Jefferson Health sued for alleged WARN Act violations, illegal layoffs

PHILADELPHIA — Jefferson Health, parent company of Lehigh Valley Health Network (LVHN), is facing a proposed class-action lawsuit alleging the hospital system violated federal labor laws when it laid off hundreds of employees this fall without providing the required 60-day notice.

The lawsuit, filed Tuesday in U.S. District Court for the Eastern District of Pennsylvania, claims Jefferson failed to comply with the Worker Adjustment and Retraining Notification Act, or WARN Act, when it carried out systemwide layoffs affecting 1% of its 65,000 employees in October and November.

According to the complaint, the proposed lead plaintiff, Ciara Brice, was terminated Nov. 12 from her job as a medical assistant with no advance warning. Brice also has not received the severance pay she was promised, her attorney, Jeremy E. Abay of Philadelphia law firm Pond Lehocky Giordano Inc., said.

The WARN Act requires certain large employers to file notice with state labor departments ahead of mass layoffs, a threshold that can be triggered when an employer cuts at least 500 jobs. Although Jefferson’s layoffs were spread across facilities from South Jersey to near Scranton, Abay argued the system — which now includes Lehigh Valley Health Network — operates as a single employer and should be treated as such under federal law.

Jefferson disputed the allegations.

“We believe the facts will show that there was no violation of the federal WARN Act,” Jefferson Health said in a statement.

Jefferson has faced persistent financial strain. In August, the health system reported a $195 million operating loss on $15.8 billion in revenue for the fiscal year ending June 30. The organization has rapidly expanded, growing from three Philadelphia hospitals in 2015 to more than 30 facilities across Pennsylvania and New Jersey.

The layoffs followed a report from credit rating agency Fitch Ratings, which downgraded Jefferson’s outlook to negative.

The lawsuit seeks back pay, benefits and damages for all employees who were laid off without receiving a 60-day notice.