A lawsuit brought on six months ago by two Gilroy firefighter battalion chiefs who are accusing the City of cheating them of thousands of dollars in unpaid overtime is dragging its way to a settlement conference before a judge in January, according to court records.
The City of Gilroy staunchly denies the complaints filed May 18 by retired Battalion Chief Edward Bozzo and current Battalion Chief Phillip King, who allege the City owes them more than $50,000 in overtime hours each plus legal fees.
Bozzo and King assert in their complaint that the city broke federal labor laws by classifying King and Bozzo as employees exempt from overtime, even after putting them on city-mandated furloughs during the belt-tightening grip the Great Recession had on the City in 2009.
“Furloughed employees should be non-exempt employees,” Carol Koenig, Bozzo and King’s San Jose-based lawyer, told the Dispatch in May. “If you’re a non-exempt employee you have to be paid for each and every hour you work, and have to be paid overtime when you exceed the Fair Labor Standards Act threshold.”
Koenig estimates Bozzo and King were cheated out of being paid for more than 200 hours of work each.
Because Bozzo and King were furloughed four hours per week, they had a 36-hour work week, at least in theory, the complaint explained. But their complaint indicates they still worked up to 56 hours per week, and maintains that the City should reimburse them for those hours worked at overtime levels, which on a rough estimate would equate to more than $120 per hour.
The complaint caught the Council by surprise, and left Council members baffled that two “well compensated” City employees would turn around and sue them.
“This lawsuit is really an affront to the City,” said City Councilman Perry Woodward.
Edward Bozzo – who had an annual salary of $167,386 – now collects a monthly pension of $10,800, which he will collect for the rest of his life. King’s current salary is $180,232 annually.
Bozzo and King did not return phone calls seeking comment.
“I think their complaint has no merit, and that if we were to go to trial, the City would ultimately prevail,” Woodward said. “They are taking advantage of a time we had to use furloughs to weather a difficult financial time, to avoid laying people off and reducing staff. It was a wrinkle in the system that they are now trying to exploit.”
Whatever the outcome of the lawsuit, the City has already racked up about $13,600 in legal fees from Brian Walter, a private attorney from Los Angeles with expertise in fair labor standards, according to Gilroy’s Human Resource Director LeeAnn McPhillips.
The City hired Walter because the City’s usual insurance pool – Association of Bay Area Governments – does not include employment practices liability, McPhillips said.
“I think the City has a good legal defense to the plaintiff’s argument,” Walter said.
Walter wanted to make the distinction between a furlough and a pay cut – and he said that Bozzo and King were subjected to a pay cut with time off handed over to mitigate the situation, not a furlough.
The fact that King and Bozzo are suing years later for a pay cut they agreed to makes for a weak argument in court, Walter said.
“Ed Bozzo was actually the Vice President of the Gilroy Management Association, and signed off to the agreement to accept a pay reduction in 2009,” Walter said. “And now he is suing the City saying what he signed was unlawful.”
Woodward laughed at the perceived irony of how the City fought to keep Bozzo and King on staff only to face a lawsuit from them a few years later.
“Had we laid them off we wouldn’t be dealing with this now. But because we tried to keep them on, now they are trying to hammer the City for trying to take a magnanimous approach,” he said.
In what Woodward, a partner at Terra Law Firm in San Jose, called a “baseless,” lawsuit, Bozzo and King might be hoping that the cost of managing the lawsuit will be too great for the City to manage, thus encouraging an early concession.
“We should continue to not give in,” he said. “Any time you settle a frivolous lawsuit you embolden others who might file similar claims.”
Councilman Bob Dillon declined to comment on the lawsuit, although in May he said that he thought the firefighters were acting “marginally ungrateful.” Councilwoman Cat Tucker, Councilman Peter Arellano, Councilman Dion Bracco and Councilman Peter Leroe-Munoz did not return phone calls by deadline. Mayor elect Don Gage said he did not know enough about the situation to comment.
“Many” staff hours have been spent on discussing the lawsuit as well, according to Woodward. City records show that the complaint has been put before City Council during their closed session hours four times since May. Meetings between Bozzo, King and City staff regarding this issue were also held months before the lawsuit was filed.
Despite these ongoing negotiations with McPhillips and City Administrator Tom Haglund months prior to Bozzo and King’s lawsuit, Councilmembers said they heard no complaints until May.
On July 2, the City submitted an answer to the firefighter’s complaints, in which they denied the basis of their allegations.
“As a first affirmative defense, City alleges that all relevant times City-employed plaintiffs were at all times exempt from the overtime requirements of the Fair Labor Standards Act,” court records read.
On Oct. 15, the United States District Court ordered all parties to schedule a settlement conference by Jan. 18, 2013 before Magistrate Judge Howard Lloyd.
Chances are high that the City will come to an agreement with the firefighters before going to trial, said Woodward, as the “vast majority” of these types of lawsuits usually settle before trial.
If no settlement can be reached in January, a trial before a judge will commence in the spring, according to court records.
If Bozzo and King win the lawsuit, then the City will be held responsible for the firefighter’s legal fees – but even if the City wins the lawsuit, they will be responsible for their own attorney fees.
“No matter what happens from here, this already has cost the City money,” Woodward said.
