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Fran A. Babych, For Herself and On Behalf of Similarly Situated Others v. Psychiatric Solutions

November 9, 2011


The opinion of the court was delivered by: Judge Joan H. Lefkow


Plaintiff Fran Babych filed suit against her former employers alleging violations of the Fair Labor Standards Act ("FLSA"), Family Medical Leave Act, Age Discrimination in Employment Act, Illinois Minimum Wage Law, Illinois Human Rights Act, Illinois Whistleblower Act, and common law claims for retaliatory discharge. Before the court are Babych's motions requesting (1) approval of a judicially supervised notice of an FLSA collective action under 29 U.S.C. § 216(b), and (2) leave to amend her complaint to add Christine Puncochar as a named plaintiff. For the reasons stated below, Babych's motion for approval of judicially supervised notice [#56] will be granted and her motion to amend the complaint [#103] will be granted.


BHC Streamwood Hospital, Inc., which does business as Streamwood Behavioral Health Center ("Streamwood"), provides inpatient hospital treatment for children and adolescents with acute psychiatric problems. (Pl.'s Ex. 9, Babych Decl. ¶ 1.) It is located on a campus in Streamwood, Illinois that includes other inpatient treatment facilities affiliated with Psychiatric Solutions, Inc. ("PSI"). (Id.) Babych, a registered nurse, worked at the Streamwood campus from October 1999 to May 22, 2008. (Id.)

Defendant PSI owns 95 inpatient behavioral healthcare facilities throughout the United States, Puerto Rico, and the U.S. Virgin Islands. (Pl.'s Ex. 2; Defs.' Ex. 1, Schwieger Decl. ¶ 5.) It acquired Streamwood in July 2005. (Babych Decl. ¶ 2.) On November 15, 2010, PSI was acquired by Universal Health Services, Inc. As of that date, it has functioned as a non-operating holding company without employees. (Schwieger Decl. ¶ 3.) PSI's primary assets are the stock or equity interests of its subsidiaries. (Id.) PSI owns Streamwood, one of its hospital subsidiaries, through the intermediate subsidiary BHC Holdings, Inc. (Id. ¶¶ 6, 23.) PSI does not control the management or operations of its hospital subsidiaries. (Id. ¶¶ 8--20.)

Babych worked as a Utilization Review Case Manager ("UR Case Manager") at Streamwood from March 2008 to May 2008. (Babych Decl. ¶¶ 2--4.) As UR Case Manager, Babych collected information from in-patient charts, medical records, and treaters and input the data into written requests for a patient's continued stay at Streamwood. (Id. ¶ 10.) She sent these requests to state, federal, and private insurance payers to obtain authorization for additional paid days of care for Streamwood's patients. (Id.)

Babych attests that she routinely worked more than 40 hours per week while she was a UR Case Manager and that she regularly observed other UR Case Managers working in excess of 40 hours per week. (Id. ¶ 7.) Babych and the other UR Case Managers were classified as salaried employees exempt from overtime under the FLSA. (Id. ¶ 6.)

Babych attests that her job duties did not require the exercise of independent judgment with respect to matters of significance and that she was not involved in managing Streamwood's business operations. She relied on manuals and guidelines to perform her duties, which primarily consisted of inputting data into forms. (Id. ¶¶ 9, 11, 14.) For many continued stay requests, Babych used a web-based format that was provided by HealthSystems of Illinois. (Id. ¶ 12.) Her work was supervised by a UR Director named Donna Stone, and she had no control over which cases she worked on. (Id. ¶¶ 9, 10.) Babych did not supervise any employees and did not have the discretion to hire or fire employees or interview job applicants. (Id. ¶¶ 15, 19.) Babych attests that she did not deliver or administer services directly to patients and did not provide clinical care, make decisions concerning patient care, or make final determinations about whether or not a patient was certified for additional days in the facility. (Id. ¶¶ 17--18.)

On May 21, 2008, Babych called Streamwood's external ethics hotline to report that she had been told to doctor her requests for stay in order to prolong inpatient treatment at Streamwood. (Amend. Compl. ¶¶ 22--30; Babych Decl. ¶ 3.) She was fired the next day. (Babych Decl. ¶ 3.)


I. Motion for Judicially Supervised Notice Under 29 U.S.C. § 216(b)

Babych moves to conditionally certify an FLSA collective action on behalf of the following group:

All current and former employees of Psychiatric Solutions, Inc. during the statutory period who were Utilization Review Case Managers, Utilization Review Case Specialists, or who held a similarly titled position and job duties, who worked at least one hour of overtime, and who were not paid overtime compensation because Psychiatric Solutions, Inc. misclassified the employees as exempt.

Pl.'s Mot. for Cert. at 2. She proposes to send notice by first class mail and by posting notice in all of PSI's work locations throughout the United States, ...

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