Iowa City UIHC Workers Win $15M Class-Action Lawsuit

Several thousand current and former employees of University of Iowa Health Care (UIHC) should soon see at least a little cash coming their way soon.

Six plaintiffs won their class-action lawsuit against UIHC in March 2022.  US Southern District of Iowa Chief District Judge Stephanie Rose gave preliminary approval last week to a settlement the parties agreed on in October of last year.

It will mean $15 million being distributed among more than 11,000 current or former workers once it’s finalized Aug. 23.

What happened?

The plaintiffs—Melinda Myers, Barbara Stanerson, John Eivins, Liv Kelly-Sellnau, Christopher Taylor, and Shuna Tosa—brought the suit against the Iowa Board of Regents, which oversees UIHC. The suit was converted to class action, meaning it covered thousands of health-care professionals as well as other types of workers at the hospital system who experienced similar things.

In their suit, the six alleged that their employer’s monthly pay structure was in direct violation of Iowa’s Wage Payment Collection Law, which requires employers to pay workers within 12 business days after the end of the period in which the wages were earned. The settlement covers these workers as the Wages Class.

Plaintiffs also argued their accrued vacation and sick pay was not paid out to employees in a timely matter. While Judge Rose did not find evidence such payments were not paid timely, she approved a settlement covering them as well. The settlement covers these workers as the Termination Class.

Another class, the FLSA Class, covers UIHC workers who worked in excess of 40 hours per week but were denied overtime.

Judge Rose found for the plaintiffs in March 2022 and noted UIHC changed their pay structure in direct response to the lawsuit.

“Our suit changed the way they pay people,” said Nate Willems, an attorney with Rush Nicholson who represented the UIHC employees.

Read that full decision here.

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What will they get?

The settlement allocated a total of $15 million. Here’s how that breaks down:

• Those in the Wages Class will receive their fair share of $10,900,000, “based on adjustments and overtime pay they untimely received and how much the member could hypothetically recover in liquidated damages under Iowa Code,” according to Judge Rose. Half of those workers will receive less than $500, but just under 3% will get a payout in excess of $5,000.
• Around 3,590 people in the FLSA Class—those who didn’t get overtime correctly between January 2017 and November 2020—will be paid $100 each.
• Around 5,578 people in the Termination Class will be paid $50 each.
• Each plaintiff will additionally get $10,000 “for work done on behalf of the class” and “to make up for financial and reputational risk undertaken in bringing the action,” Judge Rose ordered.
• Attorneys will receive 22.5% ($3,375,000).

For more details, click here: Order Granting Preliminary Approval of Settlement.

by Amie Rivers
6/26/23

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