The City of Santa Clara, California is close to settling an FLSA lawsuit filed by five city firefighters back in October of 2018. These five initially alleged the city violated the FLSA by failing to include all remuneration in their regular rate of pay which resulted in firefighters being shorted on both comp time and overtime payments. The firefighters also alleged many other firefighters were also underpaid and would likley opt to join into the suit. Additionally, the firefighters claimed the city attempted to remedy past underpayments by offering monetary settlements to firefighters without approval of either the courts or the Department of Labor (DOL). Employers must be very careful when they look to settle possible FLSA violations with employees. The FLSA requires that either a court or the DOL approve such settlements. For more on the initial allegations including a copy of the complaint, click here.
The proposed settlement, which is currently pending approval before the U.S. District Court for the Northern District of California, calls for the city to pay a total of $697,726 to settle all claims related to the 2018 lawsuit. As expected, more than just the original five firefighters will receive money under the terms of proposed settlement. Here is a general breakdown of the key terms of the settlement:
First, the city continues to dispute underpaying any of the plaintiffs. However, given the potential uncertainty and costs associated with a trial it has agreed to a settlement.
Second, the plaintiffs and potential plaintiffs have been separated into three different classes. The first class consists of the original five named firefighter plaintiffs. These five original plaintiffs will receive a total of $103,794. Included in this total are back wages, full liquidated damages (equal to the amount of back wages), and a small fee for being a named plaintiff in the suit.
The second class consists of potential plaintiffs that had previously signed releases and accepted money from the city prior to the lawsuit without court and/or DOL approval. This class consists of approximately 150 current and former city firefighters. These class members will split a total of $168,930 between them. The amount each potential plaintiff will receive varies from a high of $3,661 to a low of only $21. These individuals will not receive full (100%) liquidated damages.
The third class of potential plaintiffs consists of numerous (close to 1,000) other city employees (non-firefighters) that may also receive payment under this settlement. However, since the exact amount of these damages cannot be determined at this time, the parties agree to set aside $300,000 for these individuals. These individuals will not be eligible for any liquidated damages under the terms of the settlement.
Finally, the city will also pay $125,000 for the plaintiffs’ attorneys’ fees under the settlement.
Here is a copy of the stipulated settlement submitted by both the plaintiffs’ and city attorneys last month. The court is expected to approve the settlement in the coming weeks.