Electronic health record company Cerner has agreed to settle a three-year overtime lawsuit, offering a class of plaintiffs around $4.5 million in financial compensation, KCUR reports.
Cerner Settles Software Employee Overtime Class Action
Cerner intends to jealously guard the terms of the settlement, having requested court permission to file the settlement agreement under seal. In asking for the settlement to remain confidential, Cerner says it’s trying to combat frivolous follow-on lawsuits.
While the Kansas City, Missouri-based EHR giant “adamently denies” having committed any overtime violations, settlement was the best option, a spokesperson said, to avoid the considerable expense, time and “negative public attention” of litigation. The motion to seal the settlement was entered unopposed by the plaintiffs, who worked as so-called delivery consultants and systems analysts for Cerner.
Cerner employs around 13,000 people in the Kansas City area, making it the region’s largest non-governmental employer. Worldwide, the company has 26,000 employees. One of the world’s largest developers of electronic health record platforms, Cerner in May secured a $10 billion contract to revamp the Veterans Affairs Department’s electronic health records.
Employees Claim Fraudulent Pay Practices
In their initial lawsuit, filed in 2015, Cerner employees Fred Speer and Mike McGuirk said they and their colleagues had been the victims of a complex scheme to short change them on overtime. Cerner was accused of operating “an unlawful company-wide payroll processing system,” according to Becker’s Hospital Review.
Under the scheme, Speer and McGuirk said, Cerner would roll over payments a full pay period late, making their overtime calculations incorrect. The company also paid employees who made varying amounts on a “fluctuating workweek” schedule.
Federal Law On Overtime
A hard-fought legal battle ensued, as discovery stretched over the course of years. The case gained class certification, allowing Speer and McGuirk to represent the interests of similarly-situated employees, in March 2016. Cerner agreed to the settlement after one day in mediation.
Federal law requires employers to pay employees overtime wages for all hours worked beyond 40 in a single week. In most cases, employees are entitled to overtime pay at a 1.5-times their regular rate of pay. The law covers the vast majority of American workers, but significant exemptions exist for highly-paid professionals and educated specialists.
Other Lawsuits Accuse Cerner Of Overtime Violations
Five similar lawsuits have been filed against Cerner in recent years; most have been filed in the US District Court for the Western District of Missouri. All five were settled pre-trial for undisclosed amounts, including a case filed in state court claiming that Cerner had violated Missouri’s minimum wage orders by underpaying so-called “learning consultants.”
In a separate class action, another employee accused Cerner of improperly classifying her and numerous other workers as exempt from overtime pay under the Fair Labor Standards Act. The company, she claimed, sold its “system analyst” positions as specialized work requiring background knowledge in software engineering and systems analysis to take advantage of the federal overtime law’s “learned professional” exemption.
In reality, the plaintiff wrote, the jobs advertised were basic entry-level positions that required no “learning” on the part of employees.