U.S. Labor Department Settles Lawsuit With Providence, RI, Home Care Agency Sued Over Employee Firing; Worker Had Complained Of Unauthorized Health Insurance Deductions

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has settled a lawsuit it had filed against Nursing Placement Home Care, Inc., of Providence, Rhode Island, for firing an employee who had complained to the Department after the company began making unauthorized deductions from the employee’s paycheck for health insurance premiums.

The consent judgment and order signed by U.S. District Judge Ronald R. Lagueux on July 6, 1999 permanently enjoins Nursing Placement Home Care, Inc. from engaging in any act of retaliation in violation of the federal law covering employee benefit plans. As part of the settlement, the defendant also paid $7,000 to the wrongfully terminated employee.

According to James Benages, New England regional director of the Labor Department’s Pension & Welfare Benefits Administration (PWBA), Susan Martin Hoppe was a full time employee of Nursing Placement from February 17, 1994 through November 18, 1994, working as an office manager assistant. As one of its benefits for full time employees, Nursing Placement sponsored a health plan through Blue Cross and Blue Shield of Rhode Island. After a three month waiting period, Martin Hoppe became a participant in the company’s health plan in May 1994.

“Between that time and late October 1994,” said Benages, “the company deducted no health insurance premiums from Martin Hoppe’s paychecks. Then, without informing Martin Hoppe and without her consent, the employer withheld $50.00 from her paycheck. When she asked for an explanation, she was told that from that point forward $50.00 per week would be withheld from her paycheck to cover both current and retroactive health insurance premiums.”

Benages noted that, between October 26 and November 18, 1994, the company continued to make the deductions from Martin Hoppe’s paychecks despite her objections. When she complained to the Labor Department’s Pension & Welfare Benefits Administration, Martin Hoppe was fired from her job.

The Department’s suit alleged that this was a clear violation of the law which protects employees from discrimination, discharge, or other types of retaliation when they take actions related to their rights under an employee benefit plan, or when they complain to the Labor Department. The law, enforced by PWBA, is known as the Employee Retirement Income Security Act (ERISA) and covers private pension plans, health care plans, and other types of employee benefit plans.

Benages stressed that the main issue in this case was not whether it was illegal for the employer to deduct health insurance premiums from the employee’s paychecks, but that it was a violation of the law for the employer to take any adverse action against the employee, including firing her, just because she questioned the deductions and complained to the Labor Department about them.

Benages noted that the Department’s lawsuit, filed with the U.S. District Court for the District of Rhode Island on April 20, 1998, had asked the court to permanently enjoin Nursing Placement Home Care, Inc., from future violations of ERISA, and to require the defendant to pay Martin back wages plus interest as equitable restitution. The company agreed to entry of the consent judgment while neither admitting nor denying the Department’s allegations in the suit.

(Civil Action File No. 98-220L)

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Archived News Release — Caution: Information may be out of date.

Contact Name: John M. Chavez
Phone Number: 617. 565.2075