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HomeMy WebLinkAboutHuntington Beach Municipal Employees' Association - HBMEA - 2008-04-21jA VU CITY OF HUNTINGTON BEACH Interdepartmental Communication TO: J®AN FLYNN, City Clerk FROM: JENNIFER McGRATH, City Attorney DATE: April 24, 2008 SUBJECT: Settlement Agreement Between the City of Huntington Beach and the Huntington Beach Municipal Employees' Association Re Compensatory Time Off At the April 21, 2008 Closed Session, the City Council approved the settlement with the Huntington Beach Municipal Employees' Association, and authorized the City Administrator to sign the settlement agreement in the above -mentioned case. Attached please find the original, executed Settlement Agreement with the request that you keep the agreement on file in your office. JENNIFER McGRATH City Attorney Attachment 21839 SETTLEMENT AGREEMENT AND RELEASE This SETTLEMENT AGREEMENT AND RELEASE is entered into by and between the City of Huntington Beach (City), through its authorized representatives, and the Huntington Beach Municipal Employees' Association (the Association), an employee organization recognized by the City to represent certain personnel employed by the City of Huntington Beach in their employment relations with the City, through its authorized representatives, with reference to the following facts: A. For the period between (a) fifty-two biweekly pay periods immediately preceding the biweekly pay period commencing September 8, 2006 and (b) the date the Settlement Agreement takes effect (hereinafter referred to as the applicable time frame), the applicable collective bargaining agreement (hereinafter referred to as the Memorandum of Understanding or MOU) between the Association and the City governing the terms and conditions of employment of employees in all job classifications represented by the Association provided that each such employee may elect to receive compensatory time in lieu of pay to a maximum of one hundred forty (140) hours pursuant to Article IX B.1 of the MOU. When an employee has accumulated 140 hours and requests additional compensatory time off for overtime worked, the employee receives a cash payment for that overtime instead of the requested compensatory time off. B. The Association contends that, during the applicable time frame, the City incorrectly calculated the compensation due for overtime paid in cash to an employee who has accumulated 140 hours of compensatory time banked and requests additional compensatory time earned (hereinafter referred to as "cash in lieu overtime") by omitting from those calculations the value of specialty pay received by the individual employee as required by the MOU. The term "specialty pay" includes additional pays as required by the MOU under Article VII and collectively these payments plus the employee's base salary may be characterized as "Regular Rate of Pay." 07-1397/16705 1 C. Had the value of the specialty pay been included as part of the employee's compensation for cash in lieu overtime, as claimed by the Association, each employee earning cash in lieu overtime during the applicable time frame would have received greater compensation than -that actually provided by the. City. D. The claims by the Association described above shall be referred to collectively as the Association's claims. E. The City disputes all the Association's claims. F. The Association is participating in the terms of this Settlement Agreement and Release on behalf of the employees it is recognized to represent. The City and the Association may be referred to individually as "Party" or collectively as "Parties." G. Had the Parties not settled, the Parties expected costly litigation including a trial on the Association's claims. The Parties fully expected that, whatever the outcome in the trial court, there was a high probability of appeal by either side on the numerous issues raised in that litigation. In reaching this Settlement Agreement and Release, the Parties took into account the unpredictability inherent in trying this matter before a jury, as well as the likelihood of success on the legal issues to be decided by the Court. The Parties view this settlement as a compromise of the risks attendant to both sides in litigating this matter and a fair and just adjustment of the claims made. Based on the foregoing recitals, the terms of the Settlement Agreement and Release are set forth below: 1. PARTIES: This Settlement Agreement and Release is made by and between the Association and the City. 07-1397/16705 2 2. DEFINITIONS: 2.1 AGREEMENT: ."Agreement." This Settlement Agreement and Release shall be referred to herein as the 2.2 FLSA: As used in this Agreement, "FLSA" refers to the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-219 and the Portal -to -Portal Act of 1947, 29 U.S.C. §§ 251-262. 3. PURPOSE OF AGREEMENT: The purpose of this Agreement is to resolve and settle all outstanding claims, issues and disputes by the Association and the employees it is recognized to represent against the City arising from its claims, including, but not limited to, all the Association's claims for additional compensation for employees in job classifications it represents as described above, all claims for retaliation under 29 U.S.C. § 215(a) (3) and for whistleblower liability under California Labor Code § 1102.5 and/or other California law relating to this compensation arising from any wage and hour claim described above. The Association's claims were, and continue to be, denied by the City. The Parties wish to finally settle and resolve all disputes and controversies between them arising from claims described in this Agreement, including, but not limited to, all the Association's claims for additional compensation for employees in job classifications it represents, as described above, all claims for retaliation under 29 U.S.C. § 215(a) (3) relating to this compensatory time compensation, and all claims for whistleblower liability under California Labor Code § 1102.5 and/or other California law arising from any wage and hour claim described above in order to make their peace and to avoid the uncertainties of further litigation and the expense incident thereto. 