John Dudrey Outlines Some Potential Risks for Employers in Classifying Nurses as Exempt Employees

Labor and employment attorney John Dudrey contributed an article to Law360 titled “Humana FLSA Case Shows Risks of Nurse Misclassification,” published November 10, 2021. (Subscription required.) Dudrey discusses a recently settled collective action that illustrates some potential pitfalls of classifying nurses as exempt employees.

The case arose when health insurance company Humana, Inc., classified registered nurses it employed under the general heading of clinical nurse advisers as exempt, based on the Fair Labor Standards Act’s administrative and learned-professional exemptions. In December 2017, a former clinical nurse adviser sued Humana under the FLSA contending that she and other clinical nurse advisers had been misclassified and were entitled to unpaid overtime wages.

Dudrey notes that except for nurses who meet the definition of a supervisor, none of the FLSA’s exemptions for overtime are readily applicable to nurses. He concludes: “The O’Leary case teaches many lessons, but perhaps the clearest is that although classifying employees as exempt saves overtime costs in the short term, it can also impose long-term — and unexpected — costs as well. For this reason, companies should consider the downside risk of misclassification lawsuits as well as the practicalities of classifying employees as nonexempt but working diligently to manage their overtime hours.”