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Item 8EAGENDA ITEM # 8E JULY 13, 2009 CITY OF ATLANTIC BEACH CITY COMMISSIONER MEETING STAFF REPORT AGENDA ITEM: Settlement Agreement and Back Pay Award SUBMITTED BY: George Foster, Human Resource Manager (~ DATE: July 7, 2009 BACKGROUND: In June 2005 a Police Officer was terminated and subsequently filed a grievance pursuant to the Collective Bargaining Agreement. During the grievance process, the arbitrator found that the employee was guilty of the misconduct and inappropriate use of farce while affecting an arrest; however, the arbitrator determined that termination was an inappropriate punishment and directed that the employee be reinstated. The City did not agree with this decision and the Union petitioned the circuit court for reinstatement while the City filed a counterclaim and motion to vacate the arbitrator's decision, alleging that the arbitrator exceeded his powers under the Collective Bargaining Agreement. The circuit court grained the City's motion whereupon the Union appealed to the First District Court of Appeal where the circuit court's ruling was reversed. The employee was reinstated in July 2008. After negotiations, a tentative settlement agreement has been reached for $245,000 and reinstatement of 224.59 hours of Personal Leave. BUDGET: Funds of $251,989.97 which include the City's benefit costs ($6,989.97) for this action are included within the submitted budget ordinance. RECOMMENDATION: City Commission approve the settlement agreement, related budget ordinance and authorize the City Manager to sign the final settlement agreement. ATTACHMENT: 1. Settlement Agreement REVIEWED BY CITY MANAGER: AGENDA ITEM # 8E NLY 13, 2009 SETTLEMENT AGREEMENT AND GENERAL RELEASE This Settlement Agreement and General Release (the Settlement Agreement) is made and entered into by VICTOR L. RAYNOR (hereinafter "RAYNOR") and the CITY OF ATLANTIC BEACH, FLORIDA, a municipal corporation (hereinafter "CITY"). DEFINITIONS A. As used in this Settlement Agreement and General Release, the term "RAYNOR" shall mean VICTOR L. RAYNOR, as well as his heirs, executors, administrators, personal representatives, successors and assigns, singular or plural, where ever the context so admits or requires. B. As used in this Settlement Agreement and General Release the term "CITY" shall mean City of Atlantic Beach, Florida, as well as its past and present officials, commissioners, officers, directors, employees, boards, agents and attorneys, in both their individual and official capacities, jointly or severally, singular or plural, where ever the context so admits or requires. RECITALS WHEREAS, RAYNOR was terminated from his position as a police officer in June 2005 and subsequently filed a grievance pursuant to the CITY's collective bargaining agreement (CBA) between the City and Fraternal Order of Police, Florida State Lodge, Inc. (dated October 1, 2004 through September 30, 2007). The grievance proceeded through the grievance procedure and was heard by arbitrator Stanley Sergent in April 2006. On June 22, 2006, Sergent issued his opinion and award, which determined RAYNOR should be reinstated and made whole. The CITY appealed this decision to the Circuit Court in and for Duval County, Florida, but ultimately, during a review of the arbitrator's decision at the First District Court of Appeal, the Court upheld the arbitrator's decision to reinstate RAYNOR and make him "whole." The parties have an ongoing disagreement as to the amount of specific consideration to make RAYNOR whole, but have agreed to a settlement as recorded in this settlement agreement and release to avoid further attendant costs of litigating this issue. Specifically, the i AGENDA ITEM # 8E JULY 13, 2009 parties have agreed to a monetary amount comprising back pay, benefits, and other payments to RAYNOR. WHEREAS, RAYNOR and CITY have entered into good faith settlement negotiations resulting in this Agreement. The purpose of this Agreement is to settle and compromise any and all prior and existing disputes, claims and controversies between the parties, without any future costs and expenses of litigation and to bar any and all future disputes claims and controversies between the parties which may arise out of any conflicts or events, known or unknown, that have occurred up to the date of the execution of this Agreement, including but not limited to those which relate directly or indirectly to RAYNOR's employment with the CITY; and WHEREAS each party believes settlement of this dispute is in their mutual best interest and acknowledge and agree that settlement of this claim does not constitute an admission of liability or responsibility on the part of the CITY; and WHEREAS the parties desire to memorialize their Agreement. NOW THEREFORE, in consideration of the mutual covenants to be performed by each of the parties hereto and set forth in their entirety herein, the parties agree as follows: 1. Agreement A. Release and Discharge In consideration for the payments and other good and valuable consideration set forth in Raragraph (2) below, RAYNOR agrees, upon receipt of the consideration due hereunder, and further hereby agrees to release, acquit, and forever discharge CITY of and from any and all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, claims far attorneys' fees, interest, or costs, executions, claims and demands whatsoever, in law or in equity, of whatever nature, which RAYNOR ever had, now has, or which 2 AGENDA ITEM # 8E JULY 13, 2009 any personal