Class Action Lawsuit on Behalf of African American Employees in Administrative Support and Consulting Services Job Families at Kaiser Permanente
Breaking News – June 7, 2021
Hearing on Preliminary Settlement Approval Set for July 29 in Department 613 (Judge Andrew Cheng), in San Francisco Superior Court. If the Court grants preliminary approval of the settlement, an individual notice of settlement will be mailed to each Class member in August 2021.
Previously in the Case
On April 22, 2021, Plaintiffs Shelby Stewart, Charleta Dabrowski, Benedict Johnson, and Kenya Mayfield (collectively “Plaintiffs”) and Defendants Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, The Permanente Medical Group, Inc., and the Southern California Permanente Medical Group (collectively, “Kaiser Permanente”) announced that they have resolved a class action lawsuit, filed the same day, alleging race discrimination in pay and promotions on behalf of a Class of approximately 2,225 African American employees in two job families (Administrative Support and Consulting Services) at Kaiser Permanente entities in California. Under the Settlement, Kaiser Permanente will pay $11.5 million and institute comprehensive workplace programs to benefit the Class. Kaiser has estimated that the implementation of the programmatic relief will entail at least $2 million in internal costs, and that Kaiser’s culture change training program, Belong@KP, will cost an additional $7 million over the three years of the Settlement monitoring period.
The terms of the Settlement are the result of approximately two years of investigation and negotiation and are set forth fully at the links below.
Plaintiffs: The Named Plaintiffs are Shelby Stewart, Charleta Dabrowski, Benedict Johnson, and Kenya Mayfield.
All of the Plaintiffs are African American and are either current, or recently departed former, long-term employees. Their backgrounds:
- Lead Plaintiff Shelby Stewart worked at Kaiser for over 14 years, departing the company with the title of Senior Manager.
- Plaintiff Charleta Dabrowski is a current employee who has worked for Kaiser for approximately 15 years. She holds the current title of Operations Specialist II.
- Plaintiff Benedict Johnson is a current employee who has worked for Kaiser for approximately 14 years. He holds the current title of Operations Specialist II.
- Plaintiff Kenya Mayfield worked for Kaiser for over 31 years, until retiring from the company with the title of Contracts Manager I.
The Class includes all Black or African-American individuals who currently or formerly worked at any time in California:
- Between January I, 2015 and March 31, 2021;
- In these regions: the Northern California (NCAL) Region; Southern California (SCAL) Region; California locations of the Program Offices Region; and California locations of the KP-IT Region;
- At the following California Entities: KFHP, KFH, TPMG and SCPMG;
- Both exempt and non-exempt Employees;
- Covering full-time, non-union, Director-Level and below, and non-clinical jobs only; and
- In the following two job families: Administrative Support and Consulting Services.
The Class does not include individuals in Intern or Student Temporary jobs.
On behalf of themselves, and a class of approximately 2,225 current and former Black employees, Named Plaintiffs Shelby Stewart, Charleta Dabrowski, Benedict Johnson, and Kenya Mayfield, reached an agreement with Defendants Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, The Permanente Medical Group, Inc., and the Southern California Permanente Medical Group (collectively, “Kaiser Permanente”), in which Kaiser Permanente will pay $11.5 million to settle a class action race discrimination lawsuit. The settlement covers approximately 2,225 African American employees in two job families (Administrative Support and Consulting Services) at each of the Kaiser Permanente entities.
The Named Plaintiffs filed a complaint on April 22, 2021, alleging that Kaiser Permanente maintains common pay and promotion policies and procedures that cause Black employees in these job families to be underpaid and under-promoted as compared to their similarly-situated non-Black counterparts. Plaintiffs asserted five causes of action under the California Fair Employment and Housing Act, Cal. Gov’t Code section 12940, et seq. (“FEHA”), the California Equal Pay Act, as amended, Cal. Labor Code § 1197.5 (AKA the California Fair Pay Act) (“California EPA”), the California Unfair Competition Law, Cal. Bus. & Prof. Code section 17200, et seq., the California Private Attorneys General Act of 2004, Cal. Lab. Code section 2698, et seq. (“PAGA”), Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq. (“Title VII”); 42 U.S.C. § 1981 (“Section 1981”), and related statutes. (Complaint, ¶¶ 63-91.)
This settlement was realized prior to the formal initiation of the lawsuit and without in-court litigation activity. Plaintiffs and Kaiser Permanent (the “Parties”) exchanged information (employee data, policy documents, and interviews of persons most knowledgeable about pay and promotion practices at Kaiser) and then commenced intense negotiations for more than two years with the assistance of a mediator and expert labor statisticians. The result of multiple mediations and further negotiations related to alleged racial inequities produced the settlement agreement the Parties announced today.
Plaintiffs’ Counsel began investigating Plaintiffs’ potential claims in October 2018. On August 8, 2019, the Parties entered into a tolling agreement, pursuant to which Plaintiffs and Kaiser Permanente agreed not to invoke the statute of limitations or the tolling period as a defense to any proposed action pled by Plaintiffs or to any affirmative defenses. Over the course of more than two years, Plaintiffs conducted an extensive pre-filing investigation and engaged in substantial informal data, document, and witness discovery with Kaiser Permanente. Following extensive negotiations, Plaintiffs obtained multiple rounds of class-wide data and retained an expert, Alex Vekker, Ph.D., to conduct a statistical analysis of pay and promotion disparities across the Class and to determine the scope and scale of potential Class exposure and risk. The class data production included 72 variables that reflected Class Members’ compensation and various job attributes, such as: job history, personnel actions, performance review ratings, job families, functions, departments, manager levels, EEO category, and salary grade. Plaintiffs’ expert ran multiple sophisticated multivariate regression analyses to isolate the effect of race on base pay and incentive compensation, and to demonstrate potential class-wide exposure. (Kaiser Permanente did not endorse the model used by Plaintiffs’ expert, but recognized that Plaintiffs relied on their independent analysis in reaching a resolution.)
