Sales Reps Reach $3 Million Settlement With Stryker

Stryker Corporation and its subsidiary Howmedica Osteonics Corp. of New Jersey have reached a $3 million settlement in a class action lawsuit that accused the company of violating California labor law by failing to reimburse sales associates for expenses such as mileage, telephone costs and other business expenses.

Tanner Trosper started the class action lawsuit in 2013 after working for Stryker/Howmedica as a sales representative from November 2008 through 2011. Trosper’s LinkedIn page says he worked for Stryker Craniomaxillofacial from January 2007 to May 2010 in the Los Angeles area, before being “recruited” by Synthes in 2010.

The deal calls for an average gross payment of about $22, 000 for each of the 134 class members.

“The settlement represents a very favorable result for class members, ” the parties say in their jointly filed motion. “Despite disagreement between the parties over the issue of liability and the amount of damages, the parties were ultimately able to reach an agreement that awards class members substantial sums.”

Trosper said that Stryker and Howmedica had a “blanket policy” of not reimbursing sales representatives for business expenses until the company changed that policy in 2011 and 2012.

Stryker’s Failed Arguments

Stryker claimed it wasn’t liable for the claims because the sales reps were employed by Howmedica. The judge rejected that argument in April noting the ties between Howmedica and Stryker. In June, Stryker tried to convince the judge that treating all the reps as a “class” was inappropriate because Howmedica’s reimbursement policies varied among its California divisions. The judge also shot down that argument. The parties then reached a settlement.

Of the total $3 million settlement amount, the sales reps’ lawyers will get no more than 25% in fees and no more than $100, 000 in expenses, according to the settlement. As the lead plaintiff, Trosper will get $7, 500 as an incentive award.

Second Loss for Stryker

This isn’t the first time that the sales reps’ lawyers have represented sales employees in a lawsuit against Stryker over its business-expense reimbursement practices.

In 2012, according to Law360, Stryker and the lawyers reached a $4.25 million settlement to resolve claims brought by sales representatives who were employed in Stryker’s endoscopy, communications or instruments divisions in a suit that was before the same judge as the Trosper case.