1 SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS
This Settlement Agreement and General Release of Claims (the “Agreement”) is made and entered into by and between the City of Manteca (“City”), the Manteca Firefighters, IAFF Local 1874 (“Local 1874”), and the employee signatories to this Agreement (“Employees”), collectively referred to as “Parties.”
RECITALS
WHEREAS, Local 1874 is the designated exclusive bargaining representative for the Firefighter Bargaining Unit as identified in the Memorandum of Understanding (“MOU”) by and between the City and Local 1874; and
WHEREAS, Employees have worked in the classifications of Firefighter, Fire Engineer, Fire Captain during the period July, 1, 2021 to June 30, 2023, and WHEREAS, during this time, there is a dispute regarding whether the City properly included longevity pay in calculating Employees’ incentive pay, as set out herein, and consistent with section 11 of the MOU which was in effect prior to the successor MOU approved by City Council on November 21, 2023; WHEREAS, the City did not and does not concede that the claims set out herein have merit, prior to entering into a Tolling Agreement (attached hereto as Exhibit A); WHEREAS, the City and Local 1874 on behalf of Employees did in fact sign the Tolling Agreement concerning the City’s payment of longevity pay and the above incentives tolling Employees’ potential FLSA claims and grievances as of August 21, 2023; and
WHEREAS, the City has reviewed the claims of Local 1874 and denies them, based on existing case law, federal regulations, and interpretative guidance from the Department of Labor; and
WHEREAS, via arms-length negotiations, meetings and discussions (with each side represented by legal counsel), and after evaluating any and all of the relevant data, the Parties have agreed to resolve any and all differences, including any FLSA and/or MOU claims by Local 1874 and/or Employees may have against the City for any purported unpaid wages and/or overtime compensation based on the City’s purported omission to include longevity pay in the incentive pay calculations to avoid the potential uncertainty, expense and delay of litigation, and/or other administrative hearings; and WHEREAS, the Parties agree that the amounts paid under this Settlement Agreement are a fair and reasonable calculation of the amounts owed to Employees under the FLSA and the applicable MOU; and
WHEREAS, as a result of their discussions, meetings and negotiations, the Parties desire a settlement that is full and complete, resolving any and all current and ATTACHMENT 2
2 potential grievances, disputes, controversies, claims and possible actions between them arising out of this dispute, including known and unknown matters; and WHEREAS, as to these recitals set out in this Agreement, the Parties agree that such recitals shall be incorporated herein; and
WHEREAS, as a result of their negotiations, the Parties wish to resolve and release all disputes and claims actually raised or could have been raised against the City relating to the City’s alleged failure to include longevity pay in the incentive calculations.
NOW, THEREFORE, in consideration for the mutual promises and undertakings of the Parties as set forth below, the Parties enter into this Agreement and agree as follows:
TERMS
1. Effective Date. This Agreement shall become effective immediately upon its execution by the Parties.
2. Treatment of Incentive Pay. Consistent with the MOU approved by City Council on November 21, 2023, the Parties agree that for purposes to effectuate this Agreement and moving forward, beginning July 1, 2023, the City shall not include longevity pay in the incentive pay calculations, and section 11 of the MOU was updated with this change. This Agreement, however, is not intended to affect other provisions of the MOU. This Agreement is intended to resolve the claims of all Local 1874 members relating to longevity pay for the periods set out herein.
3. Settlement Payments. As further described below, following the Parties execution of this Agreement, the City shall make payments to Local 1874 members to resolve the claims alleged by Local 1874 with regard to the City not purportedly including longevity pay in the incentive pay calculations.
A. Payment to Local 1874 Members. Within ninety calendars (90) days following the execution of this Agreement, the City shall issue payment to current employees who are current and former Local 1874 members (as of May 1, 2024), less applicable normal payroll tax withholdings, pursuant to the attached table set out as Exhibit B, consistent with the time frame noted above, which, per negotiations between the Parties, represents the difference as described in Section 2 above. In so arriving at these negotiated amounts, the Parties reviewed data reflecting the total hours each employee worked, as well as the applicable rates. The Parties recognize and acknowledge that Local 1874’s claims, on behalf of its members and based on each employee’s individual claims, were disputed as a matter of law, and also that if Local 1874 had prevailed on its claims, the City may have nevertheless been entitled to apply “offsets” towards any resulting liability.
These payments represent the agreed upon amount for all compensation alleged owed to Local 1874 members. As noted above, the City shall issue these payments to each eligible employee less all appropriate payroll deductions and withholdings. As a precondition to receipt of these settlement payments, each employee (in addition to Local 3 1874) will be required to sign an acknowledgment, indicating receipt of payment, that such payments are intended to be wages and compensation relating to longevity pay, and that the City reserves the right to apply these amounts as credits or offsets toward any future liability as to the claims at issue. The parties acknowledge that these payments are not required to be reported to CalPERS and no CalPERS adjustments shall be made.
Local 1874 and its members acknowledge that the City (nor any of its representatives or employees) has not made any promises, representations, or warranties (either express or implied) regarding any tax consequences of any amounts paid pursuant to this Agreement.
4. Future Bargaining Rights/Obligations. Nothing in this Agreement is intended to affect, preclude, limit, or prohibit the Parties from meeting and conferring or bargaining over pay, benefits, and/or other issues constituting or relating to any of the terms and conditions of employment of Local 1874’s members, pursuant to the Meyers-MiliasBrown Act (Gov. Code sec. 3500, et seq.) or otherwise.
