Latest news with #CanadianHealthLabs
Yahoo
05-07-2025
- Health
- Yahoo
Travel nurse company asks court to strike down 'unconstitutional' law designed to nullify contracts
Canadian Health Labs wants the Court of King's Bench to strike down legislation that the province enacted last month, arguing it is unconstitutional, in a bid to avoid any legal or financial penalties over travel nurse contracts between the staffing agency and Vitalité Health Network. In documents filed with the court in Saint John, Canadian Health Labs alleges the Travel Nurses Act represents "unlawful interference" by the legislature of New Brunswick into a "freely negotiated commercial relationship between two commercial entities." It claims the act was "legislated in bad faith and constitutes an abuse of power by the province." The act is "improper, unconstitutional and unconscionable and must be struck down in its entirety," Canadian Health Labs argues in the documents, filed in response to Vitalité's statements of defence and counterclaims to the company's three lawsuits over the contracts. The Ontario-based company has also notified the provincial and federal attorneys general about the "questions of constitutionality raised in this matter," according to the documents. New Brunswick's attorney general declined to comment Friday through Department of Justice and Public Safety spokesperson Jadesola Emmanuel. She cited the matter being before the courts. The Office of the Attorney General of Canada has received notice of a constitutional question related to the provincial Travel Nurses Act, confirmed federal Department of Justice spokesperson Ian McLeod. It will "review in order to determine next steps," he said in an emailed statement. Bill was introduced in March Health Minister Dr. John Dornan introduced the Act Respecting Travel Nurses in March, after Vitalité cancelled the remaining shifts of travel nurses employed by Canadian Health Labs, even though its contract wasn't set to expire until February 2026. "The contract that we signed was not a good contract for New Brunswickers, for taxpayers," Dornan said at the time. It was signed in 2022 in the midst of the COVID-19 pandemic and dire staffing shortages, he said. "We were desperate." Canadian Health Labs charged about $300 an hour per nurse — roughly six times what a local staff nurse earns, Auditor General Paul Martin found in a report last summer. "The contracts with private nursing agencies were not reflective of best practices and did not demonstrate value for money," Martin said. Two days after the legislation was introduced, Canadian Health Labs launched its first lawsuit against Vitalité, alleging breaches of contract and seeking damages. Then, before the legislation was adopted, the company filed two more lawsuits over two other contracts, which were also signed in 2022 but had both expired in 2024. Canadian Health Labs alleged, among other things, that Vitalité deployed fewer "human health resource professionals" than stipulated, failed to pay invoices, and terminated a renewal "unilaterally and improperly." Dornan subsequently appeared before the legislature's standing committee on economic policy to discuss proposed amendments to the bill. Vitalité's lawyers had raised concerns about the expired contracts not being included, Dornan said. So the government decided it would be "prudent, and perhaps safer, to nullify all three contracts," which covered from July 2022 to February 2026 and totalled $98 million, according to the auditor general. Canadian Health Labs alleges the act "has the effect of allowing Vitalité and the province of New Brunswick to not pay its debts, obtain statutorily protected unjust enrichment, not to be held accountable to the various liabilities Vitalité incurred during its commercial relationship with CHL and attempts to shield Vitalité and the province of New Brunswick from judicial oversight and reprimand for its bad faith conduct." The "use of legislation to avoid payment of accounts receivable for services rendered is tantamount to theft," it claims. None of the allegations have been proven in court. Canadian Health Labs goes on to argue that despite the title of the legislation, the Travel Nurses Act "does not address travel nursing in the province." Travel nursing contracts between Vitalité and other companies — Canadian Health Labs' competitors — remain in place and "unaffected," it says. "When the government, acting as a commercial entity, decided it could pay less for the same services, it used its legislative power to deprive CHL of the contracted benefit," according to the documents. The Court of King's Bench of New Brunswick must be free to hear these matters and determine whether the conduct of Vitalité and/or the province of New Brunswick was unlawful, inequitable or deserving of sanction. - Canadian Health Labs In addition, "in anticipation of the legislation, Vitalité made a decision not to terminate the contract which would have triggered damages becoming due and owing on the date of termination." The company argues the government and Vitalité "sought out and induced CHL to enter contractual relationships with Vitalité because of an urgent and desperate need for healthcare providers to keep the hospitals open in New Brunswick," it says. Vitalité "voluntarily agreed to the terms of the contracts with CHL, with the full knowledge and approval of the province." "Without CHL providing nurses, patients would have died," it claims. "The Court of King's Bench of New Brunswick must be free to hear these matters and determine whether the conduct of Vitalité and/or the province of New Brunswick was unlawful, inequitable or deserving of sanction." If the act is not deemed "entirely unconstitutional," Canadian Health Labs argues the legislation does not prevent it from "bringing an action or arbitration for damages." In that alternative scenario, the company seeks a declaration that Vitalité is bound by the terms of the contracts with Canadian Health Labs and that arbitration and/or the lawsuits can proceed on their merits. It also requests that Vitalité's counterclaims be dismissed with costs, and seeks a court order appointing an arbitrator. Vitalité declined to comment, citing the ongoing court proceedings. Canadian Health Labs did not respond to a request for comment.