4. WAIVER OF CALIFORNIA CIVIL CODE SECTION 1542: The Parties understand that this Agreement extends to all grievances, disputes or claims of every nature and kind, known or unknown, suspected or unsuspected, arising from claims for additional compensation for employees in job classifications the Association represents under the applicable MOU, including, but not limited to, all claims for retaliation under 29 U.S.C. § 215(a) (3) and for whistleblower liability under California Labor Code 07-1397/16705 3 § 1102.5 and/or other California law relating to this compensation arising from any wage and hour claim described above. The Parties understand that this release does not address claims relating to any conduct or activity which occurs after the date that the Agreement is fully executed, nor any claim related to number of hours worked, nor any individual claim of any employee represented by the Association under the FLSA. The Parties further acknowledge that any and all rights granted them under Section 1542 of the California Civil Code regarding the Association's claims, including, but not limited to, claims for additional compensation for employees in job classifications it represents under the applicable MOU, and all claims for retaliation under 29 U.S.C. § 215(a) (3), and for whistleblower liability under California Labor Code § 1102.5 and/or other California law relating to this compensation, arising from any wage and hour claim described above, are hereby expressly waived. Section 1542 of the California Civil Code reads as follows: SECTION 1542. GENERAL RELEASE; EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. 4.1 RELEASE: The Association and all of its respective agents, directors, officers, members and assignees do hereby fully and forever release and discharge the City and its past or present governing bodies, boards, officers, directors, agents and employees from any and all causes of action, actions, judgments, liens, indebtedness, damages, losses, claims, liabilities, grievances and demands arising from the Association's claims against the City, including, but not limited to, the Association's claims for additional compensation for employees in job classifications it represents under the applicable MOU, and all claims for retaliation under 29 U.S.C. § 215(a)(3), and for whistleblower liability under Labor Code § 1102.5 and/or other California law relating to this compensation arising from any wage and hour claim described above. The City hereby fully and forever releases and discharges the Association, its directors, officers, the employees it is recognized to represent and all of its respective attorneys, agents and assignees from any and all causes of action, actions, judgments, liens, indebtedness, 07-1397/16705 4 damages, losses, claims, liabilities, grievances and demands arising from the Association's claims. 5. PAYMENT OF ADDITIONAL COMPENSATION TO EMPLOYEES IN JOB CLASSIFICATIONS REPRESENTED BY THE ASSOCIATION WHO EARNED PAY FOR CASH IN LIEU OVERTIME DURING THE APPLICABLE TIME FRAME 5.1 In settlement of all claims asserted by the Association and the employees in all job classifications it is recognized to represent with respect to cash in lieu overtime earned during the applicable time frame, the City shall recalculate the cash in lieu overtime compensation due and owing each employee represented by the Association during that time frame by the following methodology: A The City shall pay to each such employee the difference between the (a) value of the compensation for cash in lieu overtime actually paid to the employee for the fifty-two biweekly pay periods immediately preceding the pay period commencing September 8, 2006, and (b) value of the compensation for cash in lieu overtime calculated at the regular rate of pay via the formula below. B. The City will calculate the compensation due and owing each employee represented by the Association for that time period by ascertaining the number of cash in lieu overtime hours that were earned for each employee during that time period and applying the regular rate of pay of the employee on the last pay period preceding September 8, 2006 wherein the employee received compensation for cash in lieu overtime with respect to all hours earned during that time period. C. The payment of this difference for all compensation owed under the MOU will be considered "back pay" for purposes of paragraph 12 of this agreement. There is no payment due pursuant to the FLSA for this compensation. D. City shall pay all compensation owed for cash in lieu overtime at the regular rate of pay commencing September 8, 2006. 5.2 As soon as reasonably practicable after execution of this Agreement by City and the Association, the City shall forward to each of the eligible employees or former employees as described above in Paragraph 5.1 who has executed an individual waiver of all claims that could have been asserted under the FLSA during the applicable time frame, the individual sum representing the gross back pay amounts and applicable liquidated damages 07-1397/16705 5 consistent with the methodology described in Paragraph 5.1, less applicable withheld taxes. No payment shall be made to any eligible employee or former employee unless and until he or she submits an executed individual waiver, a copy of which is attached hereto as Exhibit "A." 6. DISCLOSURES AND REPRESENTATIONS: 6.1 CONSULTATION WITH COUNSEL: The Association has had sufficient time to consult with independent counsel with respect to the advisability of accepting the terms of this Agreement and with respect to the releases, waivers, and all matters contained herein. The City and the Association acknowledge that they have executed this Agreement without fraud, duress, or undue influence. 6.2 NO RELIANCE ON PRIOR REPRESENTATIONS: Statements made in the past have been modified by changing circumstances. The Association and the City acknowledge that the circumstances of the Association's claims and of this Agreement are unique. Neither the City nor the Association nor any other officer, agent, employee, representative, or attorney of the City nor the Association or others, has made any statements, representations, or promises to the City regarding any facts which may be relied upon in executing this Agreement, except as expressly stated in this Agreement. 