Employment Law

MFLC Overtime Pay Lawsuit

Issue: Overtime pay improperly denied

Military and Family Life Consultants Class Action Against MHN

Lieff Cabraser, with co-counsel, represents Military & Family Life Consultants (“MFLCs”), who have worked as independent contractors for MHN Government Services, Inc. and Managed Health Network, Inc. MFLCs work at military bases across the U.S., and they provide a variety of services to soldiers and their families.

The class action complaint alleges that MHN has misclassified MFLCs as independent contractors, and that MHN should have paid and should be paying MFLCs for all the overtime hours they work, as well as for other benefits regular employees earn. The case seeks to provide money and benefits for current and former MFLCs throughout the nation, under federal and state laws.

The lawsuit alleges that MHN exercises extensive control over the MFLCs — including by training them, requiring them to pass tests, requiring them to meet with supervisors daily, providing materials for MFLCs to present to service members, prohibiting family visits, imposing a dress code, and more. MFLCs constitute MHN’s entire workforce, and MFLCs have no opportunity for profit or loss like true independent contractors do. Furthermore, MFLCs are not allowed to perform professional counseling or therapeutic services – they are limited to a consulting role.

Case Status

In June and July 2013, the Court ordered notice to be sent to all MFLCs who worked for MHN at some point after May 15, 2009. The notice describes the litigation and provides MFLCs with an opportunity to opt into the case by submitting a Consent to Join form. The deadline to submit a Consent to Join form passed on September 25, 2013.

In July 2014 the Court denied defendants’ motion to compel arbitration. The defendants filed an appeal.

On December 17, 2014, the United States Court of Appeals for the Ninth Circuit upheld the district court’s determination that the arbitration clause in MHN’s employee contract was procedurally and substantively unconscionable. MHN appealed to the United States Supreme Court. MHN did not contest that its agreement had several unconscionable components; instead, it asked the Supreme Court to sever the unconscionable terms of its arbitration agreement and nonetheless send the MFLCs’ claims to arbitration.

The Supreme Court granted MHN’s petition for certiorari on October 1, 2015, and was scheduled to hear the case in the 2016 spring term in MHN Gov’t Servs., Inc. v. Zaborowski, No. 14-1458. While the matter was pending before the Supreme Court, a $15 million settlement of the litigation was reached on behalf of 2,808 Class Members who worked for MHN MFLCs. The final approval hearing will take place in March 2016.

Contact Lieff Cabraser

Current and former MFLCs who worked for MHN or any other company that wish to submit a complaint, report their work experiences, or learn more about this lawsuit and their legal rights should use the form below to contact an employee rights lawyer at Lieff Cabraser. Alternatively, you can call Lieff Cabraser employment attorney Phong-Chau Nguyen toll-free at 1 800-541-7358. We will review your claim confidentially, for free, and without any obligation.

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