CBC
13-06-2025
- Health
- CBC
Vitalité files counterclaims to travel nurse contract lawsuits by Canadian Health Labs
Vitalité Health Network has filed counterclaims to the three lawsuits launched by Canadian Health Labs, alleging the travel nurse agency has "seriously compromised its ability to provide safe, effective and continuous health care." In documents filed with the Court of King's Bench in Saint John earlier this week, the regional health authority cites the Ontario-based company's alleged failure to fulfil "several" contractual obligations. These failures include deploying staff who don't have the training Vitalité requires, "including workers under unknown designations or as personal support workers" when the contract provided only for the use of licensed practical nurses and registered nurses, and not respecting the average number of daily teams required, according to the French documents. "Repeated and systemic failures" by Canadian Health Labs, or CHL, have also resulted in "considerable" financial losses, Vitalité claims, "constituting an abusive use of public funds." Among other things, it alleges CHL billed for services not rendered; incorrectly charged for HST; and overcharged for accommodation fees, travel expenses, vehicle rentals and daily allowances. In addition, Vitalité contends CHL failed to disclose a conflict of interest. No details are provided in the documents. Vitalité is seeking damages for breach of contract, punitive or aggravated damages, interest, costs and any other relief the court deems just. None of the allegations have been proven in court. Canadian Health Labs did not respond to a request for comment. CHL lawsuits allege breaches of contracts The company filed its first lawsuit against Vitalité in March, after the regional health authority cancelled the remaining shifts of travel nurses employed by CHL, even though its contract wasn't set to expire until February 2026. It alleged breaches of contract, including non-payments, and damages, including "irreparable" harm to its reputation. CHL subsequently filed two more lawsuits related to two contracts that expired last year. It alleged, among other things, that Vitalité deployed fewer "human health resource professionals" than stipulated in the contracts. Last week, the legislature adopted a law designed to get out of the contracts without facing any legal or financial penalties. "It's as tight as we can make it," Health Minister Dr. John Dornan recently told the legislature's standing committee on economic policy. "It does not absolutely preclude these current actions or subsequent actions," he said, but he believes any actions are "less likely to be successful." Contracts include termination clause, Vitalité says According to the counterclaims filed by Vitalité, its contracts with CHL state a party may terminate the agreement if the other party fails to meet its obligations, subject to prior notice. "On or about June 30, 2023, the network issued a letter of non-compliance to CHL describing their contractual breaches. "These shortcomings were never corrected by CHL and led the network to carry out an … audit of all invoices for the contract," which is still in effect. Auditor General Paul Martin lost his legal bid to get Vitalité to turn over its audits. He sought a court order to compel the regional health authority to disclose the documents as part of his investigation last year into the management and use of private agency nurses by Vitalité, Horizon and the Department of Social Development, dating back to 2022. Vitalité refused to provide the audit reports, saying they were commissioned in anticipation of litigation with CHL, and therefore protected by both litigation and solicitor-client privilege. Martin argued the Auditor General Act says his office is entitled to "free access" to all documents, whether they're confidential or not. Court of King's Bench Chief Justice Tracey DeWare dismissed Martin's application in a written decision June 2, saying the law doesn't explicitly state the auditor general is entitled to "privileged" documents. Martin is "assessing next steps," according to a statement from his office. He previously said the "risks that [Vitalité] identified in the audit reports and to what extent those risks were addressed" remain unknown. In a scathing report last June, Martin concluded "a lack of clearly defined vendor selection processes, poor contract oversight and deficiencies in payment review processes" with travel nurse contracts "resulted in undue risk to the province." He found Vitalité spent $123 million in travel-nurse contracts, including more than $98 million on the three contracts with CHL.
