Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Speer v. Cerner Corp.

United States District Court, W.D. Missouri, Western Division

September 26, 2016

FRED SPEER and MIKE MCGUIRK, individually and on behalf of a class of all others similarly situated, Plaintiffs,


          Fernando J. Gaitan, Jr. United States District Judge.

         Pending before the Court are (1) Cerner Corporation's Motion for Partial Judgment on the Pleadings on Plaintiffs' Claim that Cerner Violated the FLSA in Using the Fluctuating Workweek Computation (Doc. No. 103); (2) Cerner Corporation's Motion for Partial Summary Judgment on Plaintiffs' Claim the Wellness Incentive Was Not Exempt from the Regular Rate (Doc. No. 105); and (3) Cerner Corporation's Motion for Partial Summary Judgment Regarding Claims Based on Pay Types not Paid to Plaintiffs (Doc. No. 141).

         I. Background

         Plaintiffs, Frederic Speer and Michael McGuirk, individually and on behalf of themselves and others similarly situated, bring a two-count complaint against Defendant, Cerner Corporation (“Cerner”), alleging that Defendant violated the Fair Labor Standards Act (“FLSA” or “Act”) and the Missouri Minimum Wage Law (“MMWL”). Cerner employed both Plaintiffs, Speer and McGuirk, as Service Center Analysists/System Support Analysts (“Desktop Support Staff”) at its operation, Tiger Institute for Health Innovation in Columbia, Missouri. In their Complaint, Plaintiffs allege that Cerner improperly calculated their overtime compensation by using a fluctuating workweek (“FWW”) method, which contemplates dividing employees' fixed earnings by the number of hours they worked in a given week to arrive at a regular rate and then adding one-half time (50%) of the regular rate as overtime for all hours over forty. According to Plaintiffs, because they received payments in addition to their fixed salary (on-call bonuses and wellness incentive[1]), these payments invalidated the FWW method, thus entitling Plaintiffs to the statutorily prescribed default overtime rate of one-and-one-half times (150%) of their regular hourly rate. Plaintiffs also complain that Cerner failed to include all remuneration when calculating the regular rate of pay for its employees, and such failure resulted in overtime compensation of less than even the reduced FWW one-half (50%) overtime compensation rate. Furthermore, according to Plaintiffs, even this inadequate overtime compensation was systematically paid late. Plaintiffs claim that as a result of these violations Cerner denied them, as FLSA non-exempt employees, proper and timely overtime pay in violation of FLSA. Doc. No. 39, ¶ 23.

         Cerner has filed a Motion claiming that it is entitled to a partial judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure, because it properly computed Plaintiffs' overtime pay using the FWW method. See Doc. No. 103. Defendant also filed a separate Motion for a partial summary judgment, asserting that Plaintiffs' claims with respect to the wellness incentive are barred due to the expiration of the statute of limitations and because the wellness incentive is exempt from being considered remuneration under the law. Doc. Nos. 105, 106. Defendant later filed another motion for partial summary judgment, arguing the named plaintiffs do not have standing to bring claims on behalf of class members for types of pay not received by the named plaintiffs. Doc. No. 141.

         On March 30, 2016, the Court granted plaintiffs' motion for conditional certification of a collective action in part. See Doc. No. 165. Specifically, the Court found that plaintiffs met the burden for conditional certification as to “Late Payment of Overtime” and “Miscalculated Overtime” classes. The “Late Payment of Overtime” class includes “all nonexempt persons employed by Defendant in the U.S.” from September 7, 2012 to the present, “whose overtime compensation was not paid on the next regular payday for the period in which the overtime work was performed.” The “Miscalculated Overtime” class includes all those from September 7, 2012 to the present whose overtime compensation was calculated based on a regular rate of pay that excluded additional remuneration. See Doc. No. 165, Doc. No. 180-1.

