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Archives for April 2015

Another Nursing Home Chain is Sued for Overcharging Medicare

Mark Napier

The U.S. Department of Justice announced on April 21, 2015 that it has intervened in three False Claim Act lawsuits and filed a consolidated Complaint against HCR Manorcare. The Complaint alleges that HCR Manorcare knowingly and routinely submitted false claims to Medicare and Tricare for rehabilitation therapy services that were not medically necessary.

HCR Manorcare is based in Toledo, Ohio. It is one of the nation’s largest providers of short term post-acute and long term care. It operates approximately 281 skilled nursing facilities in 30 states, including seven facilities in the Greater Cincinnati area.

The DOJ’s Complaint was filed in the U.S. District Court for the Eastern District of Virginia. The Complaint alleges that HCR Manorcare pressured its skilled nursing facilities’ administrators and rehabilitation therapists to meet unrealistic financial goals. This resulted in billing for unnecessary services to residents.

According to the DOJ, HCR Manorcare set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs. And, it threatened to terminate its skilled nursing facility managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments. In addition, HCR Manorcare also allegedly kept patients in its facilities longer than medically necessary so they could increase its receipt of Medicare payments.

HCR Manorcare in response has argued that the DOJ made the decision to intervene in the civil lawsuit despite its full cooperation with the government’s investigation. HCR Manorcare has stated the lawsuit is unjust and it will vigorously defend the company in court.

Follow this link for more information.



Complaining About Harassment To The Harassing Supervisor Is Protected Activity

Jon Allison

Monday Blog
The Sixth Circuit last week affirmed a jury verdict of over 1.5 million dollars in a sexual harassment and retaliation case against New Breed Logistics, a Tennessee supply-chain logistics company.
New Breed has a warehouse in Memphis, Tennessee where temporary employees made up 80% of its workforce during the relevant time frame.  These temporary employees were not given the company handbook containing the company’s sexual harassment policy.
James Calhoun, a New Breed Supervisor, sexually harassed three female temporary employees by regularly making sexual comments and sometimes making sexual contact with them, including pressing his “private parts” against them.  The three women and one male who witnessed the conduct complained to Calhoun and asked him to stop his behavior.  Calhoun told them he would not get in trouble and if anyone went to human resources to complain he would have them fired.  All four were then terminated in quick succession either directly by Calhoun or by someone else after Calhoun claimed there was a performance issue.
After a 7-day jury trial the jury found New Breed liable for sexual harassment and retaliation and awarded over 1.5 million dollars in compensatory and punitive damages and other monetary relief.  New Breed requested a new trial but that request was denied resulting in the appeal to the Sixth Circuit.
With respect to the retaliation claims, on appeal, New Breed argued that complaining only to the harassing supervisor and telling him to stop was not enough to constitute protected activity.  The Sixth Circuit had never addressed this issue before, but the Fifth Circuit had surprisingly found this argument persuasive when it addressed the question previously in 2004.  The Sixth Circuit found that oral complaints about harassment made to the harassing supervisor did constitute protected activity under Title VII.  It noted, “[i]mportantly, the language of the opposition clause does not specify to whom the protected activity must be directed.”
With respect to the harassment claims, the Sixth Circuit found that New Breed could not avoid liability using the Faragher/Ellerth affirmative defense which allows an employer to avoid liability for harassment where it can show that it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” and the plaintiffs “unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise.”  The Court said this defense is simply not available where employees suffer a “tangible employment action” such as termination.  New Breed probably would have had a tough time proving the defense anyway in light of the fact that it failed to distribute its handbook containing the sexual harassment policy to temporary workers and because a call to the complaint hotline about Calhoun was not properly investigated.
The Court also left in tact the punitive damages award finding the evidence sufficient that the employer engaged in the conduct with malice or with reckless indifference to the federally protected rights of the plaintiffs.

The opinion is attached here.


Focus On LGBT Rights

Jon Allison

Monday Blog
Historic Settlement Of Transgender Bias Case
Lakeland Eye Clinic earlier this month agreed to settle the first ever Transgender bias lawsuit brought by the Equal Employment Opportunity Commission.  According to the lawsuit, Lakeland hired Brandi Branson when she was still presenting as a man.  After a few years of employment, she began dressing as a woman and was harassed and ultimately terminated.  To settle the case, Lakeland agreed to pay $150,000, adopt a policy prohibiting discrimination against transgender workers and provide anti-discrimination training to its employees.  Read more here.

Teachers Terminated For Relationship Despite County Ordinance And Church Policy
In Orange County, Florida, two female teachers at Aloma Early Childhood Learning Center, which is run by the Aloma Methodist Church, were terminated after a school administrator discovered they were in a relationship.  According to the two teachers, they were called into the school director’s office and questioned.  They admitted to the relationship.  They were then told they were living in sin, they could no longer work there, and the only way they could keep their jobs was to repent and disavow their lifestyles.  The director tried to talk to the women separately to get them to repent.  Orange County has a human rights ordinance that makes it illegal to terminate employees based on sexual orientation.  In fact, the United Methodist Church has a policy on sexual orientation that calls for equal protection under the law for all gay citizens.  Find more information in this article.

Transgender Employee Ordered To Say His Choice To Act Male Was Not Compliant With Company Policy
Last week Tristan Broussard filed a lawsuit against First Tower Loan, a financial loan company based in Mississippi, alleging he was forced out after the company found out his driver’s license identified him as female.  Broussard was hired in February 2013 as a sales representative.  In March the company noticed while processing his employment papers that he was listed as a female on his driver’s license.  Broussard was questioned about it and told the company he was a transgender male.  Shortly after that, he was asked to sign a document in which he was to promise to dress as a female and stay in rooms with other female employees when traveling on business.  The document also said that his preference to act and dress as a male was not consistent with company policy.  Broussard refused to sign.  This article goes in to greater detail.


National Criticism Leads To Change In Indiana Law

Jon Allison

Monday Blog
It was a contentious few weeks in Indiana following the passage of the Religious Freedom Restoration Act.  Criticism of the law was widespread and immediate.  The concern was that RFRA gave business owners the right to discriminate against gay, lesbian, bisexual or transgender citizens.  CEOs of many of Indiana’s largest employers sent a letter to Governor Mike Pence and other lawmakers saying they were “deeply concerned about the impact it is having on our employees and on the reputation of our state.”  The NCAA, which is based in Indianapolis (where the men’s Final Four was held last week), was among the first to criticize the law and threatened to move future events as well as its headquarters out of the state if it wasn’t revised.  Governor Mike Pence then signed a language fix that forbids using RFRA as a defense for discriminating on the basis of sexual orientation or gender identity.  Support for LGBT rights has increased dramatically in the last 10 years.  As an example, in 2004, according to Gallup, 55 percent of the country was against same-sex marriage while 42 percent were in favor.  Now, those numbers are exactly the opposite.  For more on this topic, read these Huffington Post, NPR, and ABC News posts.

New York City Underpaying Minority Employees
The Equal Employment Opportunity Commission said last week New York City has been discriminating for decades against black and Hispanic female employees with respect to compensation and should pay $246 million in back wages to make up for it.  In 2013 Local 1180 of the Communications workers of America filed a complaint with the Commission alleging discriminatory practices with respect to pay on behalf of approximately 1,000 employees.  For the most part, the city failed to respond to multiple requests for information relevant to the allegations.  In December 2014 the city was told that if it did not provide information the EEOC would make a determination against it.  That warning was met with silence.  For more read these articles from New York Daily News and New York Post.