The Kaweah Delta Health Care District has agreed to settle a class action suit brought on behalf of more than 6,000 current and former employees who claim the district underpaid them for years. The settlement will cost the district more than $500,000.
Employees from 2019 to 2024 in Payout
Included in the class are all of the district’s employees who worked from October 19, 2019 to June 27, 2021, and any employee who was on-call from October 19, 2019 to November 19, 2024. The class action suit represents 6,180 people who were employed by the district during these times. The lawsuit’s initial complaint was filed on April 3, 2023.
The plaintiffs allege that during these periods Kaweah Health required employees to work off-the-clock during lunch breaks, rounded down the hours employees worked, and that it failed to pay employees while they were on-call. Employees also said they were required to attend lengthy training sessions but were only paid for one hour.
The district has agreed to a $475,000 payment to settle the case. Kaweah also agreed to pay the state Labor and Workforce Development Agency $37,500 in civil penalties, as well as applicable employee taxes. The district admitted no wrongdoing in agreeing to settle the case against it.
The amount each employee will receive as compensation will vary depending on the length of employment and their rates of pay. The two primary plaintiffs — Mayra Diaz and Robert Villareal — will receive an additional $5,000 each.
Payouts Begin After Final Court OK
Employees who expect to receive compensation should have already gotten a notice from Phoenix Class Action Administration Solutions, who will process the payments when they begin.
Parties in the suit received tentative approval of the settlement in November of 2023. Final approval of the settlement and its terms is scheduled at 8:30 a.m. on May 13 in Department 2 of the Tulare County Superior Court before Judge Bret Hillman. No payouts can be made before the court’s final approval.
Of the settlement amount, $105,273.75 — including $15,000 for “class counsel’s costs” — will go to the plaintiffs’ attorneys. Plaintiffs were represented by Daniel Gains, Alex Katofsky and Evan Gains of the Westlake Village-based law firm Gains & Gains; and Joseph Tojarieh of the Los Angeles-based law firm Stonebrook Law. Phoenix, the settlement administrator, will receive $32,500.
The $37,500 in civil penalties paid to the state represents 75% of a larger amount. The remaining 25% of penalty funds goes to the plaintiffs, who acted as representatives of the state Attorney General under the provisions of the Private Attorney Generals Act of 2004 (PAGA). PAGA allows private individuals to sue on behalf of the state attorney general in certain labor matters.
Both parties agreed not to announce the settlement publicly or speak about it to the media.
Plaintiffs Satisfied with Settlement Terms
To ensure the main plaintiffs in the case — Diaz and Villareal — were OK with the way their case was settled, both were required to file statements with the court to that effect. Both statements, though signed separately by Diaz and Villareal, are virtually the same.
“I am very happy about the results of this litigation,” their statement read. “I am satisfied that the defendant is compensating class members for unpaid wages, penalties and interest that I believe we are due.”
Both statements then describe the number of hours each primary plaintiff spent researching their employment history and contact with their former employers. The pair will be compensated additionally for that work.
The plaintiffs’ statements also explain the reasoning behind the lawsuit against Kaweah Delta Health Care District. Money wasn’t the driving factor, they said.
“By bringing this lawsuit, and throughout its course, I have put the interests of the class ahead of my own,” the statement stated. “I understood that I could possibly earn a small enhancement payment if this case resolved itself favorably, but always knew that I could also be responsible for paying (the) defendant’s attorneys’ fees and costs if it did not. My goal in bringing this lawsuit was to obtain a recovery on behalf of the class, and even more importantly, to put an end to what I believed were illegal practices on the part of (the) defendant.”
The statement also makes clear that Diaz and Villareal were aware of the danger to their reputations challenging Kaweah Delta could present.
“This lawsuit will almost certainly result in reputational harm to me. There is a stigma associated with suing anyone, let alone your former employer,” the pair believes, according to the statement filed with the court. “I will probably be adversely affected when it comes to obtaining future employment – employers who learn that I sued Defendant in a class action will likely avoid hiring me.”
The amount of individual payouts will be determined by a complex formula based on the number of weeks each of the 6,180 affected employees worked during the time periods described in the suit. Different subdivisions of the class of plaintiffs — those whose pay hours were rounded down, and those who were underpaid for time on-call — will receive a portion based on several additional factors.
The settlement was signed by Kaweah CEO Gary Herbst on August 11, 2024. Diaz and Villareal agreed to the settlement terms days earlier. It was accepted and approved by the court on October 22, 2024.
Not the First Time Kaweah Health Settled a Labor Action
This appears to be at least the second time Kaweah Delta Health Care District has found itself defending its pay practices. It also appears this is the second time it has settled out of court to end a labor lawsuit.
In 2021, Quail Park at Cypress was a defendant in a similar suit. Employees claimed improper compensation for meals, as well as inappropriate rounding of work hours and calculation errors in wage statements and paychecks. At the time the matter was settled, the district owned 44% of Quail Park at Cypress and the associated Memory Care Center. The district and its partner — Living Care Senior Housing — shared equal voting rights on the two facilities’ boards of directors.
A mediated settlement, which was to be paid out in 2022, cost Quail Park $721,287, according to the minutes of a September 2021 meeting of the Kaweah Delta Health Care District’s Finance, Property, Services and Acquisition Committee. The same report said the district had so far received $10,815,571 from the partnership. The district’s initial investment was $1,588,770. Of that $900,000 was land donated by the district. The remainder was a cash payment of $688,770.
The report did not state how many employees were included in the class action suit.
Racial Discrimination Case Dropped
Kaweah Health also faced a lawsuit that alleged racial discrimination in the firing of Gail Robinson, a former health information manager for the district. Robinson worked for the district from September 2019 to October 2022. That suit has been dismissed with prejudice, meaning it cannot be refiled.
After leaving the district, Robinson claimed she experienced poor treatment from her supervisors and fellow employees because of her race. She was the only black person in her department.
Robinson also alleged she had witnessed and reported to her supervisors repeated safety violations, Medicare and documentation fraud, improper medical practices, and inappropriate disclosure of medical records with identifying patient information.
The case was dismissed on February 22, 2024.