Kaiser Permanente settles two race discrimination class-action lawsuits totaling $18.9 million

June 4, 2021, 8:15AM. By Jane Mundy

Kaiser Permanente settles two class-action discrimination lawsuits brought by current and former Black and Latinx employees

San Francisco, CAAfter more than two years of negotiations, Kaiser Permanente has settled two class action lawsuits claiming that it discriminated against employees on the basis of race and in violation of the California Labor law.

In the first settlement, plaintiffs accused the health care giant of passing black workers over for promotion and basing merit pay on salary wages. The second lawsuit, filed about one year ago by Hisapanic and Latinx employees, accused Kaiser of curbing their wages and advancement as per the company’s universal pay and promotion policies. In both class actions, current and former employees work (or worked) in administrative support and consulting services.

Law360 reported that Kaiser’s first deal means $11.5 to about 2,225 African American workers in California. Of the second $7.4 million pact about $5 million will be divided  amongst thousands of Hispanic and Latinx employees who worked between 2016 and 2021 for Kaiser Permanente in California locations.

Kaiser Permanente Agreement

Kaiser told Becker's Hospital Review that “we are increasing our efforts to advocate for fair and just treatment, opportunity and advancement as well as embedding accountability for equity at all levels of the organization. Kaiser Permanente will continue to promote positive change, equity and total health for all — inside our organization and within our communities." In addition to the $18.9 million payout, Kaiser says it will:

• Hire an independent consultant to develop and manage a job analysis review to create additional equitable opportunities in the organization.
• Conduct an annual pay review
• Invest in more leadership development initiatives for historically underrepresented groups
• Educate employees and management about racial bias and equity. 

African American Plaintiff

Courthouse News Service quoted plaintiff Charleta Dabrowski: “As an African American current employee, I have come forward to raise issues of racial equity to make our workplace stronger…I support new programs dedicated to ensuring equal pay and fair opportunities for Black, Indigenous and People of Color at Kaiser Permanente.” Dabrowski has worked as operations specialist at Kaiser for 15 years.

Latinx Plaintiff

Plaintiff and former employee Michael Cuenca brought the second class action on behalf of about 2,500 Latinx employees in June 2020. The Agreement between the parties was reached after more than six months of negotiations. The case is Cuenca et al. v. Kaiser Foundation Health Plan, et al., Case No. RG20065123, filed in the Alameda County Superior Court in Oakland, California.

Bryan Schwartz, Cuenca’s attorney, said that “Mike raised these issues of racial and ethnic discrimination and pay disparities, in part, to help create better job opportunities for Hispanic and Latino Californians and believes this settlement will help move Kaiser in that direction…“Mr. Cuenca firmly believes that Kaiser Permanente, as one of our state’s biggest employers, should represent the diversity of California and be fully inclusive of Hispanic and Latino people, who are a vital and growing part of the population.”

According to FierceHealthcare, as part of its most recent earnings report, Kaiser brought in $2.2 billion in operating income last year and increased its health plan membership by nearly 110,000 members to 12.4 million. Its expenses climbed six percent from $81.8 billion to $86.5 billion.

Kaiser isn’t the only healthcare organization re-examining its role in racial discrimination. In March 2021 JAMA questioned whether lack, Hispanic, and Native American (ie, American Indian or Alaska Native) populations are underrepresented in the health care professions in the US, and whether “the educational pipeline show greater representation of these groups in the future health care workforce.” The study found educational disparities and other barriers played a role in these staffing trends.

Just one month earlier in February, the Catholic Health Association announced its commitments to address health disparities. FierceHealthcare reported that professional groups have adjusted their policies and practices to support anti-racist concepts, while regulators and experts have sounded the alarm on racially biased algorithms and other tech tools that could further increase disparities.