Government lawyer accuses Comprehensive Healthcare of shorting workers $20M

It wasn’t an isolated issue or the result of a good-faith mistake that employees at Comprehensive Healthcare’s 15 Western Pennsylvania facilities weren’t being paid for all the hours they worked.

Instead, a lawyer with the U.S. Department of Labor told a federal judge Monday, it was part of the company’s policy and practice.

“The employer cut corners,” attorney Alejandro Herrera said. “They knew what they were doing.”

Supervisors at Comprehensive’s nursing care facilities would reach out to the company’s administrators for help to address the pay issues, he said, knowing their employees were being shorted on their overtime.

“No matter how much documentation they submitted, no matter how many approvals were obtained, the employees were just not getting paid,” Herrera said.

So much so, that the federal government believes that Comprehensive owes its employees $20 million in unpaid back wages — with the potential to double that to account for damages.

Attorneys for the company, though, say that while some money is owed, it is nowhere near the amount alleged by the government.

“We expect you’ll find a small group of people owed money, and they should get that judgment,” attorney Jeffrey A. Schwartz said in his opening statement. “It is nothing remotely approaching $20 million.”

The Labor Department filed a complaint against Comprehensive in 2018 alleging that, over a period of four years, the New York company had failed to pay employees for working overtime and failed to maintain accurate records of wages and hours worked.

The bench trial, before U.S. District Judge William S. Stickman IV, is expected to last at least two weeks.

The government, which has hundreds of exhibits, expects to call 40 witnesses, including current and former employees. On Monday, Herrera said that the employees were paid based on the hours listed on their work schedule and not the time on the punch clock. They were also shorted for working through their lunches, he said.

The company’s decision not to pay appropriately, he continued, contributed to staffing crises.

“The people will not stay in these buildings to work,” Herrera said. “It’s making it impossible to operate these homes.”

The labor case is just one of several legal entanglements for Comprehensive in recent years involving staffing problems.

Last month, a federal criminal jury found the company guilty of health care fraud, though all five executives who were charged in the same case were acquitted. Among the allegations: administrators lied to state and federal regulators that they were meeting mandated staffing requirements by listing ghost employees in the records.

Then, during the covid-19 pandemic, Comprehensive’s Brighton Rehabilitation and Wellness Center in Beaver County — one of the largest nursing facilities in Pennsylvania — was the site of one of the worst outbreaks in the country, in which at least 80 people died, according to court documents.

Those deaths are the subjects of several lawsuits.

Over the summer, the government accused Comprehensive of attempting to sell off its assets to avoid having to pay whatever damages might be levied in the labor department case.

Although the government attempted to halt the sales, Stickman denied the motion, giving the green light for Comprehensive to sell seven of its facilities for $56 million.

In his opening Monday, Herrera said that Sam Halper, Comprehensive’s owner, who was cleared in the criminal case, was involved in the day-to-day decision-making regarding pay for the facilities’ employees.

Herrera told Stickman that under the federal Fair Labor Standards Act, the judge is required to award damages equal to double the amount of back pay — unless the defendants are able to show the errors were in good faith and that there were reasonable grounds for them to occur.

“The evidence will show, your honor, they can’t meet that burden.”

But Schwartz, the attorney for Comprehensive, said that the federal government has overstated what happened in the labor case.

“Compliance with overtime rules is not a simple task,” he said. “Employees, occasionally, make technical mistakes.

“Like the (criminal) case next door a couple weeks ago, this is an overreach.”

Schwartz accused the Department of Labor of using biased former employees, who have the potential to gain from any potential award, to exploit their case “into this massive scheme to defraud these employees.

“Were mistakes made? Absolutely,” he said. “It is not widespread and doesn’t carry across every classification across all 15 facilities.”