Settlement Approved in Cognizant Wage Case

The Eastern District of California has issued an order regarding a motion for a preliminary settlement between plaintiffs claiming underpayment and IT services company Cognizant Technology Solutions.

Lead plaintiff Debi Mishra was a Testing Analyst for Cognizant working on their client’s web site. Mishra claimed he received a letter saying his “position has been classified as overtime-eligible.” However, Mishra said after the reclassification, “Defendants allegedly underpaid overtime to Class Members by failing to include certain amounts when calculating the regular rate of pay.” The plaintiff also claims that the letter noted that “he was guaranteed to earn ‘no less than $62,100,’ and that the bonus would be added to keep his annual income at this level.” The position’s annual base pay was $39,663.65; with a bonus, it totaled to $45,163.65. He argued that if the overtime rate is calculated from the total income, the guaranteed $62,100, that overtime rate should be $44.78, not $32.57. However, the defendant denies that plaintiff Mishra and the Class are owed more wages and claim that the plaintiff and class “did not actually work overtime hours and instead merely recorded overtime as a means of obtaining faster and more evenly spread pay.” As a result, the defendants have denied the claims against them.

Under the settlement, Cognizant has agreed to pay $5,726,000 to the class. The court also certified the settlement class finding that the requirements for a class action were met. Specifically, numerosity, commonality, typicality, and adequacy. The class has 714 members, and each class member “shares a common contention” regarding compensation. The typicality requirement was satisfied because the claims brought by the lead plaintiff are “reasonably co-extensive” with the other class members; The court said the adequacy requirement was satisfied because “it appears Plaintiff and counsel have no adverse interests to those of the Class Members. Indeed, Plaintiff seeks only the same relief as the class – recovery of alleged underpaid overtime.”

The court determined that the proposed amended settlement is fair and reasonable and was made through informed negotiations, utilizes an effective class administrator, and the plaintiff and the class are treated the same.

The plaintiff and class are represented by Clayeo C. Arnold, APC. Cognizant is represented by Orrick, Herrington & Sutcliffe.