Honda has agreed to pay $2.3 million to settle claims alleging it violated wage and hour law while its timekeeping software was offline, according to a March 4 court filing.
The lawsuits stemmed from an incident that began in late 2021: A ransomware attack took Kronos offline for employers around the country, and many were without the UKG product for weeks.
At the time, HR teams had to quickly decide how to run payroll. A number of employees subsequently filed suit, alleging that employers such as Frito-Lay and New York City’s Metropolitan Transit Authority violated wage and hour laws in responding to the outage.
In Whatley, et al. v. Honda Development and Manufacturing of America, LLC, employees alleged Honda failed to track workers’ hours and instead estimated their time. This resulted in Fair Labor Standards Act overtime violations, they said.
Honda moved to have that and other cases dismissed, but a judge allowed at least one claim to move forward: whether the company excessively delayed compensation for overtime that went unpaid during the outage.
The proposed settlement, which must be approved by the court, covers a range of claims, several lawsuits and two potential groups of employees — one comprising an estimated 1,264 workers and the other a potential 8,797.
The agreement came after a “hotly contested” case and difficult negotiations, according to the plaintiff’s unopposed motion for settlement approval. The plaintiffs said both sides settled because of the risk and expense of taking the claims to trials. Counsel for the plaintiffs did not respond to a request for additional comment.
In a statement provided to HR Dive, a Honda spokesperson said “we remain firmly committed to ensuring our associates are paid accurately and on time and are pleased to put this matter behind us.”