Albany Medical Center will pay $4.5 million to settle its share of a federal class-action lawsuit alleging officials conspired with counterparts at other hospitals in the area to keep pay down for about 4,000 registered nurses.
According to court documents, similar settlements for about 2 percent of nurses’ pay from June 2002 to June 2006 were reached earlier with companies operating St. Peter’s Hospital in Albany, St. Mary’s Hospital in Amsterdam, Samaritan Hospital in Troy and Albany Memorial Hospital.
The hospital companies admitted no wrongdoing. The suit filed in 2006 is still pending against Ellis Hospital in Schenectady.
The nurses’ attorney, Daniel Small, said Wednesday that about $9 million is going in an escrow account for payouts pending the conclusion of the case against Ellis. Lawyers are requesting one-third. Small said his firm has similar lawsuits in various stages in Chicago, Detroit, Memphis, Tenn., and San Antonio, while other law firms also have cases.
After a law professor’s article questioned why skilled nurses’ pay scales were lower than expected in a national nursing shortage, the Service Employees International Union got interested in litigation, Small said. The union doesn’t currently represent registered nurses at the Albany-area hospitals that were sued. Ellis nurses are members of the New York State Nurses Association, he said.
“When we did investigate for the five cities we ended up filing lawsuits in those,” Small said. “The investigations uncovered evidence of conspiratorial activity to depress the wages of nurses.”
The suit alleges the hospitals in the greater Albany area were all members of an association that published an annual survey of upstate New York hospital salaries and benefits, including customized reports about competitors. The lawsuit also alleges that the hospitals kept nursing pay artificially low and that the hospitals paid entry-level RNs at an hourly rate that differed from one another by no more than $1.
In 2009, a new RN at Ellis was earning $22.71 an hour, according to its nurses’ union.
“While Albany Medical Center continues to deny any wrongdoing as we have from the outset of this case, we have agreed to settle this lawsuit to limit the expense and distraction of additional court proceedings,” hospital spokeswoman Jennifer Freeman said. “We will not put the cost to continue fighting this lawsuit before the critical needs of our staff, patients and the public.”