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Kaiser Settles Employment Class Action for $1.4 Million

Two former call center employees sued the health care giant claiming violations of federal and state wage laws.

SAN DIEGO (CN) — A class of call center staff for Kaiser Foundation Hospitals reached a settlement with the health care giant on claims it consistently failed to accurately pay employees.

Kaiser employed staff in its medical call centers under categories such as “telemedicine specialists,” “customer support specialists,” and “wellness specialists.”

Former call center workers Monica Smith and Erika Sierra sued Kaiser in 2018, claiming violations of the Fair Labor Standards Act (FLSA) and California laws governing wage and time-tracking protocols for employees.

In their class action, Smith and Sierra said Kaiser failed to accurately compensate employees for certain tasks performed during breaks and after their shifts. The tasks included locating work equipment, shredding patient notes, traveling to Kaiser training locations, managing computer stations and commuting to meeting places.

Kaiser also failed to reimburse its staff for certain business-related expenditures, the plaintiffs said.

The parties have previously moved for preliminary approval of a settlement and have since been denied twice. An initial agreement in principle was reached in February 2019.

U.S. District Judge Karen S. Crawford denied the prior motions for preliminary approval due to concerns over the structure of the settlement and the scope of the proposed collective seeking remedy of FLSA claims.

In October 2020, the parties filed amendments and corrections to the proposed settlement and filed a third motion for preliminary approval, which the court granted.

The settlement class includes employees who worked in Kaiser call centers in San Diego between Feb. 21, 2013, and Feb. 18, 2021, while the FLSA collective includes employees who worked in Kaiser call centers in San Diego between Dec. 21, 2014, and Feb. 18, 2021

At a June 9 fairness hearing held by Crawford, no class members filed objections to the settlement or appeared at the hearing. Six of the 474 class and FLSA collective members requested to be excluded from the settlement.

The agreement received final approval Tuesday by Crawford and will provide a gross settlement of $1,475,000 which, after relevant fees are deducted, will amount to a $922,000 payment to class members. Class members will receive an average payment of $1,971 with the highest payment being $5,894.

Named plaintiffs Smith and Sierra will receive $7,500 and $2,500 incentive awards, respectively, while opt-in plaintiff Christa Fox will receive $5,000.

The parties have allocated $203,000 of the net settlement to the FLSA collective members. 

Attorneys for the parties did not immediately respond to emailed requests for comment on the settlement.

In exchange for the settlement payment, class members agree to release Kaiser of any and all claims related to their lawsuit.

Crawford wrote in the June 15 order that the settlement satisfied the four threshold requirements of numerosity, commonality, typicality, and adequacy of representation.

“The court finds that the proposed class representatives and their counsel have vigorously prosecuted this action, leading ultimately to the settlement now before it, and have faithfully discharged their duties as fiduciaries to the absent class members,” Crawford wrote. “The court finds no evidence of collusion or antagonism. Furthermore, counsel for the class is experienced in employment litigation, and has successfully litigated numerous wage-and hour class actions such as this one.”

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