6.3 VOLUNTARY AND ]KNOWING WAIVER OF RIGHT: Each of the Parties acknowledges that he, she or it has carefully read this Agreement. Each of the Parties acknowledges that the only promises made to induce him, her or it to sign this Agreement are those stated herein. Having been fully advised and informed, each of the Parties voluntarily enters into this Agreement and the waiver of rights covered by this Agreement. Each Party understands, acknowledges, and agrees that this is a compromise and settlement of disputed claims and that nothing herein shall be deemed or construed at any time or for any purpose as an admission of the merits of any claim or defense. 6.4 ASSIGNMENT OF RIGHTS: Except for such assignments, transfers, or grants which may have occurred upon operation of law, the Parties have not heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the claims, demands, causes of action, obligations, liens, judgments, orders, damages, liabilities, losses, costs and expenses of any kind, in law or in 07-1397/16705 6 equity, whether known or unknown, that the Parties now hold, will ever hold, or have ever held against the others related to the subject matter of this Agreement, including, but not limited to: (1) the Association's claims for additional compensation for employees in job classifications it represents, all claims for retaliation under 29 U.S.C. § 215(a)(3) relating to this compensation, and all claims for whistleblower liability under California Labor Code §1102.5 and/or other California law relating to this compensation; (2) any and all claims, demands, or causes of action arising out of or in any way connected with any transactions, occurrences, acts or omissions of the City for alleged violations of the applicable MOU, including the Association's claims for additional compensation for employees in job classifications it represents, all claims for retaliation under 29 U.S.C. § 215(a)(3) relating to this compensation, and all claims for whistleblower liability under California Labor Code § 1102.5 and/or other California law relating to this compensation arising from any wage and hour claim described above; or (3) any and all claims, demands, or causes of action arising out of or in any way connected with any transactions, occurrences, acts or omissions relating to the subject matter of this Agreement occurring prior to the effective date of this Agreement. 7. NO INTEREST PAYMENTS: No interest shall be paid to the recipients of the additional compensation payable under Paragraph 5 of this Agreement. 8. REIMBURSEMENTS: The Parties further agree that any attorneys' fees and costs associated with the Association's claims under the applicable MOU and/or the FLSA for additional compensation for employees in job classifications it represents, all claims for retaliation under 29 U.S.C. § 215(a) (3), and for whistleblower liability under California Labor Code §1102.5 and/or other California law relating to this compensation arising from any wage and hour claim described above shall be paid by the City up to a maximum payment of $2,500. This provision does not apply to any member's individual claim or proceeding brought independent of this Agreement. 9. ENTIRE AGREEMENT IS INTEGRATED: The Parties agree that the obligations contained in this Agreement are the sole and only consideration for it, and that no representations or inducements have been made by any 07-1397/16705 7 Party, or such Party's employees, agents, or attorneys, except as specifically set forth in this Agreement. There is no other Agreement, written or oral, express or implied, between the Parties with respect to the subject matter of this Agreement except as explicitly referred to herein.. This Agreement supersedes any previous oral or written, agreements or_ understandings between the Parties regarding any matter contained in the Agreement. The recitals shall be deemed an integral part of the Agreement. 10. SUCCESSORS: This Agreement shall be binding upon the Association and the individuals employed in job classifications it represents in this informal grievance during the applicable time frame, and their heirs, representatives, executors, administrators, successors and assigns, and shall inure to the benefit of each and all of their heirs, representatives, executors, administrators, successors and assigns. 11. JOINT DRAFTING OF AGREEMENT: The Association, through its attorneys, and the City, through its attorneys have participated in the drafting of this Agreement. The attorneys for all Parties, by their signature on this Agreement, approve it as to form, and accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting parties will not be employed in any interpretation of this Agreement. 12. WITHHOLDING OF TAXES FROM SETTLEMENT AMOUNTS: The Parties agree that the cash payments set forth in Paragraph 5 of this Agreement that are designated as back pay under paragraphs 5.1 and 5.2 are wages subject to full withholding of federal and state income and other payroll withholding taxes. The City shall base the amount of tax to withhold on the latest W-4 forms submitted by the recipients to the City, unless the recipients submit updated W-4 forms to the City within five (5) days of execution of this Agreement. 07-1397/16705 8 13. SEVERABILITY: This Agreement shall be considered severable, such that if any provision or part of the Agreement is ever held invalid under any law or Court ruling, that provision or part of the Agreement shall remain in force and effect only to the extent allowed by law or Court ruling, and all other provisions or parts of the Agreement shall remain in full force and effect. 14. EXECUTION OF THIS AGREEMENT: 14.1 EXECUTION BY THE CITY: This Agreement may be executed on behalf of the City by a representative of the City's City Council. A facsimile copy of the signature of the City's representatives shall have the same force and effect as an original. 14.2 EXECUTION BY THE ASSOCIATION: The Association shall execute this Agreement through an authorized officer. 14.3 COUNTERPARTS: Each of the Parties may execute this Agreement in counterparts by signing a copy of the signature page for this Agreement. A facsimile copy of a signature shall have the same force and effect as an original. Each of the signed signature pages shall be incorporated into this Agreement and have the same legal effect as if each of the Parties had signed the original copy of this Agreement. For CCo untington Beach Paul Emery Interim City Administrator For Huntington Beach Municipal Employees' Association By: Approved as to form: C Approved as to form: ennifer NbGrath City Attorney 07-1397/16705