Cerner Corp. employees who claim the health care information giant improperly calculated their overtime payments overcame a legal hurdle this week, allowing their two-year-old lawsuit to move ahead.
A federal judge conditionally certified the workers as a class, grouping them together after finding that they were “similarly situated” under the Fair Labor Standards Act (FLSA). That will allow them to proceed collectively, increasing the possibility of a large damage award if the case goes to trial.
The 21-page order by U.S. District Court Judge Fernando Gaitan Jr. is not a ruling on the merits of the employees’ claims, but it sets the stage for a possible legal showdown over Cerner’s overtime practices.
According to the lawsuit, the Kansas City-based company pays nonexempt employees – employees who must be paid overtime for any hours worked beyond 40 each week – a full pay period late and fails to include all additional compensation in their regular rate of pay.
The case is a so-called collective action under the FLSA, similar to a class action with a couple of major differences. Unlike a class action, where plaintiffs who meet the class definition are automatically included in the class unless they opt out, in collective actions plaintiffs must actively opt in.
In addition, the legal standard for certifying a class in a collective action is much more lenient than the one employed in a class action. As such, Gaitan’s ruling did not come as a big surprise. But a lawyer for the employees said it was a step forward.
“I think this order is significant in that it might get Cerner to actually take some responsibility, but it’s not a surprising ruling,” said the lawyer, Tracey George.
“It’s 100 percent consistent with the law; it’s what we expected and the court got it right. It’s more significant to us in getting Cerner to come around and realize that there are consequences for trying to save money and take that from your employees’ pocket.”
Cerner did not respond to a request for comment.
Gaitan issued his ruling several months after Cerner asked its nearly 17,000 workers in the United States to agree to submit labor disputes to arbitration rather than sue it in court. Workers who didn’t agree are not eligible for performance-based raises. The vast majority of employees, faced with that prospect, signed the agreement.
The agreement, however, won’t affect the lawsuit, since it was filed before workers signed the agreement.
In his ruling, Gaitan said that between 650 and 850 Cerner employees had been paid as salary nonexempt workers over the period covered by the case. George, however, said that, taking into account employee turnover and additional information discovered in the case, the figure is probably closer to 3,000 workers.
Gaitan’s ruling stands in contrast to one handed down in another overtime case against Cerner in 2007. The plaintiffs in that case sought to recover overtime on behalf of 4,500 “staff associates” who were treated by Cerner as exempt from overtime pay.
Gaitan’s colleague, U.S. District Judge Nanette Laughrey, found that the plaintiffs had failed to meet “even their lenient burden to establish that these fellow employees are similarly situated to their own jobs as business analysts and software engineers.”
Another overtime suit against Cerner in federal court was settled last year on undisclosed terms. The settlement agreement was sealed.
Two other cases, both class actions alleging overtime violations, are pending in Jackson County and Cass County circuit courts. Both allege that Cerner improperly classified workers as exempt.
Dan Margolies, editor of the Heartland Health Monitor team, is based at KCUR. You can reach him on Twitter @DanMargolies.