In a legal maneuver to try to boost nurses’ salaries, federal class-action lawsuits filed Tuesday accused hospitals in Chicago and three other U.S. cities of colluding to hold nurses’ wages down.
As a result of the hospitals’ actions, nurses allegedly suffered wage losses of about $5,000 a year in Chicago and an average of $6,000 yearly in the cities affected, said Dan Small, an attorney with the Washington law firm that filed the cases on behalf of nurses in Chicago, Memphis, San Antonio and Albany, N.Y.
Hospital officials, relying on local wage surveys, allegedly agreed informally not to compete over nurses’ wages, according to Small. He said the lawsuits were based on interviews with dozens of current and former hospital officials, and could lead to similar actions in other cities.
“Nobody said we have a formal agreement that we won’t compete,” he said. Rather, he said the hospitals have relied on alleged “assurances and understandings” that they would not outbid each other.
If successful, the price tag for the lawsuits could run into the “hundreds of millions of dollars” for back wages and legal fees, Small predicted
In Chicago, the lawsuit was filed on behalf of Lisa Reed, a nurse at Advocate South Suburban Hospital in Hazel Crest, and Mary McDowell, a nurse at Advocate Christ Medical Center in Oak Lawn.
The facilities targeted in the four lawsuits include both giant health-care systems and small local hospitals.
Named in the Chicago-area lawsuit were Advocate Health Care, Children’s Memorial Hospital, Evanston Northwestern Healthcare, Michael Reese Hospital, Resurrection Health Care and University of Chicago Hospitals.
Several of the Chicago-area facilities named in the lawsuit rejected the charges, while others declined to comment, saying they were studying the allegations.
“We think the lawsuit is totally without merit. We have immense respect for our nurses and we pay them appropriately,” the University of Chicago Hospitals said in a statement.
Officials at Children’s Memorial Hospital also denied the charges, and said they were surprised to be named in the lawsuit because the hospital’s nursing vacancy and turnover rates are among the lowest of the nation’s children’s hospitals.
They said the nursing turnover rate last year at Children’s was 1.5 percent, compared with 6.5 percent for similar hospitals across the U.S.
The lawsuit claims that Chicago-area hospital officials, in direct conversations or at professional meetings, have consulted about the wages paid to nurses. The result, according to the lawsuit, is that nurses’ salaries have been “restrained” and kept within a “narrow band.”
“These lawsuits reveal that there are certain ways nurses are not valued in our country, and we say that has to stop,” said Andy Stern, president of the Service Employees International Union, which represents about 84,000 nurses in the U.S.
One of at least four unions competing for nurses’ loyalty across the U.S., the SEIU has been embroiled in several organizing battles, including a lengthy one at Advocate Health Care. Among the local hospitals named in the lawsuit, only the University of Chicago Hospitals has unionized nurses, SEIU officials believe, though they belong to the Illinois Nurses Association, not the SEIU.
The union did not take part in the legal action, an SEIU official explained, because they are class actions filed only on behalf of the individual nurses whose pay was affected.
The SEIU financed a study released in March by the Institute for Women’s Policy Research that examined wage problems facing nurses, and Small said his law firm used the findings to conduct its own research.
Heidi Hartman, head of the Institute for Women’s Policy Research, said her group’s study led to the conclusion that “something seems to be holding nurses’ wages down.”
One reason for this, she suggested, could be collusion by health-care officials. Another, she added, could be “the tradition of paying lower wages for women.” As she pointed out, more than nine out of 10 of the nation’s nurses are women.
But the lawsuits contend that it was not tradition, but rather calculated decision-making by hospital officials that led them to swap information about wages in order to plan their budgets.
The lawsuit said “informal discussions” about nurses’ salaries have come up among Chicago-area nursing recruiters at meetings sponsored by the Metropolitan Chicago Healthcare Council (the name as published has been corrected in this text).
In response to the lawsuit, the association, which represents 140 Chicago-area hospitals and health-care organizations, said it has been conducting salary surveys for the last 30 years that comply with the government’s antitrust guidelines.
In the early 1990s the Justice Department reached an agreement with several Utah hospitals over alleged collusion over nurses’ wages and set guidelines on sharing information about wages, Small said.
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sfranklin@tribune.com
