24 Hour Fitness, San Ramon, CA, has been at the center of two legal matters of late: a case involving overtime pay for its employees and a ruling by the National Labor Relations Board (NLRB).
Last Thursday, current and former employees of 24 Hour asked a California federal court to approve a $17.5 million settlement in a class-action lawsuit involving overtime pay, according to Law360.com. The settlement would resolve a case that centered on where the company could arbitrate individual disputes, the website reported.
The proposed settlement amounts to more than $20,000 for each of the 862 plaintiffs in the case (Beauperthuy et al v. 24 Hour Fitness USA Inc. et al), which was filed in 2006 against 24 Hour and Sports & Fitness Clubs of America Inc., making claims based on the Fair Labor Standards Act on behalf of non-California managers and personal trainers. The trainers alleged that 24 Hour required them to work off-the-clock and failed to pay them overtime, according to the Law360.com report, while the managers claimed that they were misclassified as exempt employees and also were owed overtime.
In a separate case, 24 Hour recently appealed a ruling made last November by an administrative law judge with the NLRB. Judge William J. Schmidt ruled that 24 Hour committed unfair labor practices by maintaining and enforcing a mandatory arbitration agreement for its new hires that waved their rights to participate in collective or class-action lawsuits or arbitrations with 24 Hour—a violation of the National Labor Relations Act—and prohibiting employees from discussing their claims with co-workers. Schmidt ordered 24 Hour to remove the prohibition against class or collective actions from its employee handbook and to notify all employees of the change.
In a brief filed last Thursday, 24 Hour states its employment agreement is lawful under the act because the agreement is not a mandatory condition of employment. 24 Hour pursued enforcement of the individual arbitration clause in at least eight lawsuits filed by employees at several California facilities alleging discrimination and wage and hour violations, according to the NLRB.
24 Hour declined comment on both cases.