         II. Statement of Facts

         A. Facts Specific to Wellness Incentive

         Plaintiffs allege they received “remuneration” in addition to their salaries and that such remuneration was not exempt from inclusion in the regular rate of pay “under any applicable FLSA statutory exception.” Plaintiffs claim that “their own overtime excluded their on-call pay and wellness bonuses, ” and that the “supporting declaration testimony” of opt-in Scott Sexton provides that he received “additional remuneration for on-call work.” (Amended Motion for Conditional Certification (Doc. No. 97), p. 13, citing “SOF at ¶¶ B. 10-12”). The Declaration of Opt-in plaintiff Wyatt Thorpe does not contend that he received any form of additional remuneration. (Id., Ex. 7).

         Cerner offers its employees a health-benefits plan called the Healthe Options Component Plan (the “Health Insurance Plan”). Cerner offers the Healthe Living with Rewards Program (the “Rewards Program”) to employees who participate in Cerner's Health Insurance Plan. Participation in the Rewards Program is voluntary; however, the timing and amount of the wellness incentive payments are non-discretionary.

         Defendant asserts that the Rewards Program is intended to encourage employees to make health conscious decisions by offering a reduction of premiums paid in the form of a rebate applied to the following year's premiums. Defendant's representative, however, testified the goals of Cerner's wellness programs, which include the wellness incentive, also include increasing employees' productivity, improving attendance, decreasing the use of sick leave, and decreasing Cerner's health care costs. (Bogorad[2]Depo., Doc. No. 143-1, at 14:2-24).

         Defendant attempts to characterize the wellness incentive as an opportunity for eligible participants to reduce their health-benefit premiums for the subsequent year. However, in response to the motion for summary judgment, plaintiffs argue that the wellness incentive does not reduce employees' health care premiums, as the same premium amount is charged regardless of whether an employee earns a wellness incentive. (Bogorad Depo., Doc. No. 143-1, 41:21-42:5, 66:20-24; Fred Speer's Pay Records, Doc. No. 144, Ex. 11). Instead, Cerner takes the full premium from the employee's paycheck, remits it to The Health Exchange, Inc., and then Cerner separately pays the employee a wellness incentive. (Bogorad Depo., Doc. No. 143-1, 41:21-42:5, 66:20-24). The employees must remain employed throughout the subsequent year to receive the full benefit of the wellness incentive.

         In its summary judgment motion, defendant characterizes a “reward” under the Rewards Program as the earning of rebates for premiums paid to the employee's health insurance in the next plan year. See Bogorad Decl., Doc. No. 106-1 at ¶ 13. However, as noted by plaintiffs in response, the word “rebate” appears nowhere in Cerner's 200 pages of plan documents and descriptive literature, which were all drafted by Ms. Bogorad's department prior to the filing of this lawsuit and which Ms. Bogorad approved for accuracy. (Bogorad Depo., Doc. No. 143-1, at 33:6-34:8, 34:9-22). “Rebate” is not a word Ms. Bogorad and her department use to describe the wellness incentive. (Bogorad Depo., Doc. No. 143-1, at 33:25-34:8). Instead, the word “rebate” was first used by attorneys when they drafted her declaration in this case, and at that time she began to refer to the wellness incentive as a “rebate.” (Bogorad Depo., Doc. No. 143-1, at 26:10-28:20, 34:23-35:20).

         Similarly, defendants characterize the wellness incentive payments as a return to the employee of money the employee paid toward Health Insurance Plan premiums. (Bogorad Decl., Doc. No. 106-1 at ¶ 16). Plaintiffs note in response, however, that employees' health insurance premiums are maintained by a separate corporation called The Health Exchange, Inc., which administers Cerner's health insurance plan. (Bogorad Depo., Doc. No. 143-1, at 11:11-12:11). The Health Exchange, Inc. receives the employees' insurance premiums and maintains them in a bank account separate from and not comingled with Cerner Corporation funds. (Bogorad Depo., Doc. No. 143-1, at 12:15-19, 66:20-24, 13:16-14:1). Cerner, therefore, is unable to return plaintiff's insurance premium dollars from this separately maintained insurance plan; instead, plaintiffs argue that defendant pays the wellness incentive itself, which is reflected on pay stubs as additional compensation added to gross wages. (See Bogorad Depo., Doc. No. 143-1, at 66:20-24; Fred Speer's Pay Records, Exh. 11 (filed under seal)).