representative, successor, heir or assign of RAYNOR, hereafter can, shall or may have against CITY by reason of any matter, cause or thing, occurring prior to the date of this Agreement, including but not limited to those claims or demands which arise out of or are related to RAYNOR's employment with the CITY. RAYNOR acknowledges and agrees that this is a General Release of any and all claims, including but not limited to claims, grievances or charges for wages, salary, back pay, front pay, and any and all employment benefits of any nature whatsoever; of breach of employment agreement or contract; defamation, including slander or libel; battery; assault; employment discrimination, including age, race, sex, religion, or natural origin discrimination; hostile work environment; discrimination based upon actual or perceived disability or other protected characteristics; retaliation; workers' compensation, or the violation of any administrative, local, State or Federal Constitution, statute, rule, regulation, ordinance or law. RAYNOR acknowledges that he is aware of nv facts or circumstances which would give rise to a claim against the CITY for the following but nonetheless specifically waives, releases, acquits, and forever discharges any claims, actions, right of action whatsoever he may have against the CITY, under the United States Constitution, the Florida Constitution, Title VII of the Civil Rights Acts of 1964, the Civil Rights Act of 1991, 42 U.S.C. § 1983, § 1985, § 1988, the Age Discrimination in Employment Act (ADEA), the Florida Human Rights Act, the Florida Civil Rights Act of 1992 (§§ 760.01-760.11 and 509.092, Fla. Stat.), the Americans with Disabilities Act (42 U.S.C. § 12132 et. seq) the Florida Whistle Blower Act (§ 112.3187 et. seq. Fla. Statutes), the Florida Workers' Compensation Act, Unemployment Compensation, § 119.07, Fla. Stat., including attorneys' fees or costs, or any other state, federal or administrative rule, statute, ordinance or law of any nature relating to employment. B. RAYNOR acknowledges and agrees that the Release and discharge set forth above is a General Release of all claims. RAYNOR expressly waives and assumes the risk of any and all claims, disciplinary disputes or grievances, in law or in equity, which exist as of this date, but of which RAYNOR does not know or suspect to exist, whether through ignorance, oversight, error, negligence, or otherwise and, which, if known, would materially affect RAYNOR's decision to 3 AGENDA ITEM # 8E JiJLY 13, 2009 enter this Settlement Agreement. RAYNOR further agrees that he has agreed to accept payment of the sum specified herein as a complete compromise of matters involving disputed issues of law and fact. RAYNOR assumes the risks that the facts or law may be other than he currently believes or understands. C. It is understood and agreed by the parties that this settlement is a compromise of a litigated and disputed claim and neither this Agreement, nor any consideration to be paid hereunder shall be construed as an admission by the CITY of any unlawful, tortious or wrongful acts whatsoever towards RAYNOR. 2. Consideration A. Inconsideration of the General Release set forth above, RAYNOR was reinstated to his former position of employment on July 28 2008, and the CITY agrees to pay to RAYNOR the sum as outlined below. B. Consideration in the amount of TWO HUNDRED FORTY-FIVE THOUSAND DOLLARS ($245,000.00), comprising two separate checks made payable to VICTOR L. RAYNOR. The first check, in the amount of $177,473.44 (first payment) will be issued to RAYNOR via the CITY's payroll system for reimbursement of wages and salary. The second check, in the amount of $67,526.56 (second payment) will be issued to RAYNOR via the CITY's vendor payment system. The total consideration to RAYNOR (first and second payments) will represent complete and total satisfaction of the arbitrator's determination that RAYNOR be reinstated and made "whole". i. The parties acknowledge and agree that the first payment set forth in subsection (B) above does constitute wages or salary to RAYNOR, and accordingly the CITY will take payroll deductions, withholding, employee pension contributions or other deductions from said payments, will make payment of appropriate payroll taxes, and will report said income to the Internal Revenue Service as reimbursement far wages of salary. The City shall utilize the IRS standard tax table for the 4 AGENDA ITEM # 8E JULY 13, 2009 first payment. RAYNOR shall have the option to complete an IRS Form W-4 to increase or decrease taxes withheld; however, in no case shall the City withhold less than that required by law. ii. The parties acknowledge and agree that the second payment set forth in subsection (B) above does not constitute wages or salary to RAYNOR, and accordingly the CITY will not take payroll deductions, withholding, employee pension, contributions or other deductions from said payments, will not make payment of appropriate payroll taxes, and will not report said income to the Internal Revenue Service as reimbursement for wages of salary. The second payment of said amounts will be reported by the CITY to the Internal Revenue Service by way of issuance of a 1099 reflecting the payment. C. Further, RAYNOR and the CITY agreed that as additional consideration, RAYNOR will be credited with 224.59 hours of personal leave. RAYNOR will have the option to "purchase back" an additional 727.73 hours of personal leave at $22.38 per hour, and any amounts .purchased back will be deducted from the total payroll payment made in the first check under Section 2.B. D. Contingent upon approval of the City of Atlantic Beath Police Officer Pension Board, the parties agree to the terms and conditions set forth in Attachment A. E. It is further agreed and understood that future tax liabilities, if any, including penalties and interest, which may be incurred by RAYNOR or CITY in association with said payments will be the sole responsibility and liability of RAYNOR, and RAYNOR agrees to indemnify and hold harmless CITY for any additional tax liability which may arise from said payments. Said tax liability shall not be a ground for avoiding or setting aside this Settlement Agreement. 