Fire Law Blog Fire Service and Public Safety Legal Issues Blog by Curt Varone
A court-approved settlement has been reached between Modesto firefighters and the City of Modesto in a Fair Labor Standards Act lawsuit over the inclusion of health care buy-back in overtime. The suit was filed in 2016 by Michael Beidleman who claimed that the city’s failure to include payments in lieu of health care benefits in overtime calculations violates the FLSA.
The FLSA requires virtually all remuneration paid to hourly employees to be included when calculating an employee’s “regular rate.” The regular rate is the rate that employers must use when calculating overtime. Employers often miscalculate the regulate rate by failing to include things like longevity pay, medic pay, educational incentives, and sick leave buy-backs. There are some exceptions that do not have to be included, such as vacation buy-backs.
Twenty-one additional firefighters joined Beidleman’s suit, and last year US District Court for the Eastern District of California granted it class action status. Since the law is fairly clear in favor of the firefighters, the parties wrangled over a number of procedural issues. In ruling on the settlement, Judge Dale A. Drozd found first that a genuine dispute existed and that the proposed settlement was fair and reasonable.
- There appears to be no dispute that defendant is liable for overtime payments under Flores.
- However, this case involves legitimate questions about the extent of the defendant’s FLSA liability.
- Here, the parties indicate that there are at least three such bona fide disputes.
- First, the parties disagree about how to calculate overtime compensation and state that the evidence and applicable law on this issue is both complicated and conflicting.
- Second, due to uncertainty in the law prior to the Ninth Circuit’s decision in Flores, it is unclear whether defendant acted in good faith when it failed to include cash in lieu of health insurance benefits in its calculation of overtime compensation or if defendant would be subject to liquidated damages.
- Finally, the parties dispute the applicable statute of limitations. Under the FLSA, the statute of limitations is two years, which may be extended to three years if the violation is found to be willful.
- Although defendants concede liability under the FLSA, they dispute whether the FLSA violation at issue in this case was willful.
- All of these issues impact the extent of defendant’s FLSA liability in this case.
- Based on the aspects of the action discussed above, the court is satisfied that there are bona fide disputes at issue here.
The twenty-two named firefighters will receive $100,086, with the potential that thirty additional firefighters could file additional claims. The city must pay the firefighters’ attorneys’ fees, an additional $43,415. The city also acknowledged spending $29,148 for its attorneys through last January bringing the total to over $170,000.
Here is the settlement ruling: Beidleman v Modesto SETTLEMENT
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