         Defendant further asserts that a Rewards Program participant's wellness incentive rebate has no relation to hours worked or the quality of an employees' work, performance ratings, attendance, or any other factors related to the individual's job with Cerner. However, as noted by plaintiffs, in order to receive the full wellness incentive payment earned in year one, an employee must continue his or her employment throughout the entirety of year two.

         Plaintiff Frederic Speer has not received a wellness incentive payment since his paycheck dated May 25, 2012. Plaintiff Mike McGuirk has not received a wellness incentive payment based on his participation in the Rewards Program, if at all, since prior to January 7, 2011.

         B. Facts Specific to Standing

         Named plaintiffs Fred Speer and Mike McGuirk claim that they received ITWorks on-call pay and a wellness incentive that were not included when calculating their regular rate of pay. Opt-in Scott Sexton claims that he also received ITWorks on-call pay that was not included when calculating his regular rate of pay.

         At the January 14, 2016 deposition of Cerner's Rule 30(b)(6) corporate representative, Cerner provided lists of pay types paid to non-exempt employees at some point from March 5, 2012, to August 31, 2015. (Richardson Dep. at Exs. 5-7). Cerner, however, can only identify two types of additional compensation included in its overtime calculations prior to plaintiffs filing this lawsuit: commissions and performance pay plan compensation. Notably, at some time after the filing of this lawsuit, it appears that Cerner begin including previously excluded pay types (such as on-call pay) in its regular rate of compensation and created new pay types that were not previously used.

         Defendant argues that determining whether a certain type of additional compensation should be included or excluded from the regular-rate calculation is a multi-factorial analysis and is done on a pay-type by pay-type basis. (Richardson Dep. at 57:23-25; 134:14-136:6). However, Cerner's corporate representative testified at the deposition that this is just its process today and it “does not know” and can “only speculate” about the process and what factors were considered prior to Plaintiffs filing this lawsuit. (Richardson Depo., Exh. 7, 134:10-21, 136:7-23, 143:10-21, 201:22-202:15). Cerner also testified there are not individual policies for including or excluding each type of pay when calculating overtime, and, instead, it is necessary to look “at the overall calculation” in PeopleSoft to determine what additional compensation Cerner's calculation included or excluded from regular rate calculations. (Richardson Depo., Exh. 7, at 226:2-227:3; 228:21-230:10).

         III. Standard

         A party may file a Motion for a judgment on the pleadings “after the pleadings are closed but early enough not to delay trial.” Fed.R.Civ.P. 12(c). In determining whether to grant a motion for judgment on the pleadings the Court uses the same standard as for the motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Saterdalen v. Spencer, 725 F.3d 838, 840-41 (8th Cir. 2013). To survive a Rule 12(b)(6) motion to dismiss, “the complaint must do more than recite the bare elements of a cause of action.” Williams v. City of Kansas City, Mo., No. 4:13-0347-CV- W-DGK, 2014 WL 2158998, at *3 (W.D. Mo. May 23, 2014) (citing Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009)). The complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         Under Rule 12(c) of the Federal Rules of Civil Procedure, the court “accept[s] as true all factual allegations set out in the complaint” and “construe[s] the complaint in the light most favorable to the plaintiff[s] drawing all inferences in [their] favor.” Ashley Cty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009) (internal quotation marks and citations omitted). “Judgment on the pleadings is appropriate only when there is no dispute as to any material facts and the moving party is entitled to judgment as a matter of law.” Id.

         Summary judgment is appropriate if the movant demonstrates that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). The facts and inferences are viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-90 (1986). The moving party must carry the burden of establishing both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law. Matsushita, 475 U.S. at 586-90.

         A nonmoving party must establish more than “the mere existence of a scintilla of evidence” in support of its position. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

The nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts, and must come forward with specific facts showing that there is a genuine issue for trial. Where the record taken as a whole could not lead a rational trier of fact to ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.