounded to 7:13 for payment.

[Filing No. 79-1.]

         Beginning on October 25, 2015 and continuing to the present, Union Hospital changed its rounding system within Kronos to a system in which it rounded forward two minutes or backward three minutes to the nearest tenth. [Filing No. 79-2.] Union Hospital produced a document in discovery which describes the new rounding system:

Round Rule: 6-3
All punches in and out are rounded to the nearest tenth, Punches are rounded forward 2 minutes or backward 3 minutes to the nearest tenth. If an employee clocks in between 6:58 and 7:03 the punch is rounded to 7 for payment. If an employee clocks in between 7:04 and 7:09 the punch is rounded to 7:06 for payment. The Kronos time card will reflect the actual punch time, Example a.
If an employee was scheduled to begin work at 7 a.m, and clocked in at 6:55, the punch would be rounded to 6:54 for payment.
Example b.
If an employee was scheduled to begin work at 7 a.m. and clocked in at 7:03, the punch would be rounded to 7:00 for payment,
Example c.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:34 p.m., the punch would be rounded to 7:36 for payment.
Example d.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:38 p.m., the punch would be rounded to 7:36 for payment.
Example e.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:26 p.m., the punch would be rounded to 7:24 for payment.
Example f.
If an employee was scheduled to end work at 7:30 p.m. and clocked out at 7:23 p.m., the punch would be rounded to 7:24 for payment,

[Filing No. 79-2.]

         Union Hospital has advised that the Kronos time records for each hourly paid employee are the best and only records Union Hospital has to determine each employee's starting and ending time for each date he or she worked. [Filing No. 79-3 at 10-14; Filing No. 79-8 at 23-32.] Union Hospital does not have any documentation to indicate that it ever told its hourly employees that it was rounding the employees' time punches or paying employees for less time than recorded in the Kronos system, or that the clock-in and clock-out process had a built in “grace period.” [Filing No. 79-3 at 4-7.] Union Hospital did not pay its employees based on the time they entered the building and the time they left; rather, it did not consider employees to be working until they had arrived in their “department” and clocked in on a specified telephone that activated the Kronos system. [Filing No. 79-3 at 14-19.] Union Hospital policy required that every hourly-paid employee's time records, for every shift and in every week, had to be reviewed and approved by his or her supervisor before they were sent to the Payroll Department and paychecks were generated. [Filing No. 79-3 at 20-22; Filing No. 79-8 at 32-40.]

         B. Union Hospital's Employee Handbook

         Union Hospital's Employee Handbook provides the following information regarding defining employee work time, the manner in which Union Hospital required employees to record their work time, and disciplinary rules relating to an employee's failure to comply with Union Hospital's timekeeping and tardiness policies:

ABSENTEEISM AND TARDINESS
* * *
Tardiness - Employees are expected to be at their workstation and ready to work at the time their shift begins; otherwise the employee typically will be considered to be tardy. Unless hospitalized, on family medical leave, jury duty or workers compensation, employees are expected to call in on a daily basis for each day they will not be at work.
Guideline for disciplinary action: Tardiness
• 5 instances in a rolling 6 months - verbal
• 6 instances in a rolling 6 months - written warning
• 7 instances in a rolling 6 months - suspension/termination
A pattern of tardiness over the course of employment is also subject to termination.
* * *
HOURS OF WORK
* * *
Employees are expected to be in their department and ready to work at the beginning of the shift. (Example: an employee working 7 a.m. to 3:30 p.m. would be ready to work at 7 a.m. 7:01 is considered tardy.
* * *
RECORDING TIME WORKED
All hourly paid employees are required to accurately record their time personally by use of the specified phone in your department. Time is not to be called in for or by others. Recording time for another employee or altering time is grounds for immediate dismissal.
Unless authorized to begin work early by a supervisor, no employee should begin work or clock in more than five (5) minutes before start of the shift. Similarly, unless authorized to work late by a supervisor no employee should continue working or clock out later than five (5) minutes after the end of the shift. (Example: If shift is 7-3:30, the employee is expected to start work at 7 a.m. and complete the shift at 3:30 p.m. Unless a supervisor authorizes otherwise, the employee should begin work and clock in between 6:55 a.m. and 7:00 a.m. and end work and clock out between 3:30 p.m. and 3:35 p.m.)
Employees who leave Campus at anytime during a shift are to clock out and clock back in. Campus is defined as any sidewalk adjacent to ...

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