Facts

Kaiser Permanente, one of the nation's largest nonprofit health plans serves 12.5 million members and its affiliates and subsidiaries employ over 100,000 individuals throughout California. As one of its employees, Michael Cuenca worked as a Project Manager Consultant/Specialist for Kaiser's National Diversity Department at Kaiser's headquarters in Oakland, California from May 2011 to April 2015. He later switched positions, working instead as a Business Analyst/Specialist for Kaiser Permanente's Human Resources People Analytics group. After notifying Kaiser of certain employment discrepancies he discovered, Cuenca brought a class action suit, on behalf of himself and a class defined as Hispanic/Latinx, against Kaiser.

PLAINTIFFS' CONTENTIONS: Plaintiff Cuenca contended the following: Cuenca was the only Hispanic/Latinx person in a demographic data analysis team comprised of four individuals. Of this group, he was the lowest-paid, even though he had the same job code as two of the other three and despite having the most experience in the group. In 2015, Cuenca received a negative rating in the communications behavior criteria section of his mid-year performance review. He alleged that this rating was due to the racial/national origin bias of his manager, Dan Lapporte, who accused Cuenca of being "mean" and "aggressive" towards a co-worker, which Cuenca alleged played into the racist stereotypes about Hispanic men. Cuenca reported the allegations to Human Resources, and the accusation was removed from the review with a subsequent rating increase in the criteria. However, thereafter, Cuenca applied to dozens of positions he was qualified for and that would constitute a promotion for him, but he was turned down for every one, including positions that remained unfilled or were cancelled. For example, within his group, after a team member left, a new, more senior analyst position was created to fill the gap. This position had higher pay and would have been a promotion for Cuenca. Cuenca was informed that the position was more technology-oriented than the vacated position, extensive experience which he had because of his background in information technology and demographic data analysis. Yet, though he applied for the position, Lapporte never acknowledged his application and later, it was announced that the position criteria changed.

On October 23, 2019, Cuenca sent an email to Bernard Tyson, who was then the CEO. The email sought to alert Tyson about the lack of advancement opportunities for and pay discrimination against Hispanic/Latinx employees. Attached to the email was a report with data showing the discrepancy in pay and promotion. By October 25, 2019, while Cuena had not received a response from Tyson, he did receive one from Tod Trotter, Head of Human Resources Compliance, who stated he would investigate the complaints; but, Cuena was never contacted about such an investigation thereafter. The following year, a new CEO--Gregory Adams--made an appearance and Cuenca in February 2020, sent an email pointing out the issues, but once again encountered silence. Four months later in June, Cuenca decided to send an updated version of the report to more individuals, not just Adams and Trotter, but also to Tom Hanenburg, Interim Regional President; Richard Isaacs, Executive Director; Ron Copeland, Chief Equity, Inclusion and Diversity Officer; Christian Meisner, Chief Human Resources Officer; and, Richele Thornburg, Executive Vice President of People and Leadership Strategy. Throughout these communications, Cuenca emphasized the disparity in pay and dearth of Hispanic employees in management and leadership positions.
Taking into account the prevailing evidence presented to Kaiser, Cuenca alleged that Kaiser has maintained a policy of discrimination in hiring and promotions based on its common policies and/or practices. While Kaiser has in place an Affirmative Action Plan, in actuality, its hiring and promotion practices and therefore resulting workforce numbers reflect a blatant disparity to the contrary. Moreover, the Hispanic/Latinx employees who were actually hired and/or promoted were hired at the lower pay scale levels (grade classification) with lower pay at a disproportionate rate. As Kaiser is required to maintain records of not only wages and wage rates, but also job classifications and employment terms and conditions of all its employees throughout California, it can easily track how much employees make in comparison to others within the same classifications. When viewed, in total, with skill, effort and responsibility under similar working conditions, Kaiser has paid Hispanic/Latinx employees less than employees of other races and/or national origins for substantially similar work. Based on this information and the repeated complaints Cuenca provided to all relevant individuals in positions to address this problem, Kaiser knew or should have known about the situation, yet failed to take steps to address it.

DEFENDANTS' CONTENTIONS: Defendant Kaiser and its affiliates generally denied all contentions. While they dispute several elements of the suit, they do recognize the importance of listening to and learning from their employees and seek to address any disparities.

Result

The case settled for $7.4 million. Kaiser also agreed to institute comprehensive workplace programs to advocate for fair and just treatment, opportunity and advancement as well as embedding accountability for equity at all levels of the organization. As such, Kaiser will also do the following: 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; compensation and opportunities for advancement that are fair and equitable. The injunctive relief is valued at approximately $9 million.