Court approves Cargill’s $2.4M settlement of Kronos outage wage claims

Dive Brief:

  • A federal judge approved Wednesday the $2.4 million settlement of a class-action suit between food corporation Cargill and a group of current and former employees who alleged that Cargill failed to pay them for all hours worked following the 2021 Kronos ransomware attack.
  • Employees filed the suit, Futrell v. Cargill, in April 2022. They alleged that Cargill’s timekeeping and payroll systems were affected by the Kronos attack and resulting outage, leading to the pay discrepancies. Per the suit, Cargill did not pay nonexempt hourly workers and salaried employees their full overtime premium for overtime hours worked.
  • According to the settlement terms, Cargill will pay all underpaid collective members “a proportional amount of the unpaid wages as liquidated damages.” The company also will pay an additional flat rate to nonexempt employees who worked in New York as well as a per person payment to employees who were overpaid during the Kronos outage.

Dive Insight:

Nearly two years after the Kronos Private Cloud platform outage, its fallout continues to settle — and Cargill is just one of many employers facing litigation over their handling of the incident. Aside from Futrell, Cargill is also litigating a separate Kronos-related case in a Texas district court involving similar claims.

In September, the University of Massachusetts Memorial Medical Center agreed to a $1.2 million settlement of wage-and-hour claims resulting from the breach. A UMass Memorial Health executive who spoke to HR Dive in 2022 detailed the employer’s response to the outage, which disrupted payroll operations for more than one month.

UKG, the company that owns Kronos, also moved to settle with affected employees.

The outage caused chaos for many HR departments amid the 2021 holiday season, and some relied upon manual time sheets or duplicated payrolls from earlier pay periods to ensure workers could be paid on time.

Despite the experience, however, multiple employers who spoke to HR Dive following the attack said they would keep using Kronos and UKG, citing the company’s range of capabilities as well as the potential expense of finding an alternative.