Legal, Hospitals

Kaiser Permanente to shell out nearly $19M to settle discrimination lawsuits 

The California-based health system agreed to settle two lawsuits alleging unfair practices that resulted in Black and Hispanic workers being paid less and receiving fewer promotions than their white counterparts. In total, Kaiser Permanente agreed to pay $18.9 million as part of the settlements.

Kaiser Permanente has agreed to settle two race discrimination lawsuits with a total payout of $18.9 million.

The lawsuits alleged that the Oakland, California-based health system did not pay their Black and Hispanic employees as much as their white workers. They also claimed Kaiser has unfair hiring and promotion practices that have held their workers of color back.

Though Kaiser disputes “various elements” of the lawsuits, it is saddened to learn that employees feel discriminated against and “recognize[s] the importance of listening and learning from our employees,” said Christian Meisner, the health system’s senior vice president and chief human resources officer, in an email.

“To that end, we have chosen to work cooperatively with plaintiff groups to settle two class-action cases on negotiated terms,” he said.

Meisner did not clarify which parts of the lawsuits the health system disputes.

In the first — a class-action suit that covers approximately 2,225 Black employees — Kaiser will pay $11.5 million. The plaintiffs worked at several Kaiser Permanente entities, including Kaiser Foundation Hospitals and Southern California Permanente Medical Group, serving in administrative support and consulting services roles.

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The lawsuit alleged that Kaiser Permanente’s pay and promotion policies resulted in Black employees being underpaid and under-promoted as compared to their counterparts from other racial backgrounds. The suit has been ongoing since 2018. Following mediation in December, the parties agreed to settle.

In the second lawsuit, Kaiser Permanente agreed to pay $7.4 million. The class-action national origin discrimination suit was brought by Michael Cuenca, a Hispanic employee who worked for the health system for a decade.

Since 2016, the health system has paid their Hispanic workers less than employees of other races and national origins for doing similar work, the lawsuit claimed. The wage disparity was especially prominent in comparison to white employees.

The suit took aim at not only the gaps in pay but also Kaiser’s hiring practices. Hispanic employees are disproportionately hired for the lowest-paying jobs and are under-represented in positions of management and leadership, the suit alleged.

Similar to the first lawsuit, the second covers approximately 2,500 Hispanic and Latinx employees in administrative support, consulting services and similar positions.

In addition to the money in both settlements, Kaiser Permanente has agreed to institute workplace programs to ensure that Hispanic and Black employees’ pay and opportunities for advancement are fair and equitable.

The health system will engage an independent consultant to conduct a job analysis review within the next year. In addition, it will conduct independent pay analyses annually for employees in defined job classifications for three years.

“As a mission-driven organization – and a nationally recognized equity, inclusion, and diversity leader – we hold ourselves accountable for living our values by strengthening our inclusive culture and expanding our work to address any disparities and their root causes,” Kaiser’s Meisner said.

The courts in both cases will soon set a hearing date for preliminary settlement approval.

Photo: Sarinyapinngam, Getty Images