A classification error that will result in the payment of nearly $1 million in back overtime to firefighter captains, police sergeants and other city employees was based on a ruling in a prior lawsuit, Lawrence city officials say.

The city announced in a news release last week that following both an outside and an internal review, the city determined it had misclassified certain positions as not eligible for overtime when they actually were eligible. As a result, the city agreed to qualify those positions for overtime and pay back overtime totaling $998,600 to 21 fire captains, 24 police sergeants and three city planners.

Assistant City Manager Casey Toomay said in an email to the Journal-World this week that the city had long considered fire captains and police sergeants, who she said have relatively similar duties, exempt employees under the Fair Labor Standards Act. Toomay said the city made that determination by relying on a 2004 federal court decision, which held that Lawrence police sergeants were exempt employees as a matter of law. An exempt employee is not eligible for overtime pay, while nonexempt employees are eligible for overtime pay.

As the Journal-World reported at the time, a group of police sergeants filed a lawsuit against the city in 2003, claiming that they were wrongfully denied overtime pay. The city, however, argued that the sergeants — as executives and administrative employees within the meaning of the Fair Labor Standards Act — were exempt and not entitled to overtime pay. Ultimately, the U.S. District Court for the District of Kansas dismissed the lawsuit. Magistrate Judge Gary Sebelius wrote in his decision that it was clear to the court that the sergeants performed management duties within the meaning of the FLSA executive exemption.

Because of the relatively similar duties of fire captains and police sergeants, Toomay said the city relied in good faith upon the court’s judgment and reasoning in determining the exempt status of fire captains. However, Toomay noted that in the same year as the court’s ruling, the Department of Labor proposed new regulatory guidance amending the way exemption determinations are applied to first responders.

Toomay said the city continued to rely on the court’s ruling because although they both occurred in December 2004, the court’s judgment had occurred after the final adoption of the new regulation. However, Toomay said that in the last decade, the federal courts began to consider the Department of Labor’s regulation and in large part approved of its guidance.

The city reconsidered the classification of police sergeants and Lawrence-Douglas County Fire Medical fire captains following a request from the captains in 2019. The captains requested a formal FLSA review of their exempt status, thinking that the city had overlooked a change in FLSA standards.

Human Resources Director Lori Carnahan told the Journal-World that the city had already begun an FLSA review of selected city positions and added the fire captains to the review as a result of their request. Carnahan said that the city worked with third-party attorneys in the review and came to the conclusion that the captains were indeed entitled to overtime pay. Carnahan said that determination prompted the city to reconsider the classification of police sergeants, as well. She said while both fire captains and sergeants are “clearly supervisors,” the positions fall under an exception for first responders when it comes to overtime pay.

International Association of Fire Fighters Local 1596 Vice President Aaron Payne said in an email to the Journal-World that the union was pleased to see the change and thanked the city for voluntarily making the correction to the captains’ classification.

“It is encouraging to see that the City took their request seriously and has acknowledged the mistake,” Payne said.

Payne noted that the request was made directly by the fire captains, and that the union only worked in a support role for them. However, Payne said that the union thinks the mistake would have been identified and corrected much earlier if captains were allowed to discuss their pay and benefits through collective bargaining like other LDCFM employees.

As the Journal-World previously reported, the union sought to change the local resolution governing city employee unions to allow for its union contract to also cover fire captains, arguing that they had limited supervisory duties and worked in the same conditions as union employees. The city denied the change, arguing that captains were supervisors and that having them in a bargaining group with the staff they supervised would create a conflict of interest.

The city previously stated in the news release that it corrected the classification error in late 2019 by converting both captains and sergeants from exempt to nonexempt, and the reclassification took effect in early 2020. During the review process, it was also discovered the three planners had been misclassified for different reasons. Payments to affected employees will be made on April 16.

A representative of the Lawrence Police Officers Association did not immediately respond to a request for comment about the reclassification on Friday afternoon.