CTV News
11-06-2025
- Business
- CTV News
Judge denies N.B. auditor general's request to view internal audit reports on travel nurses
A Court of King's Bench justice has denied the New Brunswick auditor general's request to view Vitalité Health Network's internal audit reports on the agency's travel nurse contracts that began in 2022. According to a written decision from Chief Justice Tracey DeWare, the auditor general sought to compel Vitalité to disclose the reports as part of its investigation into the management and use of travel nurses. The decision says Vitalité ordered an internal audit for the period spanning August 2022 to June 2023. 'The Respondent (Vitalité) asserts these internal audits confirmed the existence of deficiencies in the performance of the agency nurses' contract with one of the agencies – Canadian Health Labs ('CHL'),' the decision reads. 'The Respondent and CHL are now involved in litigation arising from this contract. 'The Respondent has refused to produce the internal audit reports on the basis they were properly subject to both a litigation and solicitor-client privilege.' Last year, the auditor general's audit found Vitalité, Horizon Health Network and the Department of Social Development spent $173 million on travel nurse contracts between Jan. 1, 2022 and Feb. 29, 2024. 'The purpose of the audit was to determine if government contracts with private nursing agencies represented good value relative to their costs,' the written decision reads. 'As part of the audit process, the Applicant (auditor general) requested from the Respondent various information and documents. The Applicant was particularly interested in governance practices, policies and billings to the agencies.' Chief Justice DeWare said the auditor general argued section 13 of the Auditor General Act allows them to access documents and information that would otherwise be private or confidential. Vitalité argued the disclosure of the internal audit reports would 'prejudice its ability to prosecute the action against CHL.' Chief Justice DeWare said the court must interpret section 13 of the act restrictively, noting that it does not refer to privileged information. 'While I appreciate the Applicant's argument, the addition of the words 'confidential and private' to section 13 indicates an expanded scope to the information which could be sought, it falls short of explicitly stating an intention to have access to 'privileged' documents,' the decision reads. 'Solicitor-client privilege and litigation privilege are foundational to our legal system. 'Section 13(a) of the Act does not grant the Auditor General the authority to require production of documents or information which are properly subject to a solicitor-client or litigation privilege.' Chief Justice DeWare dismissed the auditor general's application and said Vitalité is entitled to costs, which are fixed at $2,000. For more New Brunswick news, visit our dedicated provincial page.
