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Judge Approves $4.5M Settlement in Cerner Overtime Claims Case

A federal judge gave final approval earlier this month to the $4.5 million settlement in the class-action lawsuit on Cerner overtime compensation.

cerner overtime class action lawsuit

Source: Thinkstock

By Elizabeth Snell

- U.S. District Judge Fernando J. Gaitan Jr. approved the $4.5 million settlement in the Cerner overtime compensation class-action lawsuit on June 11, according to Missouri Lawyers Weekly. Cerner first agreed to the settlement in April.

The lawsuit claimed that Cerner violated the Fair Labor Standards Act (FLSA) by failing to properly calculate and pay overtime to salaried, non-exempt employees.

Lead plaintiffs Fred Speer and Mike McGuirk alleged that the health IT company paid non-exempt employees overtime wages a full pay period late and “systematically miscalculated overtime wages.”

“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,” the case read.

“Plaintiffs further assert that defendant’s payroll and human resource records, together with plaintiffs’ allegations and supporting testimony, establish that defendant’s nonexempt employees were subjected to similar policies and circumstances sufficient to satisfy the lenient threshold for conditional certification of a collective action.”

Cerner said that the plaintiffs had not filed written consents to join a collective action when the motion was filed, in which case they would not be considered part of a collective action claim.

Additionally, Cerner stated that the plaintiffs had missed the two-year window to file an FLSA claim.

“Given that the statute of limitations has expired for plaintiffs’ ordinary claims, their motion for conditional certification should be denied absent proof that Cerner willfully violated FLSA,” the case said.

However, the plaintiffs stressed that willful violation proof is not necessary at the conditional stage because district courts previously found that a three-year certification is appropriate when the dispute concerns whether willful violations occurred.

“Whether a violation is willful is an issue of fact, often addressed during summary judgment or at trial,” the document read, citing a previous case. “In addition, judicial economy is served by conditionally certifying a larger, more inclusive class, at this stage in the proceedings. Accordingly, the statute of limitations is a three-year period.”

Cerner denied any wrongdoing but agreed to the settlement to avoid expenses and litigation uncertainties, the settlement said.

Earlier this year, the Supreme Court ruled 5-4 in favor of Epic Systems in a labor law case that could potentially impact workers filing class action lawsuits collectively against their employers.

Epic technical writer Jacob Lewis claimed that the health IT company did not properly compensate him and other technical writers for overtime pay. Epic employees must consent to resolve individual wage and working hours claims through individual arbitration.

When individuals agree to work at Epic, they consent to losing the ability to pursue work-related claims through class or collective action, according to the Epic arbitration agreement.

The National Labor Relations Act (NLRA) quickly took center stage in the case, as the law allows employers to waive employees’ rights to pursue claims in a class action or collective action lawsuit in arbitration agreements.

“Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration?” Justice Neil Gorsuch wrote in the majority opinion. “Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?”

The majority opinion stated that the arbitration agreement stands, and that the NLRA “secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum.”

“Far from conflicting, the Arbitration Act and the NLRA have long enjoyed separate spheres of influence and neither permits this Court to declare the parties’ agreements unlawful,” Gorsuch added.

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