A major Kansas City company is giving its employees an ultimatum.
Cerner Corporation, a multi-billion dollar health information technology business with offices in more than 30 countries, wants its American workers to sign a controversial agreement.
Company leaders sent a form to each of their nearly 17,000 U.S. workers, asking them to agree not to pursue any type of court case against Cerner. Multiple attorneys have received numerous complaints from Cerner employees about it.
RELATED Cornered by arbitration: Cerner is not the only company using this tactic to limit lawsuits
The move comes as Cerner is facing two class action lawsuits in Missouri state court. Those suits are from employees claiming they are eligible for overtime, but aren't getting it. Two other similar cases are in the settlement stage in federal court.
RELATED:
- Young v. Cerner
- Class action lawsuit filed against Cerner Corp. (press release)
The ultimatum
The arbitration agreement company leaders want their employees to sign would prevent workers from being involved in any future class action lawsuits against Cerner.
In company e-mails and text messages 41 Action News exclusively obtained, company leaders say any employees who don't sign the arbitration agreement won't be eligible for merit pay raises.
"I think it's an attempt by the company to limit its exposure in a couple of ongoing lawsuits and for future purposes," said Mike Hodgson, a labor attorney.
As a further enticement to sign, company leaders offered employees $500 in stock options if they signed before Tuesday, Dec. 8.
Hodgson says the merit pay provision could be a reason to challenge the legality of the agreement in court.
"Hammer and carrot sort of effect that if you sign, here's your carrot and if you don't sign it, we're going to hit you with a hammer," he said.
What arbitration means
A Cerner employee who didn't wish to be identified calls the move "underhanded." The employee says if the workers don't sign, the message is, "you have no future with the company."
"I think that's a very valid perception," said Hodgson.
Hodgson says one key provision of arbitration is it stops employees from pooling their resources to push for company-wide change. Under arbitration, any complaints against the company could only be brought by individuals.
However, Cerner spokesman Dan Smith told 41 Action News it's up to the employees to decide whether or not to sign the agreement. He says although employees who don't sign can't get merit pay, they can still be promoted and get raises that way.
Hodgson doubts employees who aren't getting merit pay raises would get promotions. Smith pointed out even the employees who sign the deal aren't guaranteed merit raises, they must be earned.
Cerner cites arbitration advantages
Smith said arbitration benefits both the employees and company because a third party will settle the dispute more quickly than court at less expense. Unlike a lawsuit, arbitration takes place out of the public eye.
Hodgson disputes the advantages Smith points to, saying he has a current arbitration case that is unresolved after four years.
"Arbitration is inherently more expensive than the court system," Hodgson said.
But he does say arbitration, due to its privacy provision, can protect Cerner from bad publicity.
"It would be difficult for a media source to necessarily pick up on it," Hodgson said.
For those who signed...
If all U.S. Cerner employees signed the arbitration agreement before Tuesday, it would cost Cerner less than $8.4 million in stock options, which can't be used for two years. And the stock prices would have to increase for employees to make any money.
Cerner stock has generally risen over time, including in the last two-year period.
By contrast, the company's website says Cerner did a record $1.59 billion in business in 2015's third quarter alone, up 44 percent from last year's third quarter.
"My general impression is that this is just a drop in the bucket of what it would save Cerner if everybody was able to execute this arbitration agreement," Hodgson said.
MORE ABOUT CERNER
- Founded 1979
- World headquarters in North Kansas City, Mo.
- 22,000 employees worldwide (17,000 in the U.S.)
