Retired Division Chief Ronald Pelham has reached a $115,000 court approved settlement with the City of Monrovia, California following an FLSA lawsuit. Pelham alleged, in his September 2018 complaint that the Monrovia Fire Department misclassified him as an overtime exempt executive employee and failed to pay him any FLSA overtime. Pelham’s lawsuit was one of several filed across the country in recent months regarding overtime eligibility for fire department officers and shift commanders. For more on this initial complaint.
The terms of the settlement are pretty straight forward. Here are the highlights:
- Following a month-long negotiation process, the parties entered into a settlement agreement.
- It provides for a total settlement amount of $115,000, which includes overtime wages, penalties, and attorneys’ fees and costs.
- The Settlement Agreement involves a bona fide dispute over Plaintiff’s coverage under the FLSA.
- Counsel have conducted a thorough investigation of Plaintiff’s claim through informal discovery.
- They have reviewed Plaintiff’s timekeeping and payroll records and the City’s policy manuals and handbooks.
- Over the course of a month-long negotiation process, they debated the strengths and weaknesses of Plaintiff’s case.
- The City continues to argue that Plaintiff’s position as Division Chief renders him exempt from overtime pay under controlling case law.
- Indeed, a firefighter chief who filed a similar FLSA action for unpaid overtime in the Western District of Washington lost on the merits during the pendency of this action.
- Plaintiff, by contrast, contends that FLSA regulations explicitly provide that white-collar exemptions do not apply to firefighters.
- There remains the “legitimate question” of whether Plaintiff is exempt from FLSA’s overtime provisions.
- The totality of the circumstances support approval of the Settlement Agreement.
- Plaintiff seeks both unpaid overtime wages and liquidated damages under the FLSA.
- Based on timekeeping and payroll records in his last three years of employment, Plaintiff’s expert estimates that he worked 270 hours of overtime in 2015, 1,388.50 hours of overtime in 2016, 1,384.25 hours of overtime in 2017, and 920 hours of overtime in 2018.
- If deemed non-exempt, he was entitled to $97,890.89 in overtime pay during that period.
- The City, however, only paid him a total of $16,529.95 in overtime pay during those years.
- Accordingly, if Plaintiff prevailed, he would receive $81,360.94 in unpaid overtime.
- When combined with an equal amount in liquidated damages, Plaintiff could recover a maximum of $162,721.88.
- Of the $115,000 settlement amount, Plaintiff will receive $72,969.40.
- This reflects 45% of his maximum possible recovery and 89% of his unpaid overtime wages.
- In light of the significant disputes over FLSA coverage of fire battalion chiefs, the Court finds this figure a fair and reasonable proportion of Plaintiff’s possible recovery.
- The remaining settlement amount will be apportioned to attorneys’ fees and costs based on a 35% contingency fee.
- “Designating a portion of a settlement as attorneys’ fees is appropriate and commonplace in the context of the FLSA.”
- Because Plaintiff’s settlement amount specifically incorporates an award of attorneys’ fees, the Court considers that award when determining whether the settlement is fair and reasonable.
- Here, Plaintiff’s counsel will receive $40,250 in attorneys’ fees and $1,780.60 in costs.
- The Court finds this amount fair, given the quality of counsel and Plaintiff’s obstacles to prevailing on the merits.
Whether high ranking fire officers are entitled to overtime continues to be one of the most hotly debated FLSA topics in the fire service today. This is one of many topics that we cover in-depth at all of the upcoming FLSA for Fire Departments seminars. Our next one is only a month away in Denver, Colorado and seats are still available. Please consider joining us.
Here is a copy of the court-approved settlement.