Alliance HealthCare Loses Bid To Toss Overtime Suit

October 6, 2010
by Jocelyn Allison

Law360, New York (October 04, 2010) -- Alliance HealthCare Services Inc. has lost a bid to toss a proposed class action accusing the provider of diagnostic imaging services of failing to provide meal and rest breaks and failing to pay proper overtime wages.

Judge Cormac J. Carney of the U.S. District Court for the Central District of California denied the defendant's motion to dismiss Thursday, rejecting its argument that the complaint didn't have sufficient facts to support the claims.

The judge said plaintiff Shane Studley had added details to the complaint about how the job duties of the proposed class members, when combined with Alliance's scheduling practices, "inhibited their ability to enjoy full meal and rest periods."

The amended complaint, filed June 22, also fleshed out Studley's claims that the company regularly required employees to transmit their procedure logs after clocking out for the day, the judge said.

"Alliance argues that there can be no recovery for alleged damages prior to February 2009, which is when Alliance allegedly memorialized this policy in a written directive," Judge Carney wrote. "This argument fails, however, because Mr. Studley alleges that (1) he was 'explicitly directed' to comply with this policy beginning in January 2007, and (2) this policy deprived him of wages he was legally entitled to."

Studley, a former Alliance technologist in California, also supplemented his allegations that the company "systematically applied erroneous formulas" when calculating regular rates, and as a result failed to pay proper overtime rates, the order said.

Studley also accused Alliance of violating California's unfair competition law, gaining an advantage over competitors by failing to compensate its employees properly, a claim that the company argued was time-barred.

Judge Carney took no position on the dispute over whether the unfair competition claim was time-barred, saying the matter was better resolved on summary judgment, according to the order.

He also withheld judgment on the parties' disagreement regarding whether the plaintiff had exhausted his administrative remedies under the California Labor Code Private Attorneys General Act, saying it, too, was better suited for summary judgment.

First filed in California Superior Court in December 2009, the complaint was removed to federal court in January. The court dismissed the complaint June 2, but gave the plaintiff an opportunity to re-plead his claims.

The case alleges Alliance has continued to violate wage and hour laws after settling a similar class action brought on behalf of technologists in Jones v. Alliance Imaging in Alameda County Superior Court.

Alliance settled that case for $2.5 million without admitting fault in 2007. Studley claims Alliance has continued to allow employees to work off the clock and skip meal and rest breaks since reaching the settlement.

An attorney for Alliance and an attorney for the plaintiff could not immediately be reached for comment Monday.

Alliance HealthCare is represented by Matthew C. Kane, Sabrina A. Beldner and Sylvia J. Kim of McGuireWoods LLP.

The plaintiff is represented by Shaun Setareh of the Law Office of Shaun Setareh, David Spivak of the Spivak Law Firm and Louis Benowitz of the Law Office of Louis Benowitz.

The case is Shane Studley v. Alliance HealthCare Services Inc., case number 10-cv-00067, in the U.S. District Court for the Central District of California.

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