United States District Court, W.D. Missouri, Western Division
FRED SPEER and MIKE MCGUIRK, individually and on behalf of a class of all others similarly situated, Plaintiffs,
CERNER CORPORATION, Defendant.
Fernando J. Gaitan, Jr. United States District Judge.
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).
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), 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, ¶
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.
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.
Statement of Facts
Facts Specific to Wellness Incentive
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).
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
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. (BogoradDepo., Doc. No.
143-1, at 14:2-24).
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.
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).
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)).
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.
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.
Facts Specific to Standing
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.
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.
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;
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).
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.”
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.
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 ...