Improperly classifying workers risks years of litigation, huge damages

On May 2, 2018, the U.S. Department of Labor (DOL) filed a complaint against Medical Staffing of America, LLC, (doing business as Steadfast Medical Staffing) and Lisa Ann Pitts (individually and as the owner and officer of Steadfast) asserting violations of the Fair Labor Standards Act (FLSA) for failure to pay overtime wages, improper classification of workers, and failure to maintain adequate and accurate employment records.

In January 2022, the U.S. District Court for the Eastern District of Virginia—applying the “economic realities” test from the U.S. 4th Circuit Court of Appeals (whose rulings apply to all employers in West Virginia, North Carolina, and South Carolina)—agreed with the DOL and concluded Steadfast and Pitts violated the FLSA and owed back pay and liquidated damages. Steadfast and Pitts appealed the determination to the 4th Circuit on February 2, 2024. With over $9 million dollars at stake, all parties await the appeals court’s decision.

Background

Steadfast was founded in 2015 with the goal of helping nurses achieve more flexibility with higher pay. It uses a roster of nurses to “fill” shift openings from healthcare provider clients. In 2021 and 2022, its roster included over 1,100 nurses.