A recruitment agency in the Philippines, Sentosa Nursing Recruitment Agency, and two nursing homes agreed to pay more than $3 million to 184 nurses after a class action lawsuit was filed due to unpaid wages and violations of the Trafficking Victims Protection Act.
The two nursing homes, Golden Gate Rehabilitation & Health Care Center LLC and Spring Creek Rehabilitation and Nursing Center, owned by SentosaCare, are located in New York.
A New York federal judge green lit the deal on Thursday, five years after the lawsuit was first filed. The defendants settlement will resolve all claims for compensatory damages, punitive damages, interest, attorney’s fees and costs. Each class member of the lawsuit will receive the full amount of compensatory damages awarded to them, plus 9% annual interest, according to court documents.
The lawsuit, brought in March 2017 by Rose Ann Paguirigan on behalf of more than 200 nurses who were recruited in the Philippines to work at the Sentosa nursing homes, alleged that the defendants refused to pay wages required by their employment contracts.
The workers were threatened with civil litigation, professional disciplinary proceedings and criminal charges to keep them from leaving, according to court documents.
The complaint claims that a substantial number of foreign nurses were employed as RN managers and were not paid in full. It also argued that the $25,000 contract termination fee – referred to as an indentured servitude penalty – should not be allowed to be enforced.
A previous New York State Supreme Court case from 2010, SentosaCare LLC v. Anilao, had ruled that the indentured servitude penalty in Sentosa’s employment contract was unenforceable.
The plaintiffs argued that the reason for filing the lawsuits was not to recover actual losses, but to send a message to all foreign nurses that they could face civil litigation and incur substantial legal fees if they stop working. Since 2006, the defendants have filed lawsuits against at least 30 foreign nurses, according to court records.
Compensatory damages were calculated as the difference between the weekly salary class members would have received if they had been paid a salary at the applicable prevailing wage rate, and the compensation they actually received each week on an hourly wage basis, plus interest.
For example, the lawsuit determined that one of the plaintiffs should receive a settlement payment of $22,400.18, comprising $16,005.09 for prevailing wage underpayments and $6,395.09 for 9% interest.
Requests for comment from SentosaCare’s attorneys were not immediately returned.