24 Hour Fitness Reaches $17.4 Million Settlement in Overtime Case

A United States district judge has approved a $17.4 million settlement in a case stemming from a class-action lawsuit against 24 Hour Fitness, San Ramon, CA, involving overtime pay.

Judge Samuel Conti approved the settlement in a filing last week in U.S. District Court, Northern District of California. Courthouse News Service reported the settlement Thursday.

In the settlement, each of the 862 claimants will receive $20,000. The court also approved attorneys' fees of nearly $5.5 million and legal fees of more than $1 million from the settlement amount.

24 Hour Fitness said it decided to settle the case "due to the high costs and uncertainties of ongoing litigation."

"While this litigation concerned events from several years ago, we have always maintained that our team members were paid correctly," the company said in a statement released to Club Industry. "Our focus remains on helping our members reach their fitness goals and working with all our team members to make 24 Hour Fitness a great place to work."

Current and former employees of 24 Hour Fitness asked the court to approve the settlement in February. The proposed settlement was preliminarily approved by the court on April 22, and a fairness hearing was conducted last Friday, according to a court document.

Of the 862 claimants, 851 signed individual releases approving the settlement.

"The reaction of the plaintiffs to the proposed settlement strongly supports the conclusion that the proposed settlement is fair, reasonable, and adequate," Conti wrote. "Accordingly, the court hereby grants final approval of the settlement and orders the parties to comply with the terms of the settlement agreement."

The class-action lawsuit, Beauperthuy et al v. 24 Hour Fitness USA Inc. et al, was filed on Feb. 1, 2006. Gabe Beauperthuy and other plaintiffs made claims on behalf of non-California managers and personal trainers that 24 Hour violated the Fair Labor Standards Act. The trainers alleged that 24 Hour required them to work off-the-clock and failed to pay them overtime while the managers claimed that they were misclassified as exempt employees and also were owed overtime.

Courthouse News Service reported 24 Hour sales staff also had claimed in the case that they were illegally classified as exempt from overtime pay.

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