Former Westlake employees sue hospital's owner

Charge retaliatory termination by Pipeline Health for whistle-blowing

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By Michael Romain

Staff Reporter

Two former employees of the shuttered Westlake Hospital, 1225 Lake St. in Melrose Park, have filed a lawsuit against the hospital's owner.

The lawsuit, filed in the Circuit Court of Cook County on March 24, claims that the company fired Marianna Woosley and Phyllis Morris — Westlake employees for 28 and 26 years, respectively — in retaliation last year after the plaintiffs provided information and evidence demonstrating that Pipeline was attempting close down the hospital in violation of a temporary restraining order filed against it by the village of Melrose Park. 

Melrose Park sued Pipeline Health and what the lawsuit claims were two shell companies — Pipeline-Westlake Hospital LLC and SRC Hospital Investments II LLC — which the California-based company allegedly "would use to purchase and quickly close" Westlake despite telling state regulators that it would continuing operating Westlake and providing charity care, or free or reduced health care for low-income patients, for at least two years following the change of ownership transaction.  

The mandatory requirement to continue providing charity care put Pipeline Health "in a difficult position," the lawsuit states. 

"On the one hand, Pipeline Health knew that it would not follow through on any sworn promises to provide charity care because it planned to permanently close the hospital immediately upon purchase," the lawsuit states. 

"On the other, Pipeline Health knew that without making the sworn charity care promises, the [Illinois Health Facilities and Services Review Board, which regulates hospital acquisitions] would deny its application and Pipeline Health would lose out on the opportunity to purchase" West Suburban Medical Center, 3 Erie St. in Oak Park, and Weiss Memorial Hospital in Chicago. The latter two hospitals were the only "profit-generating hospitals that [Pipeline's] investors were determined to acquire."  

Once Pipeline secured regulatory approval, it finalized the purchase of Westlake on Jan. 31, 2019 before announcing three weeks later on Feb. 16, 2019 that it would soon file an application to close the hospital. 

The lawsuit states that Woosley and Morris learned of Pipeline's plans to close Westlake "on or around Feb. 16, 2019," when it filed an application with the state's Review Board, requesting permission to discontinue all services. Melrose Park sued Pipeline for fraud and violations of the village's municipal code on March 7, 2019, the lawsuit explains. 

Even though Pipeline's application was scheduled for review by state regulators during a meeting on April 30, the company tried closing the hospital before the meeting, prompting Melrose Park on April 9 to file a temporary restraining order in the Circuit Court of Cook County prohibiting Pipeline "and its affiliates from closing Westlake Hospital before its application was approved by the Review Board," the lawsuit states. 

On the same day, Pipeline Health CEO Jim Edwards instructed senior officials within Pipeline and Westlake to start "shutting down all operations" at Westlake and "vacating the facility." 

After learning of the village's temporary restraining order, Woosley and Morris began providing the village with evidence that Pipeline was violating the order and state law by attempting to close a hospital before the state granted permission. 

On May 2, Pipeline — "furious with both Plaintiffs for reporting its violations" — fired Woosley and Morris. No other employees were fired, the lawsuit states. 

Pipeline directed Westlake to file for Chapter 7 bankruptcy in August 2019 in federal bankruptcy court in Delaware. Westlake closed in the same month. 

The lawsuit was filed by attorney Ari J. Scharg, of Edelson PC, the same law firm that filed the lawsuit against Pipeline on behalf of Melrose Park. Woosley and Morris are both seeking back pay, with interest, damages for their emotional distress, punitive damages, all litigation costs, reasonable attorneys' fees, and all other relief available at law." The lawsuit did not specify a dollar amount. 

Westlake's emergency department has since been temporarily reopened by the state as an alternate care facility designed to take in COVID-19 patients, in case existing hospitals in the area become overwhelmed.

Attempts to contact representatives with Pipeline Health on Monday were unsuccessful. 

CONTACT: michael@oakpark.com 

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