Life Time Fitness, Chanhassen, Minnesota, and a group of 186 trainers from the company's California clubs have asked an Illinois federal judge to approve a two-part $940,000 settlement that will bring an end to months of litigation over allegedly unpaid wages.
According to Northern District of Illinois court documents, 135 trainers will split a $700,000 class action settlement, while another 51 trainers will split $100,000. Life Time will also pay $140,000 in legal fees.
The trainers alleged they were exclusively paid on commission as exempt Life Time Fitness employees, despite logging additional hours cleaning, completing classes and conducting client assessments. If their commission earnings were not at least one-and-a-half times the minimum wage, the difference was paid to the trainers through a "draw" system and later subtracted from a separate paycheck. According to the trainers' complaint, the "draws" were taken from their managers' paychecks in the form of a penalty.
This prompted managers to threaten trainers with termination, the complaint claimed, unless they only clocked in when directly working with clients.
For their claims, the trainers' cited violations of the federal Fair Labor Standards Act, the California Labor Codes and Business and Professions code, the Illinois Minimum Wage Law and the Illinois Wage Payment Collection Act.
Life Time Fitness attorney Eric Magnus told Law360 the settlement was reached only to avoid further litigation.
“We certainly deny any unlawful pay practices," he said.
When contacted by Club Industry, a spokeswoman with Life Time Fitness said the company had no further comment on the settlement at this time.
Plaintiff attorney Michael Louis Fradin also did not immediately respond to a request for comment.
In November 2016, Life Time Fitness reached a settlement with the United States Department of Labor to pay $976,000 in back wages and damages to 15,909 of its employees after allegedly violating minimum wage laws.
Life Time Fitness ranked No. 2 on Club Industry's Top 100 Health Clubs of 2017 list with $1.475 billion in 2016 revenue.