SLO firefighters union sues city over alleged overtime violations

Members of the San Luis Obispo City Fire Department’s union filed a lawsuit in federal court two weeks ago, accusing the city of miscalculating and underpaying two dozen union members their overtime benefits for three years.

The city of San Luis Obispo has not yet been served with the lawsuit, but City Attorney Christine Dietrick said Friday that it had already been reviewing its policy prior to the lawsuit in the wake of a recent federal appellate case addressing the same issue. Dietrick said the city’s audit is ongoing and the city is “committed to complying with the law” in light of the recent case.

On Nov. 30, attorneys for 22 members of International Association of Firefighters Local 3523 filed a lawsuit in U.S. District Court alleging failure to pay overtime wages.

The union does not yet know how much the firefighters were underpaid, union President Matt Polkow said Friday. One of the demands stated in the lawsuit is for a “complete and accurate accounting” of how much overtime pay the firefighters are entitled, Polkow said.

“By no means is this a comfortable situation,” Polkow said. “As uncomfortable as this is for the city, it’s equally as uncomfortable for the labor union.”

The union entered into a memorandum of agreement with the city in 2012, according to the lawsuit, requiring firefighters, engineers and captains to receive overtime pay of 1.5 times their regular rate for hours worked beyond their regular schedule. Both parties entered into a new agreement with similar overtime provisions in November 2016.

That contract contained a cafeteria plan that provided a bimonthly contribution for the optional purchase of health, dental, vision and disability insurance. It allowed employees with other health insurance to receive a cash payment in lieu of health coverage from the city.

The lawsuit states that under the Fair Labor Standards Act, an employee’s regular rate of pay includes those cash payments given in lieu of health coverage. The lawsuit alleges that, in the past three years, union members worked overtime and received “substantial” cash payments in lieu of health insurance but the city “knowingly and deliberately” underpaid them for their overtime by excluding those payments when calculating the regular rate of pay.

For example, San Luis Obispo fire Capt. Steven Gonzalez, a former union president, opted for cash in lieu of the city health plan. But over the past three years, the city did not include that cash payment in calculating Gonzalez’s regular rate of pay, thus underpaying him in his resulting overtime compensation.

The firefighters contend the city deliberately miscalculated the regular pay rates because it had a similar dispute with an unnamed employee union in 2003.

“By virtue of that dispute, the city was presented with an opinion by the Department of Labor that clearly set forth the city’s obligation to include cash payments in lieu of benefits in calculating ‘regular rates,’ but despite that advanced knowledge of its statutory obligation, the city failed and/or refuse to take any action to ensure it accurately paid plaintiffs,” the lawsuit states.

The union members are seeking to recover three years’ worth of unpaid overtime — an amount not listed in the lawsuit — as well as damages, attorney’s fees and an injunction preventing the city from continuing the practice.

Dietrick, the city attorney, wrote in an email that a 9th U.S. Circuit Court of Appeals case — Flores v. City of San Gabriel — addressed the issue of in-lieu payments and overtime. The case decision, filed in June, prompted the city to conduct the ongoing audit to determine if any liability exists for the city in its obligations.

“The city has continuously acted in good faith, while monitoring the evolving legal landscape around these complex issues, and the city certainly did not commit any willful violation of the FLSA as alleged,” Dietrick wrote.

Dennis Hayes, a San Diego-based attorney representing the fire department employees, did not return a request for comment.

This story was originally published December 16, 2016 at 5:51 PM with the headline "SLO firefighters union sues city over alleged overtime violations."