Kaiser Permanente settles employee racial discrimination suits for $18.9M

Judge banging gavel on stack of money
Alongside payments, Kaiser Permanente is also instituting workplace programs and reviews to ensure "fair and equitable” employment. One settlement comes after more than two years of negotiations. (Getty/AndreyPopov)

Kaiser Permanente has settled two class-action race discrimination lawsuits brought by current and former employees for a total of $18.9 million, according to statements from the plaintiffs’ legal representation and the health system.

The first $11.5 million settlement covers roughly 2,225 Black employees who fall within the administrative support and consulting services job families at Kaiser Permanente’s locations.

Alongside the money, the system agreed “to institute comprehensive workplace programs to ensure that Black employees' compensation and opportunities for advancement are fair and equitable” as part of the agreement, according to the plaintiffs’ announcement.

RELATED: This Minneapolis hospital official is using data to take on systemic racism in healthcare

The case was filed in the San Francisco County Superior Court and comes after more than two years of negotiations between the parties, the plaintiffs said.

Going forward, Kaiser will retain a mutually agreed upon independent consultant who will develop and manage a job analysis review over the course of a year. From this, the system will implement career development guides and other resources for Black employees working in the named job families.

Other measures agreed upon as part of the settlement include an independent, equity-focused annual pay analysis for the next three years and the appointment of an internal compliance officer to ensure these new policies are met appropriately.

“As an African American current employee, I have come forward to raise issues of racial equity to make our workplace stronger,” Charleta Dabrowski, a named plaintiff who currently works at Kaiser as an operations specialist, said in a statement. “I support new programs dedicated to ensuring equal pay and fair opportunities for Black, Indigenous and People of Color at Kaiser Permanente.”

RELATED: Fierce Healthcare's 2021 Most Influential Minority Executives in Healthcare

The second case was brought against Kaiser last June by former employee Michael Cuenca on behalf of roughly 2,500 Latinx staff working in administrative support, consulting services and other similar positions among Kaiser entities. 

It alleged that the organization was paying these employees less than white workers and disproportionately hired them to lower-paying positions.

Kaiser settled this case for $7.4 million and agreed to complete internal reforms similar to the previous case for the company's Hispanic and Latinx employees.

“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," Bryan Schwartz, who acted as Cuenca's counsel, said in a statement. "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."

RELATED: Humana agrees to $17M settlement in home health workers' class-action suit

“It is because of our commitment to equity and fairness that we have been especially saddened to learn that any employee would feel discriminated against at Kaiser Permanente,” the system told Fierce Healthcare in an emailed statement.

“While various elements of the lawsuits are subject to dispute, we recognize the importance of listening to and learning from our employees. To that end, we have chosen to work cooperatively with plaintiff groups to settle two class action lawsuits on negotiated terms," Kaiser said.

Statements from the plaintiffs and Kaiser also referenced internal programs announced last year by the system that aim to support workplace inclusivity.

“This moment has given us the opportunity to accelerate the work already well underway to benefit, in particular, approximately 4,800 current and former Black and Latinx employees in California in the administrative support and consulting services job categories,” the organization said.

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, the integrated system disclosed in February as part of its most recent earnings report. Its expenses also jumped 6% year over year from $81.8 billion to $86.5 billion.

Numerous organizations are re-examining their role in racial discrimination after a year of cultural unrest, and healthcare is no exception.

RELATED: Industry Voices—You released a statement denouncing racism and affirming 'Black Lives Matter.' Now what?

Among the workforce, a study published last month by George Washington University Milken Institute School of Public Health researchers found that Black, Hispanic and Native American people were underrepresented across a slew of healthcare professions. The authors said educational disparities and other barriers played a role in these staffing trends.

Organizations like CommonSpirit Health have recently launched new partnership programs designed to help close such gaps in representation.

The healthcare industry has also turned its focus toward race-based disparities in care delivery and outcomes.

In February, for instance, more than 20 health system members of the Catholic Health Association made new commitments to addressing health disparities. 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.