Kaiser Permanente provided documents about the challenged policies in this action, including, but not limited to, manuals, guidelines, handbooks, tools, and training materials concerning compensation, job analysis, promotions, career progressions and management development, performance reviews, discrimination complaint processes and investigations, workforce surveys, and personnel action changes. After reviewing these policies, Plaintiffs’ Counsel conducted in-depth interviews with four Kaiser Permanente managers regarding the Company’s compensation policies, promotion policies, and performance reviews.
Following months of investigation and informal discovery, the Parties participated in a mediation on September 11, 2019 with David Rotman, a highly regarded mediator with more than 25 years of experience handling complex class and collective action negotiations. When the Parties failed to reach agreement during the first mediation, the Parties continued to negotiate and participated in an additional mediation with Mediator Rotman on December 6, 2019, during which the Parties agreed on preliminary monetary settlement. After agreeing on preliminary monetary terms, the Parties then participated in extensive negotiations regarding programmatic relief in the form of business practices changes that would address pay equity, promotional opportunities, and diversity, equity, and inclusion at Kaiser in the future.
After a delay caused by the COVID-19 pandemic, Kaiser produced additional pay data for 2020 and for the first quarter of 2021, which the Parties analyzed for additional alleged exposure during the expanded class period. Following that analysis, the Parties agreed on an expanded non-reversionary settlement fund of $11,504,759, the net to be distributed to the Class after fees, expenses, and settlement administration This non-reversionary fund of $11,504,759, along with substantial business practice changes, are described fully in the settlement documents, including especially Exhibit B (Business Practice Changes). The settlement is a testament to the courage and perseverance of Plaintiffs willing to come forward to make a difference.
Next Steps: The court will set a hearing date for preliminary settlement approval, which if approved will result in the third-party administrator issuing notice to the 2,225 class members. If the court later grants final settlement approval, the third-party administrator will allocate settlement amounts based on an objective formula to each qualifying class member.
Information about Plaintiffs’ Counsel:
Medina Orthwein LLP: Medina Orthwein is a queer-owned plaintiff-side employment and civil rights law firm located in Oakland, California. The firm ensures that the voices and rights of those most impacted by inequity are heard and can fight power with power. Using an intersectional approach to practice, Medina Orthwein effectively leverages its extensive trial, litigation, and negotiations expertise to enforce and expand protections for people most impacted by systemic discrimination. The firm specializes in individual and class action employment and civil rights disputes. MO is currently litigating a race discrimination class action against the City of San Francisco (Robinson-Luqman et al. v. City and County of San Francisco, No. CGC-20- 588012 (Cal. Super. Ct., San Francisco)) and previously settled a case against AC Transit on behalf of pregnant or lactating bus drivers (McNaulty et al. v. AC Transit, No. RG18933966 (Cal. Super. Ct., Alameda, 2018)). Founding Partner Felicia Medina has obtained cutting edge pre-suit class action discrimination settlements on three other occasions since 2016, Chen v. Western Digital, No. 8:19-cv-00909 (C.D. Cal., 2020), Pan v. Qualcomm, No. 3:16-cv-01885 (S.D. Cal., 2016), and Branner et al v. Covenant et al., No. 20-CIV-03164 (Cal. Super. Ct., San Mateo, 2020). Felicia is a current board member Public Justice, the National Center for Lesbian Rights (NCLR), and the Chicana Latina Foundation (CLF). She has been honored as a Law 360 Minority Power Broker and received the SF Business Times OUTstanding Voices Award.
Lieff Cabraser Heimann & Bernstein, LLP: Lieff Cabraser is one of the country’s largest and most successful firms exclusively representing plaintiffs in civil litigation, having secured verdicts or settlements worth over $124 billion for clients nationwide. With over 100 attorneys, the firm has led some of the most significant litigation of the last decade, including the recent CARES Act litigation on behalf of incarcerated individuals and their families resulting in over $1.5 billion in cash benefits (Scholl v. Mnuchin, 4:20-cv-05309-PJH (Northern District of California federal court)); the VW clean diesel emissions case, which resulted in over $15 billion for VW owners (In re: Volkswagen ‘Clean Diesel’ Marketing, Sales Practices, and Products Liability Litigation, MDL No. 2672 (Northern District of California federal court)); and the high-tech cold-calling wage conspiracy case alleging an agreement among prominent technology companies to not poach each other’s employees, which resulted in settlements totaling $435 million (In re: High-Tech Employee Antitrust Litigation, 11-cv-2509-LJK (Northern District of California federal court)). Partner Kelly Dermody, co-lead counsel here, led both Scholl and High-Tech for her firm. She is currently Chair-Elect of the Section of Labor and Employment Law of the American Bar Association, and Managing Partner of the San Francisco Office of Lieff Cabraser.
- Settlement Agreement
Legal Team Contacts
Legal team contacts:
Kelly Dermody: email@example.com
Jallé Dafa: firstname.lastname@example.org
Felicia Medina: email@example.com