Former employees of the now-closed Santa Cruz Valley Regional Hospital in Green Valley, Ariz., have filed a class-action lawsuit alleging they were not paid for accrued time off upon termination, the Green Valley News reported Aug. 13.
The lawsuit was filed Aug. 11 in U.S. District Court in Arizona on behalf of Stephanie Garrett, RN, and other workers who lost their jobs after the hospital closed June 30. Santa Cruz Valley Regional announced the closure about a week after issuing a Worker Adjustment and Retraining Notification Act notice June 20, which gave hospital workers 60 days' notice of the mass layoff.
The lawsuit, accessed by Becker's, alleges that the hospital terminated about 300 employees July 22 on one day's notice, even though it had pledged "to keep them employed until Aug. 20 and pay out their unused, earned paid time off upon termination, neither of which it did."
The lawsuit also alleges Ms. Garrett questioned these actions in a July 27 letter to Steven Harris, chairman of the board of the hospital, "requesting an explanation for, among other things, the reduction of employees' earned and available PTO hours, and the failure to pay out any PTO hours upon termination."
According to the lawsuit, Ms. Garrett received no written reply to her letter, and now, on behalf of herself and other employees, seeks to recover 60 days' wages and benefits, pursuant to the Worker Adjustment and Retraining Notification Act, and the unpaid wages she says they are due under Arizona law.
Santa Cruz Valley Regional was owned by Lateral Investment Management, a San Mateo, Calif.-based investment firm, and Jeremiah Foster of Resolute Commercial Services was tapped to serve as the chief restructuring officer. Mr. Foster did not immediately respond to a request from Becker's seeking comment.
Mr. Harris, who stepped down as Santa Cruz Valley Regional's CEO July 29, but still heads the hospital board, told the Green Valley News in July that the Worker Adjustment and Retraining Notification Act is open to interpretation.
"The lawyers have identified that there are some provisions around financial hardship that may relieve us from some of that responsibility," he told the newspaper. "But we feel a moral responsibility, if not a legal responsibility, to employees."
Santa Cruz Valley Regional issued the layoff notice after Tucson, Ariz.-based TMC Health canceled its bid to buy the hospital.