5. Release of Claims. By executing this Agreement and accepting the payments specified herein, Employees and each of them, and Local 1874, waive any potential claims for further back pay, liquidated damages, interest and/or attorney fees under the FLSA and/or Local 1874 MOUs related to the failure to include longevity pay in the incentive pay calculations. Employees and each of them hereby release, waive and discharge the City from any claims that the City failed to pay them consistent with its legal requirements, including but not limited to under the applicable Local 1874 MOUs and the FLSA during this time period (“Release”).
6. Release of Unknown Claims. For and in consideration of the conditions stated herein, each Party and its respective agents, heirs, legal representatives, attorneys, successors, and assigns, hereby irrevocably and unconditionally release, acquit and forever discharge each other Party, and each other Party’s employees, consultants, contractors, respective agents, attorneys, successors, and assigns, individually and collectively, from any and all lawsuits, claims, actions, demands, causes of action, damages, costs, fees, and disputes of any kind, nature, and character, known or unknown, past, present or future, which each Party has, or might have, against each other Party arising out of or in any way connected with the matters to which this Settlement Agreement applies, as described in the recitals above. Without limiting the foregoing, each Party expressly waives the provisions of California Civil Code section 1542, which provides as follows:
A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
Local 1874 and its members acknowledge that they understand the effect of this waiver pursuant to California Civil Code sec. 1542, and that they are represented and have been advised of this release by their legal counsel.
Local 1874 (and on behalf of all members) initials:____ 4 7. Voluntary Agreement. The Parties respectively understand and agree to this Agreement, and the terms and conditions contained herein, and enter into this Agreement knowingly and voluntarily. Employees have been represented by both legal counsel and Local 1874 representatives with respect to this Agreement, including the Release.
Employees acknowledge the right to have this Agreement supervised or approved by the Department of Labor and decline to have this Agreement reviewed or approved per 29 U.S.C. section 216(c). By signing this document, the Parties, and each of them, signify their full understanding, agreement, and acceptance of the Agreement.
8. Entire Agreement. This Agreement contains the entire agreement of the Parties regarding the subject matter of this Agreement and shall constitute the final understanding between the Parties hereto. All prior discussions, meetings and negotiations made or which have occurred prior to the date of this Agreement are merged into this Agreement.
9. Applicable Taxes. Except for the terms of this Agreement, the Parties, respectively, have not relied upon any statement or representation, written or oral, made by any Party, or any of their respective agents, attorneys or any other person, regarding any matter including, but not limited to, the federal or state income tax consequences of the Agreement to any Party. The Parties expressly acknowledge and agree that the only advice they have relied upon, if any, is the advice of their own attorneys and/or accountants as to the tax and benefit consequences of the Agreement.
10. Non-Assignment. The Parties warrant that they have not assigned any of the claims or portions of the claims that are the subject of this Agreement.
11. Unanticipated Consequences. The Parties recognize, agree to, and acknowledge, that factors that have induced them to enter into this Agreement may turn out to be incorrect or to be different from what they had previously anticipated, and the Parties hereby expressly assume any and all of the risks thereof and further expressly assume the risks of waiving the rights provided by California Code of Section 1542.
12. Non-Precedential. The Parties agree that the terms of this Agreement will not establish any precedent, nor will this Agreement be used as a basis by the Parties to seek or justify similar terms in any subsequent case and it may not be used by anyone else to seek to justify similar terms in any subsequent case, claim, grievance, or matter.
13. The Parties shall act in good faith and use their reasonable good faith efforts after the execution of this Agreement to ensure that their respective obligations hereunder are fully and punctually performed. The Parties shall promptly perform any further acts and execute and deliver any other documents or instruments that may be reasonably necessary to carry out the provisions of this Agreement.
14. Applicable Law and Venue. The settlement and this Agreement shall be interpreted in accordance with the laws of the State of California and applicable Federal law. Any claim arising out of this Agreement shall be venued in the state and federal courts of San Joaquin County, California.
5 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A photocopy, PDF, or facsimile transmission of the Agreement, including signatures, shall be deemed to constitute evidence of the Agreement having been executed.
16. No-Fault Agreement. The Parties agree this is a “no fault” settlement agreement, and this Agreement may not be used as a basis by the Parties or anyone else to seek or justify similar terms in any subsequent case.
17. Authority to Execute. Each Party hereto warrants to the other Party or Parties that he, she, they, or it has the full power and authority to execute, deliver, and perform under this Agreement.
18. Partial Invalidity. The invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provision of this Agreement.
19. This Agreement shall become effective for each Employee immediately following execution by the City, Local 1874 and all affected Employees, on the latest date of execution appearing below. No monies shall be paid out under this Agreement until the Agreement is executed by all signatories and approved by the City Council.
20. Entire Agreement. This Agreement constitutes the entire agreement between the Parties. No other promise or inducement has been offered for this Agreement. Any amendments to this Agreement must be in writing, signed by the duly authorized representatives of the City and Local 1874, and must state that the Parties intend to amend the Agreement.
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6 FOR THE CITY OF MANTECA
Dated: July ___, 2024 ___________________________________ Toni Lundgren, City Manager
APPROVED AS TO FORM
Dated: July ___, 2024 ___________________________________ L. David Nefouse, City Attorney
FOR LOCAL 1874
Dated: July ___, 2024 ___________________________________ Brad Schemper, President
APPROVED AS TO FORM
Dated: July ___, 2024 ___________________________________ Taylor Davies-Mahaffey, Mastagni
Holstedt, A.P.C.
[All employee signatures]