Nurses Claim Hospitals Conspire to Keep Pay Low

WASHINGTON, D.C. (WOMENSENEWS)–Alleging that hospitals colluded to suppress their pay, nurses in four cities filed suit last month against national hospital corporations and are investigating legal action against hospitals in other cities.

In their June 20 suit, nurses claim that hospital companies in Chicago, Albany, San Antonio and Memphis violated federal anti-trust laws by exchanging information about nurses’ pay to keep wages down, which they say has exacerbated the nationwide nurse shortage.

Hospital officials “were actually talking to each other and keeping our salaries within a certain range so as not to tax the hospitals,” said Lisa Reed, a plaintiff in the lawsuit. Hospitals, she said, are expanding, buying new computers and phone systems, and redecorating, “but there’s no money for nurses.”

Reed, a registered nurse at Advocate South Suburban Hospital in Hazel Crest, Ill., with 15 years of experience, earns about $27 an hour, the mean hourly wage for nurses, according to the Bureau of Labor Statistics. She said she received her most recent raise of 27 cents an hour four years ago.

“I have seen so many nurses leave the profession they love because of working conditions that make it harder to give our patients the care they deserve,” said Cathy Singer-Glasson, a registered nurse and president of the Nurse Alliance, a subsidiary of the SEIU, the Service Employees International Union, a Washington, D.C.-based group of 1.8 million workers. “Now we find out through these lawsuits that while nurses were fighting for our patients, some hospitals may have been working illegally to hold down our wages.”

Hospital corporations named in the suit dismissed the claims made by the nurses.

‘Ill-Considered Litigation’

“We believe that these allegations are without merit and we will vigorously defend the lawsuit,” said Art Massa, a spokesperson for Evanston Northwestern Healthcare, one of almost 20 health care corporations named as defendants. “We are confident that when this ill-considered litigation is resolved, it will be clear that our actions have been fully in accordance with the law.”

Other defendants echoed the sentiment.

“There is absolutely no merit to this case,” said Donna Evans, a spokesperson for Ellis Hospital in Schenectady, N.Y. “At Ellis, we negotiate our wage rates with the nurses union, so our nurses have agreed to these wages in the past through the collective bargaining process.”

The alleged loss of income has a disproportionate effect on women, who dominate the nursing field, said Dan Small, a partner at the Washington, D.C.-based firm Cohen, Milstein, Hausfeld and Toll, who is representing the plaintiffs. He placed the blame on market manipulation rather than gender discrimination.

Others see a historic pattern of sex discrimination at work.

Nurses “historically have been disadvantaged in pay because nursing has been a traditionally female field,” said Marcia D. Greenberger, co-president of the National Women’s Law Center in Washington, D.C. She cited a March 2006 study by the Institute for Women’s Policy Research that found that the median wage for pharmacists, a field that requires similar training and education levels, is 40 percent higher than it is for nurses. Women comprise more than 90 percent of nurses but only 48 percent of pharmacists.

Reed agreed. “When you hear of other jobs, especially male-dominated jobs, they would never tolerate a 27-cent raise,” she said.

Union Nurses Earn More

Nurses who belong to unions earn 13 percent more than non-union members, according to the recent study from the Washington-based Institute for Women’s Policy Research.

Of the country’s 2.4 million registered nurses, 472,000–or 20 percent–are represented by unions, according to 2003 data provided by United American Nurses, a subsidiary of the AFL-CIO, a federation of international and national labor unions.

Nurses who filed the suit expect it to go to trial in two to four years. In the meantime, the nurses will likely expand the litigation to other cities, Small said. He declined to say which hospitals are under consideration.

The nursing field has experienced recurring shortages dating back to the beginning of the 20th century. The most recent shortage began to emerge in 1998, and, by 2001, the vacancy rate at hospitals hovered at 13 percent. By 2014, the U.S. Department of Labor anticipates a need to fill 1.2 million nursing slots to care for the aging population.

Shortages undermine patient care, according to the Institute for Women’s Policy Research study. Inadequate staffing levels lead to nurse burnout and stress, increasing the rate of medical errors and reducing the quality of patient care. As a result, more negative outcomes, including death, occur.

Stopping the Nursing Hemorrhage

Higher wages can help stop the hemorrhage, according to the study. Nurse pay stagnated until 2000; once it began to rise, hospitals added 186,500 nurses between 2001 and 2003.

But Massa sees no correlation between wages and staffing levels. “This suit further alleges that ‘low wages’ for nurses are driving up nurse vacancy rates,” he said. “This is not the case for Evanston Northwestern Healthcare. Our year-to-date nurse vacancy rates are a low 3.5 percent as compared to an all-Chicago vacancy rate of 9 to 11 percent.”

Small took issue with that claim, estimating the nurses at Evanston and at other Chicago-area hospitals are underpaid to the tune of $5,000 a year. In Memphis, nurses lost an average of $14,000 per year per person thanks to artificially low wages, Small said. In Albany, they lost an average of $6,000 per year; and in San Antonio, they lost $1,300 per year.

“For the four cases combined, we’re talking hundreds of millions of dollars earned by the nurses that they should have been paid had they been paid a competitive wage but never got because of a conspiracy to keep wages depressed,” Small said.

Hospital officials engaged in a “regular, longstanding and detailed exchange of wage information” that resulted in artificially suppressed wages, according to findings from an investigation conducted by the SEIU and Small’s firm that form the basis of the lawsuit.

“That led to nurse wages being, first of all, virtually the same from hospital to hospital and at a level lower than they would have been had the hospitals been competing against each other,” Small said.

Allison Stevens is Washington bureau chief at Women’s eNews.

Women’s eNews welcomes your comments. E-mail us at editors@womensenews.org.