Former Employees Of Shuttered Westlake Hospital File Labor Lawsuit Against Its Owner

Wednesday, September 11, 2019 || By Michael Romain || @maywoodnews

The former employees of the now-shuttered Westlake Hospital,1225 W. Lake St. in Melrose Park, filed a federal class action lawsuit against Pipeline Health, the hospital’s owner, on Sept. 11.

The employees claim that Pipeline violated the Federal Worker Adjustment and Retraining Notification Act by not providing them with at least 60 days’ advance notice of termination and that Pipeline created a shell company “for the sole purpose of acquiring — and then immediately closing — Westlake Hospital” as part of a strategy developed to benefit Pipeline’s investors.

The lawsuit states that Pipeline created Pipeline-Westlake Hospital LLC, which the plaintiffs call “a sham entity” with no decision-making authority or independence, in order “to ensure that its investment strategy was carried out as intended.”

This most recent lawsuit is the latest in a string of legal actions that have been taken since Pipeline, which is based in California, purchased Westlake Hospital along with two other Chicago-area hospitals — Weiss Memorial in Chicago and West Suburban Medical Center in Oak Park — in January.

Two weeks later, Pipeline announced that it would immediately close the Melrose Park facility, even though company representatives had promised state regulators and community leaders that it would keep the hospital open and affordable for at least two years.

In March, the village of Melrose Park filed a lawsuit against Pipeline, accusing the company along with other investors in the deal of “committing fraud and civil conspiracy in connection with their purchase of Westlake Hospital.” In addition, a court upheld a preliminary injunction that prohibited Pipeline-Westlake from closing the hospital.

In August, Pipeline-Westlake filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Delaware. The case was eventually transferred to the United States Bankruptcy Court for the for the Northern District of Illinois, where it is pending.

On Aug. 19, a Chapter 7 bankruptcy trustee notified 549 Westlake Hospital employees that they were terminated, according to the lawsuit, which specifically names three employees — two nurses and a unit secretary — as plaintiffs suing on behalf of other workers.

The plaintiffs were “blindsided” by the announcement that the hospital was closing and that they were terminated, the lawsuit states.

“Pipeline Health is an investment firm that made a decision to decimate the Westlake Hospital community in order to make more money for its investors,” Ari Scharg, the attorney for the former employees, stated in an email.

“But Pipeline Health underestimated the strength and resiliency of the Westlake Hospital caregivers and staff,” he continued. “Just as they fought tooth and nail for their patients over the last six months, this lawsuit shows that they will continue to aggressively fight for their own rights and for rights of other hospital workers in Illinois who we think are similarly at risk by the for-profit hospital industry.”

Officials with Pipeline Health could not be immediately reached for comment. VFP

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