SAN ANTONIO — Gym trainers that had filed a lawsuit against their employer have reached a $625,000 settlement.
The lawsuit was filed against Gold’s Gym by its employees claiming the company was in violation of the Fair Labor Standards Act (FLSA) for classifying the gym’s trainers as exempt employees and not paying them time and a half for hours worked over 40 hours.
In the suit, the plaintiffs, named as Daniel Casanova and Tiffany Saul on behalf of themselves and others similarly situated, sought to recover unpaid wages, unpaid overtime wages, damages, and attorneys’ fees. This was in addition to “certify the matter as a collective action” under the FLSA.
The settlement was approved by Judge David Ezra in the U.S. District Court, Western District of Texas in the amount of $625,000 and includes $260,000 for attorney fees.
Both Casanova and Saul are former trainers with Gold’s Gym that operates 41 health and fitness facilities in Texas. Casanova was a trainer as a San Antonio, Texas, facility while Saul previously worked at a Corpus Christi, Texas, location. Both plaintiffs provided personal training services to Gold’s Gym members and didn’t have half of their earnings come from commission as outlined under the FLSA.
The responsibilities of the plaintiffs and lack of commission earning didn’t classify them as exempt employees as Gold’s Gym claimed under the FLSA. They alleged they routinely worked in excess of 40 hours and weren’t compensated with overtime pay by Gold’s Gym. When Casanova brought this to Gold Gym’s attention he was informed that he was an exempt employee, which in his suit he claims was incorrect. He then sought the back pay of the past 36 months.
The court ruled in the case that because the trainers' work directly correlated to one-hour sessions, they were not exempt employees and deserved overtime wages. More than 80 trainers opted into the class action suit against Gold’s Gym.
Gold’s Gym argued that it did indeed provide a commission structure to its trainers as they received a percentage of fees that were charged to its customers. It claimed that trainers were able to negotiate fees with members and this provided an incentive to the trainers to earn more. It claimed it was exempt from the FLSA under Section 7(i).
Judge Ezra concluded that this was not a “bona fida commission” structure and that compensation was still dependent on the number or hours worked. Employees were still tied to a certain number of hours worked.
Gold’s Gym also claimed that it gave performance incentives based on how many certifications a trainer earned which would increase their training fee. Judge Ezra ruled that this was not the same as a commission arrangement and was more of a qualification-based system that incentivized a trainer to earn more an hour —still tying Gold’s Gym to an hourly payment arrangement and requiring them to payout a settlement to the trainers.
In the suit filing by Casanova and Saul, they also claimed that Gold’s Gym was in violation of FLSA for not making, keeping and preserving accurate records as to the number of hours worked each day by the plaintiffs and other personal trainers.