SAN FRANCISCO (CN) — Tyler Technologies, a software vendor with a rapidly expanding empire, will pay $3 million to settle claims that it doesn’t properly pay its employees.
The agreement arises from a federal class action filed by Aaron Kudatsky in November 2019. Kudatsky worked for Tyler from July 2016 to March 2019 as an “implementation consultant,” meaning he would travel around to courts to roll out new case management software and show the clerks how to configure and use it on their computers. He had to remain on-site until the training sessions were complete, and later provide remote assistance with setting up applications and basic troubleshooting.
Kudatsky earned an annual salary of roughly $50,000 plus incentive pay of between $30 and $120 per day, but said he would work well over 40 hours per week without overtime pay. He also said Tyler failed to provide him with accurate, itemized wage statements. His lawyers estimated a total classwide wage loss of $3.8 million.
In May 2020, U.S. District Judge William Alsup conditionally certified a class of implementation consultants and coordinators who have worked for Tyler Technologies since May 15, 2017. A year later, after two rounds of mediation, the parties announced that they had reached a settlement.
The $3.15 million settlement, approved by Alsup last week, will deliver $2.4 million to 294 employees who will receive payments ranging from $200 to over $10,000. The rest will go to litigation expenses and attorneys’ fees. The settlement did not require Tyler to make any changes to its employment practices.
Tyler had previously tried to get the case tossed on summary judgment, arguing that implementation consultants like Kudatsky were classified as exempt from overtime.
“While Tyler Technologies is confident the employees involved were properly classified, it was in the best interest of our company to resolve this issue without the additional cost and uncertainty of further litigation,” a company spokesperson told Courthouse News in an email.
The settlement represents a fraction of the earnings of a company quickly becoming the premier provider of software services for courts, law enforcement, education and local government.
Based in Plano, Texas, Tyler Technologies is a dominant contender for public-sector contracts, raking in over $1 billion in revenue in 2019, according to that year’s annual report. Its website boasts “more than 21,000 successful installations across 10,000 sites, with clients in all 50 states, Canada, the Caribbean, Australia and other international locations.”
Tyler’s tech domain stretches across the country, from Maine, where it charges the local courts a whopping $200,000 per year to access their records, to California, where the company has negotiated multimillion-dollar deals with state courts in 28 out of 58 counties to install Odyssey, its signature cloud-based case management software.
Since 1998, it’s been busy buying up smaller competitors all over the country, most recently the Kansas-based software provider NIC Inc., acquired in April for $2.3 billion — likely the largest government software deal ever.
According to GovTech, which has reported a string of previous buyouts prior to the NIC deal, Tyler's spending spree really ramped up in 2018 with the $9.3 million purchase of probation case management system maker CaseloadPRO. It also bought public safety software provider MobileEyes for $5.3 million, cybersecurity provider Sage Data Security for $11.6 million, and cloud-based open government data platform Socrata for $147.6 million.
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