In late December, two longtime respiratory therapists at Gifford Medical Center in Randolph discovered an unexpected bonanza — roughly $100,000 each — in their final paychecks of 2022.

Until last year, Timothy Flanagan and David Gehlbach were unaware that the medical center had been drastically underpaying them for working on-call shifts.

Instead of getting time and a half for the overtime shifts, as required under federal and Vermont employment laws, the two therapists were paid in the $10- to $12-an-hour range. It was about one-third of their regular rate and not much more than the state’s minimum wage.

The mega end-of-the-year payouts were apparently Gifford’s way of trying to make good. Before anyone awards Gifford an “A” for honesty, however, there’s more to the story.

The Dec. 30 checks supposedly covered two years of underpayments. Flanagan and Gehlbach, who have worked at Gifford for 15 and 12 years, respectively, contend it’s been going on much longer.

On April 4, Gehlbach and Flanagan filed a lawsuit in U.S. District Court to recover “unpaid back wages” for all of their overtime work.

The federal suit doesn’t mention any dollar figures. For one of his clients, the amount could exceed $1 million, Steven Robinson, a Waterbury, Vt., attorney who is representing the respiratory therapists, told me.

For a small hospital that suffered almost $3.7 million in operating losses during its most recent fiscal year, the lawsuit’s timing can’t be good.

While Gifford has made “some effort to true up the underpayments, it’s still far less than (Gehlbach and Flanagan) were entitled to,” Robinson said. “They want to be paid for their work as the law requires.”

The Fair Labor Standards Act, which President Franklin D. Roosevelt signed in 1938 as part of the New Deal, established the 40-hour work week and overtime pay for anything more. After workers clock 40 hours, the law requires employers to pay time and a half — the regularly hourly rate plus 50%.

Gehlbach and Flanagan declined interview requests last week but allowed their attorneys to talk about the case. Here’s what Robinson and Norwich attorney Joseph Galanes, who is also working on the case, told me:

After putting in eight-hour shifts on five consecutive days, Gehlbach and Flanagan often worked an on-call shift of about six hours each day or night. When on call, Gifford required the two respiratory therapists to be within 10 minutes of the medical center, if needed in cases of emergency.

Gehlbach resides in Barre, Vt., and Flanagan is from Williston, Vt. — both well beyond 10-minute drives. “They live so far away, they had to stay at the hospital,” Robinson said.

Under federal and state labor laws, a hospital must pay time and a half whenever an employee works more than eight hours a day and 80 hours in a 14-day period.

Gifford’s decision not to pay time and a half for overtime work was “neither reasonable, nor in good faith,” the lawsuit alleges.

Last spring, Flanagan and Gehlbach learned hospital administrators were looking into possible underpayments for overtime work. The therapists didn’t hear anything more until December when Gehlbach received a check for $108,000 and Flanagan got $93,000.

“The checks came out of the blue,” Robinson said.

What prompted Gifford to fess up?

“There are still a lot of missing pieces in the puzzle,” Robinson said.

“The primary part of this case will be the state law claims that go back beyond the two-year federal statute of limitations,” Galanes said.

In his early research, Galanes found an annual report that Gifford had filed last July with the Green Mountain Care Board, which is charged with reviewing Vermont hospital budgets. To help “stabilize and address our workforce challenges,” considered a “critical need in the organization,” Gifford reported hiring a compensation consultant.

Last week, I asked Ashley Lincoln, Gifford’s vice president of development and public relations, the reason behind the payments and whether the consultant was part of the equation.

The medical center couldn’t comment on “specific questions due to the ongoing litigation,” Lincoln said.

Gifford, however, “disputes several of the allegations in the complaint and will defend against the claims in court,” Lincoln wrote in an email. “Gifford follows state and federal wage and hour laws.”

Looking for a legal expert’s viewpoint on the matter, I called Joan Vogel, a professor at Vermont Law and Graduate School who specializes in employment law.

Vogel wasn’t surprised to hear the respiratory therapists didn’t know Gifford had been underpaying them for the on-call overtime shifts. Employment laws are complex, she said.

Like the plaintiffs’ attorneys, she wonders what motivated Gifford to write the December checks. The medical center is “not doing this out of the goodness of its heart,” she said.

What happened at Gifford also speaks to the importance of labor unions, she added. Without a union looking out for them, people in many industries are unaware of workers’ rights.

“Wage theft is very common,” Vogel said. “Employers try to cut corners to save money.”

A hospital wanting to reduce its overhead should look elsewhere before shortchanging respiratory therapists, Vogel pointed out. As the COVID-19 pandemic showed, respiratory therapists are critical frontline workers, caring for patients who are having trouble breathing or suffer from cardiopulmonary disorders.

“These are life-saving individuals,” she said. “Do you want a respiratory therapist to be making minimum wage?”

I’d like to think the lawsuit has taught Gifford a lesson about treating employees fairly. But I’m not holding my breath.

Jim Kenyon can be reached at jkenyon@vnews.com.

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