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Court Rules Utilization Review Nurses Eligible for Overtime Compensation

Yesterday, a federal court ruled that Liberty Mutual’s utilization review nurses are entitled to overtime compensation because, despite their receiving salaries, Liberty Mutual has failed to show that these nurses meet the requirements of either the Fair Labor Standards Act’s (FLSA’s) administrative or professional exemptions.  This holding is a significant victory for the nurses.  The Judge followed a decision previously obtained by Nichols Kaster, LLP on behalf of other utilization review nurses in Clark v. Centene Co. of Tex., L.P., 656 F. App’x 688 (5th Cir. July 22, 2016)

Liberty Mutual’s utilization review nurses spend their workdays sitting at computers, reviewing requests for medical services relating to workers compensation.  Last summer, both the nurses and Liberty Mutual filed motions asking the Judge to rule in their favor based on the evidence.  Liberty Mutual argued it properly classified its utilization review nurses as exempt and ineligible for overtime time.  The nurses challenged Liberty Mutual’s defenses by arguing that they do not qualify for the exemptions because, despite holding RN licenses, these nurses do not engage in bed-side clinical nursing.  Their job is to review medical authorization requests against well-established guidelines to determine whether the criteria for medical necessity is met.   The nurses also pointed to standard accreditation guidelines and industry practices that illustrate utilization review work can be performed by lesser-credentialed individuals, such as licensed practice nurses.  Finally, the nurses established that utilization review does not relate the administration of Liberty Mutual’s general business operations or require the nurses exercise discretion and independent judgment with respect to matters of significance.      

The court agreed with the nurses on all elements of Liberty Mutual’s defenses.  The court found the utilization review process to require the “performance of routine mental . . . work,” and likened it to inspection-type duties, which is traditionally considered non-exempt under the regulations.  The court further found that “Plaintiffs relied on guidelines rather than their own judgement, wisdom, and training to determine whether treatment requests were medically necessary.”  These rulings permit the nurses to obtain backpay at the applicable overtime rate for all hours they worked over forty during relevant workweeks. 

“Our clients are pleased with the Court’s order, which is premised on a careful analysis of the nurses’ actual job duties,” remarked Rebekah Bailey of Nichols Kaster, PLLP who represents plaintiffs.  “We are looking forward to presenting evidence at trial of the strict production requirements Liberty Mutual imposes upon its utilization review nurses and the very long and stressful hours these nurses work as a result.”

The court scheduled a telephone conference with the parties on April 1, 2019 to discuss next steps.  A trial date has not yet been set.  The case is styled Rego v. Liberty Mutual Managed Care, LLC, Case No. 17-cv-00066 (E.D. Wis.). 

Photo by Luis Melendez on Unsplash