3. Severability 5 AGENDA ITEM # 8E JULY 13, 2009 If any clause or provision of this Agreement is found to be void, invalid, or unenforceable, it shall be severed from the remaining provisions and clauses which shall remain in full force and effect. 4. Governing Law The parties hereto agree that the law of the State of Florida shall govern this Agreement and all respects in the event any action must be instituted for breach of this Agreement, the parties agree that the sole venue shall be Duval County, Florida. S. Miscellaneous A. Each of the parties expressly agree, acknowledge and warrant that they have read carefully and fully understand all provisions of this Agreement and that they are entering into this Agreement of their own free will and with the advice of their respective attorneys. Each party represents that they are voluntarily entering into this Agreement with the intent to be bound thereby and they have not been coerced or induced by anyone to enter into this Agreement. The parties acknowledge that they have read and fully understand the Agreement's terms, conditions, meaning and intent, including but not limited to the final binding effect of the General Release. B. This Agreement constitutes the entire agreement between the parties, and no other promises or agreements shall be binding unless signed by all parties. All prior representations regarding the Agreement are hereby expressly disclaimed by all parties unless incorporated herein. C. All parties shall take such further action and shall execute and deliver such further documents as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Agreement. D. The recitals are incorporated herein by reference. 5 AGENDA ITEM # 8E JULY 13, 2009 VICTOR L. RAYNOR STATE OF FLORIDA COUNTY OF The foregoing was acknowledged before me this day of , 2009, by VICTOR L. RAYNOR, who is personally known to me or who has produced as identification and who did/did not take an oath. Notary Public My Commission Expires: 7 AGENDA ITEM # 8E JULY 13, 2009 AUTHORIZED REPRESENTATIVE OF CITY OF ATLANTIC BEACH STATE OF FLORIDA COUNTY OF The foregoing was acknowledged before me this day of , 2009, by who is personally known to me or who has produced as identification and who did/did not take an oath. Notary Public My Commission Expires: s SETTLEMENT AGREEMENT & RELEASE BETWEEN VICTOR RAYNOR AND CITY OF ATLANTIC BEACH ATTACHMENT "A" AGENDA ITEM # 8E JULY 13, 2009 Contingent upon approval of the City of Atlantic Beach Police Officer Pension Board, the following is hereby agreed to by the parties: Credited Service. Raynor shall be provided with Credited Service for the period of tune 7, 2005 through July 27, 2008. (Ref; Section 2-301 and Section 2-310.1, Supplement No. 36, City Code of Ordinances). Final Average Compensation (FAC). Upon retirement, the period, or portions thereof, from October 30, 2004 through July 27, 2008 may need to be utilized to determine the Final Average Compensation which is one-sixtieth (1/60th) of the aggregate amount of compensation paid during the period of sixty (60) months of the member's credited service in which the aggregate amount of compensation is greatest. If this period, or portions, of time is utilized to determine Final Average Compensation, then the following FAC shall be utilized. (Ref: Section 2-301, Supplement No. 36, City Code of Ordinances). Period From To 10/30/04 06/06/05 06/07/05 09/30/05 10/01/05 09/30/06 10/01/06 09/30/07 1OJ01/07 07/27/08 07/28/08 Retirement Final Averaee Compensation (FAC) FAC during administrative leave will be adjusted by +$ 7.92 per day FAC to be utilized during this period will be $142.12 per day FAC to be utilized during this period will be $149.12 per day FAC to be utilized during this period will be $157.35 per day FAC to be utilized during this period will be $157.42 per day FAC to be utilized during this period wilt be actual compensation paid. EmnloYee Pension Contribution. Employee will have $6,543.01 deducted from gross pay on a pre-tax basis and contributed to the Police Pension Plan for the period of 6/7/05 to 7/27/08 based upon the gross salary credit being provided and the varying pension contribution rates in affect aver this period of time. (Ref: Section 2-310.27, Supplement No. 34, City Code of Ordinances). SETTLEMENT AGREEMENT & RELEASE BETWEEN VICTOR RAYNOR AND CITY OF ATLANTIC BEACH AGENDA ITEM # 8E JULY 13, 2009 Period Number Compensation Pension Employee From Thru Davs and Benefits Rate Contributions 10/30/04 06/06/05 n/a $ 1,741.85 2.8150% $ 49.03 06/07/05 09/30/05 116 $ 16,4$5.51 2.8150% $ 464.07 10/01/05 09/23/06 357 $ 53,281.80 2.8150% $ 1,499.88 09/24/06 09/30/06 8 $ 1,148.24 3.8150% $ 43.81 10/01/06 09/22/07 356 $ 56,068.10 3.8150% $ 2,139.00 09/23/07 09/30/07 9 $ 1,365.01 4.8150'/0 $ 65.73 10/01/07 07/27/08 301 $ 47,3$2.94 4.8150% $ 2,281.49 Total: $ 6,543.01