Cerner Agrees To Overtime Settlement But Wants Deal Kept Secret
After more than three years of litigation, Cerner Corp. is settling a class action lawsuit alleging it improperly failed to pay hundreds of employees overtime wages.
The terms of the settlement, however, may not see the light of day. Earlier this week, Cerner asked the court for permission to file the settlement agreement under seal, a motion unopposed by the plaintiffs.
In its motion, Cerner “adamantly denies” any wrongdoing but says it’s settling to avoid the expense, disruption and “negative public attention” of continuing litigation.
“Accordingly, Cerner determined that settlement was in its best interest, provided that plaintiff agreed not to prevent Cerner from taking certain steps to try and ensure that the terms of the settlement are not part of the public record,” Cerner wrote in its motion.
A spokesman for Cerner said he could not comment on the settlement. Eric Dirks, an attorney for the plaintiffs, likewise said he could not comment.
The case was filed in 2015 by Cerner employee Laura Scott and alleged that Cerner improperly exempted so-called delivery consultants and system analysts from overtime pay.
In her complaint, Scott contended the jobs were actually entry level positions that required no background in systems analysis, software engineering or computer programming.
In March 2017, a Jackson Count judge certified the case as a class action, substantially increasing Cerner’s exposure if were found liable.
The case has been hard-fought, with more than three dozen depositions taken, extensive discovery and the production of hundreds of thousands of pages of data and documents, according to Cerner’s motion. After spending a full day in mediation, the company said, the parties agreed to settle.
Cerner, which is based in North Kansas City, is one of the world’s biggest developers and providers of electronic health records. The company has 26,000 employees worldwide, including roughly 13,000 in the Kansas City area. Last year it earned nearly $867 million after taxes on gross revenues of more than $5.1 billion.
Cerner recently landed a 10-year, $10 billion contract to update the U.S. Department of Veterans Affairs’ electronic health record system.
The Scott case is one of several that have been filed against Cerner about its overtime policies. Four cases filed in federal court were settled on undisclosed terms, as was another filed in Cass County Circuit Court that was settled earlier this year. Most of the cases involved the same attorneys on both sides.
Like the lawsuits brought by Scott, the cases alleged that Cerner misclassified employees in order to avoid paying them overtime. The Cass County action, for example, alleged that Cerner violated Missouri’s minimum wage law by denying overtime payments to employees it describes as learning consultants.
In seeking to maintain the confidentiality of the settlement, Cerner filed a motion in Cass County that’s nearly identical to the one it filed in the Scott case. Among other contentions, both motions assert that public disclosure of the settlement terms would encourage groundless copycat litigation by plaintiffs seeking to extract similar settlements.
Although judges routinely grant such confidentiality requests in wage-and-hour cases, they don’t always do so. Last year, for example, a federal judge in New York refused to seal a proposed settlement between a clothing designer and an employee who alleged she was not paid overtime.
The case was brought under the Fair Labor Standards Act, and the judge ruled that the public had a right to know about a settlement under a law intended to advance workers’ knowledge of their rights.
And judges on the 2nd U.S. Circuit Court of Appeals have routinely denied requests to seal settlement agreements between employers and their employees.
Pat Stueve, a Kansas City attorney who specializes in class action litigation but was not involved in the Cerner cases, said the settlement in the Scott case would typically require court approval under Missouri court rules governing class-action lawsuits.
“And in those circumstances,” Stueve said, “it is unusual for a court to allow the settlement to be filed under seal unless there is a showing of special circumstances.”
Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies