Council OKs $40-Million Police Overtime Settlement

The Los Angeles City Council approved the largest legal settlement in the city’s history Wednesday, agreeing to spend $40 million to resolve three lawsuits that accused the city of failing to pay Los Angeles police officers overtime.

The settlement, which was approved unanimously without public discussion, came as City Hall eyed with mounting dread the potential cost of settlements in the LAPD’s Rampart Division scandal.

In this instance, the police officers are the alleged victims. The lawsuits allege that the city of Los Angeles delayed paying its police officers overtime, shortchanged them in other circumstances and then tried to control when they took compensatory time off.

The same attorneys who sued the city recently filed a similar claim alleging that Los Angeles County deprives its sheriff’s deputies of overtime due to them under federal law.

Sources said that if the council had opted to fight the case in court, a jury could have found the city liable for $80 million to $120 million.

Gregory Petersen, the lead attorney on the case, said that when he initially met with city officials to discuss the case eight years ago, he proposed a $1-million settlement. It was rejected.

The plaintiffs dug in, contesting the city’s policy of controlling when LAPD officers were allowed to take compensatory time, of granting compensatory time in place of overtime and delaying overtime payments. The city again rebuffed Petersen’s settlement offer, the lawyer said.

“The conduct in the case was an economic approach--we’ll spend more money than you guys got,” he said.

Undeterred, the 6,300 officers dipped into their own pockets to fund the litigation. “We are pleased that the City Council has seen fit to follow federal law and issue a fair and appropriate settlement,” said Ted Hunt, the Police Protective League president.

Of the $40 million, $21.4 million is accrued penalties for the late overtime. Petersen said that sum is a direct result of the length of time it took the city to settle the matter, which stems from complaints by LAPD officers that the city was slow in paying them overtime for their work in the 1992 riots.

“They were saying, ‘We’ve got baby-sitters to pay. We’ve got child-care to pay,’ ” said Petersen.

Members of the City Council--who for weeks have been wrangling in closed session over the terms of the settlement--expressed dismay that the suit was not resolved years ago.

“I think it’s a tragedy,” said Councilman Joel Wachs. “The city council was consistently told not to worry, the city didn’t do anything wrong.

“As it turned out, we did do something wrong. There were no internal controls over the system to anticipate that we were violating the law. We have been fighting this for years, when we should have cut our losses at the beginning.”

Councilman Mark Ridley-Thomas agreed.

“It’s about time we brought this thing to a close,” he said.

Petersen blamed the chiefs of police for delaying the settlement--first Willie L. Williams and then Bernard Parks--and said that only when the City Council recently stepped in did resolution appear imminent.

Still, he said, it took a personal appearance by City Atty. James Hahn at a hearing in federal court Tuesday to iron out all the agreements in the multifaceted settlement.

The city was ordered last May by U.S. District Judge George H. King to settle the lawsuit.

LAPD spokesman David Kalish said, “The department is very pleased this issue has finally been resolved.

“This will be a fair compromise for all involved,” he said.

In a similar claim against Los Angeles County that seeks certification as a class-action case, sheriff’s deputies allege that the county discourages them from filing for overtime, routinely forcing them to work extra hours without pay. “I think there’s significantly more exposure to the county than to the city of Los Angeles,” Petersen said.

Principal Deputy County Counsel Albert Kelly said Wednesday that the county would not rule out settling the overtime case.

“There are many, many unknowns at this point in that case,” Kelly said. “It’s really just started.”

City officials say that it will cost approximately $3 million annually to implement extra provisions in the settlement, which requires them to allow officers to control when they take compensatory time and to pay all overtime in excess of 19 hours in cash rather than compensatory time. The city also agreed to spend $6 million to pay officers for excess overtime they had stored up.

The budget and finance committee will consider next week how to pay the settlement costs, which include lawyers’ fees, said the committee’s chairman, Councilman Mike Feuer.

“Any time you talk about a $40-million sum, it has an enormous impact on the city’s budget,” Feuer said. He said that the city would probably have to finance part of the settlement through a judgment bond, which may require voters’ approval.

“The system that the department and the city in the whole had in place were clearly deficient,” said Feuer, who was elected to council after the suit was filed. “The city is working very hard to put better systems in place . . . to do something as basic as pay people in a timely period.”

Combined with the upcoming negotiations with the LAPD union and the Rampart settlements--”the crocodile in the bathtub,” as Feuer described it--”there’s a lot of uncertainty in the city’s budget right now.”