By Jack Cumming
In the United States, the plaintiffs’ bar, also known as the trial bar, is unusually powerful and presents a challenge to even the most responsible of responsible businesses. This poses a particular threat to an industry like senior living, which commendably serves a vulnerable population for whom mishaps can be devastating.
Attorney Risk
People who care enough to take on the challenges of caring for those rendered frail, confused, or failing due to old age are particularly susceptible to the predatory focus of unscrupulous attorneys. We should quickly add that not all attorneys are unscrupulous.
We hear rumors of attorneys who initiate lawsuits only to get a percentage of the settlement. The cost of pursuing justice is often more than just paying off the predator. Settling can be less costly than to pay to defend against an unwarranted trial bar attack. That’s unfair and unjust.
Settling is often a business decision rather than a triumph of justice. In contrast to the risk that senior living providers accept by the very nature of their business, there is little risk for plaintiffs’ attorneys who file dubious lawsuits.
Labor Risk
There’s another side to this. Corporations employ workers to carry out a mission. Employee advocacy groups, including some labor unions, press to give those workers more pay for less work. Thus, in negotiations, wage rates and breaks are often part of the terms.
The labor negotiators can press for more without limit, while employers have to balance the need to stay competitive against the temptation to cave into excessive demands. This may be different for government workers negotiating with elected officials. The government doesn’t have the same competitive pressures as private enterprise.
Legislative Risk
This is relevant because, in more liberal states like California, unions and other employee advocates have been pressing for legislation to give them benefits that they might otherwise have difficulty obtaining at the bargaining table. This includes mandatory breaks and abstruse requirements like paying “regular rate” pay instead of “base rate.”
This has given rise to a new type of questionable lawsuit, remunerative for attorneys but confusing for ordinary people. You might think that employers could rely on their payroll processing provider to protect them from this kind of lawsuit, but that’s not the case. In a panel at the LeadingAge California Conference recently, we heard how a highly respected provider organization came a cropper of this Catch-22 legislation.
The provider was sued by a disgruntled, terminated employee represented by a lawyer who claimed insufficient breaks and inadequate severance pay (that “regular rate” vs. “base rate” rationalization). The provider had to retain a defense lawyer and much more.
You might think that the provider could subrogate the claim against the payroll firm, since the provider relied on the payroll processing for guidance and compliance documentation. The payroll firm’s contract, however, specifies that it has no liability for situations like this.
As a resident, though, I must confess that the payroll firm’s disclaimer struck me as similar to those in many residential agreements that residents are required to accept. Justice can be hard to find in an excessively legalistic society.
Documentation is Essential
The outcome of this presentation was the defense attorney’s advice that documentation is essential to any defense. Moreover, the provider can’t rely on an outside firm, like the payroll provider, to come forward with the needed documentation or support. Still, documentation burdens have been becoming excessive, particularly in lawsuits concerning the adequacy of care.
The only way to track employee breaks is to monitor employees during their time on the premises, but this can lead to claims of privacy rights that limit such scrutiny. That, too, is a Catch-22. Then, I thought of a capability recently added to Epic Systems that allows physicians to document their patient visit encounters. You can read about that here. Others may have a similar capability.
There’s no reason why Epic or others couldn’t offer a payroll processing system adapted to the special tracking needs of healthcare providers like CCRC operators. Recently, Epic has been moving toward a comprehensive system targeted to providers previously served by MatrixCare and PointClickCare. In a litigious society, such an integrated, self-documenting system could be a provider’s best friend.
The emerging takeaway appears to be that technology with self-documentation is the most effective way to ensure compliance and to provide sufficient documentation to defend against predatory lawsuits. Let’s hope that we can get there soon to restore justice to providers and to those they serve.