CBC
15-05-2025
- Health
- CBC
Travel nurse company launches 2 more lawsuits against Vitalité
A travel nurse company has launched two more lawsuits against Vitalité Health Network for allegedly breaching the terms of two contracts that expired last year. Canadian Health Labs filed notices of action with the Court of King's Bench in Saint John Wednesday over the contracts, which were both signed in 2022 and expired in June and September 2024, respectively, according to the documents. The Ontario-based company alleges, among other things, that Vitalité deployed fewer "human health resource professionals" than stipulated in the contracts, failed to pay invoices, and terminated a renewal "unilaterally and improperly." It contends it has suffered losses as a result of the health authority's actions and is seeking compensation, including punitive, aggravated and special damages, as well as costs and pre-judgment interest at a rate of seven per cent. Canadian Health Labs previously filed a lawsuit against Vitalité for allegedly breaching another contract that was slated to continue until Feb. 5, 2026, after the health authority cancelled the remaining shifts of its travel nurses in January. Bill is 'as tight as we can make it,' minister says The two new legal actions came to light Tuesday night when Health Minister Dr. John Dornan appeared before the legislature's standing committee on economic policy to discuss a number of proposed amendments to a bill designed to get the government out of that costly contract without facing any legal or financial penalties. Green Party Leader David Coon questioned how the bill, entitled An Act Respecting Travel Nurses, got tabled in its original form "without the experts in contract law catching the problems" that prompted the numerous amendments, echoing earlier musings by Tammy Scott-Wallace, the Tory MLA for Sussex-Three Rivers, about whether the original was "scribbled on the back of the napkin." Dornan told Coon that when the government first presented the bill, its "primary purpose, with advice from the [Office of the Attorney General], was to protect ourselves from the third contract, which was still in force." Since then, "actions have arisen that included the expired contracts," he said. Vitalité's lawyers had also raised concerns about the expired contracts not being included, Dornan said. So the government decided it would be "prudent, and perhaps safer, to nullify all three contracts," which covered from July 2022 to February 2026 and totalled $98 million, according to Auditor General Paul Martin. The company charged about $300 an hour per nurse — roughly six times what a local staff nurse earns. "The contracts with private nursing agencies were not reflective of best practices and did not demonstrate value for money," Martin has said. The bill passed second reading and will readily become law, given the Liberals' majority, but whether it will protect the government and Vitalité from being sued by Canadian Health Labs remains unclear. "It's as tight as we can make it," Dornan said in response to questions from Scott-Wallace. "It does not absolutely preclude these current actions or subsequent actions, but it does afford us a better protection than the original bill, and we feel that the actions commenced are less likely to be successful with these amendments," Dornan said. Company lawyer slams bill In response to the amended bill, Canadian Health Labs' lawyer Matthew Hayes fired off a letter to Justice Minister Rob McKee Wednesday, urging the province to reconsider. "We assert that the Legislature's actions to deny Canadian Health Labs its contractual rights, while actively resisting transparency, represent an unprecedented and troubling misuse of legislative authority," he wrote in the letter obtained by CBC News, which was copied to Dornan, Premier Susan Holt, Coon and interim Opposition Leader Glen Savoie. Hayes described the amended bill as a "deliberate act of legislative bad faith." "As acknowledged by the Dr. Dornan, Minister of Health, Canadian Health Labs played a critical role in responding during a time of urgent crisis, saving lives in New Brunswick. However, once the contract was deemed no longer advantageous, the government appears to have taken steps to deprive Canadian Health Labs of the negotiated benefits," he wrote. "The Minister of Health has also admitted that Vitalité Health Network continues to employ nurses from other agencies, raising questions about the fairness and intent of these actions." In addition, Vitalité chose not to terminate its agreement with Canadian Health Labs, "seemingly to enable the government to attempt to legislate this commercial agreement out of existence," demonstrating a "lack of honesty, transparency and accountability," Hayes alleged. None of the allegations in the statements of claim have been proven in court.
CBC
10-04-2025
- Business
- CBC
Travel nurse company launches lawsuit against Vitalité
A travel nurse company is suing Vitalité Health Network over alleged breaches of contract, including non-payments, as well as anticipatory breach of contract. Canadian Health Labs filed its lawsuit with the Court of King's Bench in Saint John on March 21 — two days after the provincial government introduced legislation to get out of the contract with the Toronto-based company and avoid facing legal or financial penalties. That legislation has not yet been passed. Vitalité cancelled the remaining shifts of travel nurses employed by Canadian Health Labs (CHL) on Jan. 30, even though its controversial contract with the private staffing agency wasn't set to expire until next year. In its statement of claim, Canadian Health Labs alleges it has suffered loss and damages, and will continue to suffer "irreparable" harm to its reputation. It is seeking damages in a number of areas, including for alleged unpaid