Most Cerner employees are giving up the right to sue — to stay eligible for merit raises

Cerner says it prefers arbitration over court cases.
Cerner says it prefers arbitration over court cases.

The overwhelming majority of Cerner Corp.’s 17,000 U.S. employees have decided to give up their right to sue the company over labor matters, in exchange for remaining eligible to receive merit pay raises.

Cerner, the medical records software giant based in Kansas City, put the unusual choice to its workers just before Thanksgiving, and the company said Thursday that 93 percent of them had signed on so far.

Cerner has faced some suits alleging that it did not pay overtime to employees who were eligible for it. Lawsuits like those would be barred for employees who accept the new agreement, under which they agree to take legal complaints to arbitration instead.

A Cerner spokesman, Dan Smith, said the company preferred arbitration because it was faster, cheaper and more confidential than the courts. He also emphasized that the agreement was voluntary and that there was no deadline for employees to decide whether to accept it.

Those who don’t accept are no longer eligible for what Cerner calls performance-based raises, Smith said. But they still could get raises by being promoted, he said.

Smith did note the agreement had included a $500 bonus in Cerner stock options for employees who signed up before Tuesday. But that was the only part of the deal with any time limit on it.

Smith also said Cerner and its clients used arbitration rather than litigation to settle disputes, and that Cerner’s record in defending against lawsuits was “quite strong.”

Mike Hodgson, a local attorney who specializes in class- and collective-action suits on behalf of workers, disputed Cerner’s assertions about arbitration. Hodgson said he has had arbitration cases that were more costly than going to court and had taken years to settle.

Hodgson is not part of any actions against Cerner but said he had seen the agreement the company was offering. He said he wasn’t familiar with any other company that linked its arbitration agreement to eligibility for raises.

Hodgson also said the courts tended to steer clear of challenges to such arbitration accords, but the National Labor Relations Board had held that some of them violated labor law and thus weren’t legally binding.

One official at the labor board’s Overland Park office, Naomi Stuart, said Thursday that arbitration agreements were common but could run afoul of the law if they weren’t voluntary or if they were so broad as to bar group actions by employees. She hadn’t seen the Cerner agreement.

Greg Hack: 816-234-4439, @GregHack