Arbitration Battle in SNFs Isn’t Just for Residents

Arbitration agreements between skilled nursing operators and residents have become a key battleground in the long-term care space, as the Centers for Medicare & Medicaid Services (CMS) seeks to roll back an Obama-era regulation that would have banned them.

But the fight over arbitration clauses — which prevent parties from seeking legal remedies from disputes in favor of a third-party process — also extends to employees, and a Supreme Court case could soon decide their fate.

Long-term care providers should keep a close eye on National Labor Relations Board v. Murphy Oil USA, lawyer Thomas Keim, Jr. told an audience at the American Health Care Association’s (AHCA) annual convention and expo in Las Vegas on this week.


That case, heard by the Supreme Court earlier this month, could decide whether employers can require workers to enter into arbitration agreements. These clauses help companies protect themselves against costly class-action lawsuits, as they require employees to work out wage or other employment issues individually, according to Keim, a partner at FordHarrison LLP in Spartanburg, S.C.

For instance, Keim said, if two or more employees band together and claim they have been shortchanged for work performed during lunch periods, a company could find itself on the hook for back wages for all similar employees at the firm — whether or not their paychecks were handled improperly.

“The costs of defending it are staggering,” Keim said.


But federal labor officials have argued that such clauses violate laws that protect workers’ rights to take collective actions against employers. Now it’s up for the high court to decide, with a ruling expected before the end of 2017.

In the meantime, Keim suggested using a time-tracking system that requires employees to confirm that they received uninterrupted lunch breaks. But that system only works, Keim said, if everyone is encouraged to be honest: Labor officials will be suspicious if employees never report they have any issues with wages or hours.

Other legal landmines

Keim ran through multiple other hot-button legal issues that could soon affect long-term care providers, including the growing movement to “ban the box” — or preventing employers from asking about applicants’ criminal pasts.

Though SNFs and other health providers are statutorily prohibited from hiring people convicted of certain crimes, such as assault against the elderly, there is a significant legal gray area: Theft, for instance, may not be a legal disqualifier for a job applicant, but a nursing home operator still may not want to hire someone with a conviction for stealing.

That’s why it’s important for providers to document the standards through detailed and clear internal policies, Keim said.

“If there are some crimes that aren’t specifically prohibited, but you don’t hire [those] people, just be able to articulate a great reason why,” Keim said. “We have vulnerable adults, and they have money on them. We don’t hire anyone who’s stolen anything.”

Though Keim noted that the current Republican administration will be less likely to pursue the “ban the box” movement than its Democratic predecessor, he still emphasized that the law around the issue is constantly evolving. For instance, while recreational marijuana has been legal in Nevada since July 1, Keim cautioned that a federal court has ruled that cannabis use can still disqualify candidates from employment, since it remains a federal crime.

Up in the air

Keim also discussed the general air of uncertainty around the Trump administration, with the Department of Health and Human Services currently under the guidance of acting secretary Eric Hargan, a president who’s generally averse to regulations, and several failed attempts at repealing Obamacare.

“If you have someone at your company that’s in charge of keeping up with what’s going on … that’s great,” Keim said. “If that’s you, I feel sorry for you.”

Written by Alex Spanko

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