USF Pays $3.8M Settlement Over Labor Law Violations

Case Background

The University of San Francisco faced a significant legal challenge when two former employees, Dan Beck and Bienvenida Salazar, stepped forward to represent a large group of workers. These individuals alleged that the prestigious institution systematically violated California labor laws over a period of several years. The Plaintiffs worked in non-exempt roles, meaning they were entitled to specific protections regarding overtime pay and mandatory breaks. They claimed that the University failed to honor these basic workplace rights for hundreds of employees who kept the campus running.

The lawsuit began in early 2021 and moved through the San Francisco County Superior Court. It quickly grew into a class action, a type of lawsuit where a few people represent the interests of a much larger group. In this instance, the "class" included all non-exempt employees who worked for the University in California during the timeframe specified in the legal complaint. The core of the dispute focused on how the University tracked time, calculated paychecks, and managed the daily schedules of its workforce. While the University initially fought the allegations, the parties eventually engaged in intense negotiations to resolve the matter before a full trial could disrupt the school's operations or further delay payments to the workers.

Cause

The primary cause of this legal action was the University’s alleged failure to implement a payroll system that accurately accounted for all hours worked. Specifically, the Plaintiffs pointed to a failure to include all forms of compensation, such as bonuses or other incentives, when calculating the "regular rate of pay" used for overtime. This technical error meant that whenever an employee worked more than eight hours in a day or forty hours in a week, they received less money than the law required. Additionally, the University allegedly failed to provide the legally mandated meal and rest periods, often requiring staff to work through their breaks without extra compensation.

Injury

The employees suffered direct financial harm because of these practices. By missing out on proper overtime rates and the extra hour of "premium pay" required for missed breaks, many workers saw their take-home pay fall short of what they earned. Beyond the missing wages, the workers argued they were deprived of necessary rest time, which is designed to prevent exhaustion and ensure workplace safety. The lack of accurate pay stubs also left many employees confused about how their pay was calculated, making it difficult for them to verify if they were being cheated or paid fairly for their labor.

Damages Sought

In their complaint, the Plaintiffs asked for several types of financial recovery. They sought the payment of all unpaid wages, including overtime and minimum wage shortfalls. They also demanded "waiting time penalties," which California law applies when an employer fails to pay all final wages immediately after a person leaves their job. Furthermore, the lawsuit requested statutory penalties for inaccurate wage statements and a significant amount under the Private Attorneys General Act (PAGA), which allows employees to sue for civil penalties on behalf of the state’s labor department. Interest on the unpaid amounts and the coverage of their legal fees were also central to their demands.

Key Arguments and Proceedings

The legal battle involved a series of filings and hearings where both sides presented their versions of the truth. Judge Ethan P. Schulman oversaw the proceedings in Department 304. The process involved "discovery," where both sides exchanged thousands of pages of payroll records and internal policies. The Plaintiffs used this data to build a mathematical model of how much money was allegedly missing from employee pockets. The University, meanwhile, scrutinized the same data to argue that any errors were minor and did not represent a university-wide policy of neglect.

Legal Representation

Plaintiff(s): Dan Beck | Bienvenida Salazar.

·       Counsel for Plaintiff(s): Julian Hammond | Polina Brandler | Ari Cherniak | Morris J. Baller

Defendant(s): University of San Francisco.

·       Counsel for Defendant(s): Michael J. Vartain | Ross J. Vartain | Allan J. Gomes

Key Arguments or Remarks by Counsel

The lawyers for the employees argued that the University enjoyed the benefits of their hard work without following the mandatory rules for compensation. They emphasized that labor laws are not optional suggestions, but strict requirements intended to protect the dignity and financial stability of workers. During the fairness hearing, the Plaintiffs' counsel highlighted that the settlement would provide meaningful relief to workers who had been waiting years for justice. On the other side, the University’s defense team maintained that they always acted in good faith. They argued that the complexity of California labor law makes it easy for even well-intentioned institutions to face technical challenges, but they ultimately agreed that a settlement was the best way to move forward and support their community.

Claims

The legal complaint listed several specific violations that formed the backbone of the case.

Overtime Pay Violations The Plaintiffs argued the University violated California Labor Code sections 510 and 1194. They alleged the school did not pay the full "time-and-a-half" rate for hours worked beyond the standard shift. The main issue was the "regular rate" calculation, which failed to include non-discretionary pay items, effectively lowering the overtime rate for everyone.

Meal and Rest Period Failures Under California law, workers are entitled to a thirty-minute unpaid meal break and ten-minute paid rest breaks. The Plaintiffs claimed the University routinely failed to provide these or failed to pay the "premium" hour of pay required when a break is missed. They argued the campus culture often forced workers to remain on duty or reachable even during their supposed downtime.

Inaccurate Wage Statements The law requires employers to provide clear pay stubs that show total hours worked, all hourly rates, and the name of the legal employer. The lawsuit alleged the University's pay stubs were confusing and missing key information, which made it nearly impossible for employees to spot the underlying pay errors.

Failure to Pay Wages at Termination When an employee leaves a job, the employer must pay all earned wages immediately or within 72 hours. The Plaintiffs alleged that because the University's underlying pay calculations were wrong, the final checks given to departing employees were also short, triggering "waiting time" penalties that can equal up to thirty days of pay.

Defense

The University of San Francisco filed a robust answer to the complaint, denying almost every allegation. They argued that they paid their employees correctly and provided all required breaks. Their defense team suggested that if any errors occurred, they were isolated incidents rather than a systemic failure. They also raised several "affirmative defenses," claiming that some of the workers' claims were barred by the statute of limitations or that the Plaintiffs had failed to follow the proper administrative procedures before filing the lawsuit. They maintained that the University's policies were designed to comply with the law and that any deviations were unintentional.

Settlement

After years of litigation, the parties reached a resolution that avoided the uncertainty of a trial. The Court reviewed the evidence and the proposed agreement, ultimately finding it fair and reasonable for everyone involved. Judge Ethan P. Schulman signed the final order on February 14, 2025, bringing the long-running dispute to a close.

The total value of the resolution reached $3,888,888.

This multi-million-dollar sum was designed to cover several different needs. A significant portion was set aside to pay back the hundreds of employees for their lost wages and the penalties they were owed under the law. Another portion was dedicated to the State of California as part of the PAGA penalties. The Court also approved payments for the legal teams who spent years working on the case, as well as service awards for Dan Beck and Bienvenida Salazar for their roles as the lead Plaintiffs who took the risk of suing their employer.

The final order ensured that the University would distribute the funds through a third-party administrator to make sure every eligible worker received their fair share. The judge noted that the settlement was a good result because it provided "certainty" and "immediate recovery" for the workers, rather than leaving them to wait through years of potential appeals. With the signing of the order, the University of San Francisco officially closed this chapter of its history, and the workers finally received the compensation they had fought to secure.

Court documents are available upon request at jurimatic@exlitem.com