Missouri-based EHR vendor Cerner will pay $4.5M to settle a three year long class-action lawsuit regarding overtime wages. The EHR giant allegedly misclassified some employees and did not pay them overtime salaries. The employees charged Cerner that the company has not been paying the overtime pays. The lawsuit spent 3 years in court before the settlement.
The settlement which Cerner agreed to in April, was approved by Fernando J. Gaitan, Jr., U.S. District Judge for the Western District of Missouri.
Cerner denies any kind of wrongdoing and says that the company has agreed to the settlement to avoid negative public attention and the expense of current lawsuit.
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This case was filed back in 2014 when the company was alleged to have violated the Fair Labor Standards Act. According to the lawsuit, the petitioners Mike McGuirk and Fred Speer said that Cerner used “an unlawful company-wide payroll processing system,” and with that processing system “defendant allegedly (1) paid its nonexempt employees’ overtime wages a full pay period late; and (2) systematically miscalculated overtime wages by failing to include all remuneration into nonexempt employees’ regular rate of pay.”
The suit also stated that “Additionally, plaintiff alleges that defendant unlawfully paid plaintiffs and hundreds of other non-exempt employees using the ‘fluctuating workweek’ method of pay, even though those individuals were not paid a fixed salary because they received varying amounts of pay to perform other job functions such as on-call work.”
After the petition was filed, Cerner asked the court that the case should be dismissed immediately on the basis of the following reasons: “(1) named plaintiffs had not filed written consents to join the litigation at the time of filing the motion; (2) the statute of limitations bars named plaintiffs’ two-year FLSA claims; (3) the classes plaintiffs seek to certify are overbroad and the policies identified by plaintiffs do not violate the FLSA; (4) the Court should apply a heightened standard of proof rather than the typical lenient standard; and (5) plaintiffs have not demonstrated that other potential class members have an interest in proceeding with a collective action.”
According to the case, the Cerner employees are hired into three different groups:
- Salaried exempt
- Hourly non-exempt
- Salaried non-exempt
The company hired salary nonexempt workers in above 120 different business units, in 18 states across the country, with hourly non-exempt staff already working in over 200 business units across 32 states, by February 2015.
The petitioners, Speer and McGuirk were working at Cerner’s Columbia, Missouri-based ITWorks division, with the roles of salary non-exempt.
Epic, the electronic health record system vendor recently faced a major labor law case. It was asked that whether the National Labor Relations Act allowed for combined redress in arbitration situations. The case also centered on overtime wages and employment classification.
U.S Supreme Court, on May 21, handed its 5-4 decision on Epic v. Lewis, ruling that companies can require employment and wage disagreements to be hashed out individually, and not permit employees to collectively bring class action litigations against their employers.