invoices, for breach of the duty of good faith, for "unjust enrichment," and for "intentional interference with economic relations," as well as costs. The claim is also asking for pre-judgment interest at a rate of seven per cent. WATCH | Premier Holt says she's 'quite confident' in proposed legislation to get N.B. out of contract: New Brunswick wanted to avoid getting sued over travel nurses — but lawsuit now filed 4 hours ago Duration 1:45 In addition, the company is seeking a declaration that its contract is valid and legally binding, and a permanent injunction to prevent Vitalité from soliciting the company's nurses to work directly for the regional health network instead of another travel nurse company it deals with. None of the allegations have been proven in court. Vitalité has not yet filed a response. In an emailed statement Thursday, an unidentified spokesperson for the regional health network said it not been served "with any statement of claim or other originating process before the Court of King's Bench. "We recommend that you contact CHL. We are not in a position to speak to their legal actions or intentions." Canadian Health Labs declined to comment through spokesperson Tom Vernon. No plan for public inquiry The Department of Health did not immediately respond to a request for comment but Premier Susan Holt addressed the lawsuit during her weekly update on U.S. tariffs in Fredericton on Thursday. She called the timing of the lawsuit "interesting" and vowed to fight to defend New Brunswickers against what she called "a bad contract." " I feel quite confident in the legislation that we've put forward. I think it's strong and it will do what we need it to do," she said. "I think our case against CHL is strong. In the face of a bad contract, I don't know how they can defend it, but we're putting the mechanisms in place to protect New Brunswickers." Although the Liberals called for a public inquiry into the travel nurse contracts while in Opposition, Holt said her government has no plans for one "at this point," but they do plan to get to the bottom of how this contract happened. Vitalité's three contracts with the company, which covered from July 2022 to February 2026, totalled $98 million, according to Auditor General Martin. The company charged about $300 an hour per nurse — roughly six times what a local staff nurse earns. While the health system was facing dire staffing shortages in 2022 when the authority signed its first contract with Canadian Health Labs, the deployment of travel nurses in Vitalité's hospitals "did not correlate with staff absences due to COVID-19," Martin found in June. "The contracts with private nursing agencies were not reflective of best practices and did not demonstrate value for money," he said. Terms of the contract According to the statement of claim, the parties entered a contract on Dec. 2, 2022, where the company would supply Vitalité with human health resources to "fill critical staffing gaps" in its hospitals. The contract was slated to end on Feb. 5, 2026, "subject to rights of extension or early termination set out in the contract," the document states. Under the contract, the company was to deploy human health resources in teams, with each team consisting of an agreed upon ratio of registered nurses, licensed practical nurses, and administrative and management staff. The contract required Vitalité to meet certain deployment levels measured in "team days" — a certain number of hours being worked by the collective team per day. Generally, Vitalité was to compensate the company by way of a fixed fee per team day. Vitalité was also responsible for paying Canadian Health Labs' expenses, including travel and boarding costs for the workers, according to the statement of claim. 'Numerous breaches' The company alleges Vitalité committed "numerous breaches." These include that Vitalité has not paid agreed amounts for services, stopped using CHL nurses before the contract expired, and encouraged nurses to leave the company. Vitalité "repeatedly failed" to meet the payment terms and timelines under the contract, according to the court document. "Several invoices" remain unpaid our partially unpaid, it says. "The failure of Vitalité to pay the outstanding amounts constitutes a breach of the terms of the contract, is evidence of bad faith in commercial dealings by Vitalité and results in an unjust enrichment to Vitalité," the company claims. Canadian Health labs also alleges Vitalité underpaid for some services. The company, "in a good faith effort to help resolve some of the issues between the parties regarding its other contractual relationships … temporarily agreed to transfer certain Teams deployed by Vitalité under another contract between the parties to be used under this contract." No details about the other contracts are provided, but the transferred teams had a higher proportion of registered nurses to licensed practical nurses and cost more, yet Vitalité "refused or failed" to compensate the company for the higher-cost teams or correct the ratios. The company contends Vitalité stopped using its nurses on Jan. 30, has indicated it does not intend any further deployments, and refuses to discuss the matter, referring to this as "anticipatory breach of contract." On Jan. 30, Vitalité advised CHL nurses that the contract was being cancelled and that they should seek alternate employment with either Vitalité or another travel agency, This "unauthorized communication" contained "misrepresentations, factual inconsistencies, and confidential and privileged information," according to the statement of claim. It resulted in "significant contractual turmoil" between Canadian Health Labs and its human health resources, significant disruption between CHL and its other logistics support providers, and significant reputational harm, the company contends.
