Claims investigator's claim headed to trial | August 15, 2007 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - August 15, 2007

Claims investigator's claim headed to trial

Lack of overtime pay questioned, city defends its position

by Becky Trout

The city of Palo Alto's claims inspector, Casey O'Neill, has a claim against the city that has expanded into a federal case slated for trial in November.

When she filed the suit in August 2005, O'Neill originally sought to recoup unpaid overtime and challenged the city's classification of her as "exempt" from overtime according to federal labor law.

Now, however, O'Neill alleges that retaliation for the suit has continued in the form of ongoing discipline, including the elimination of 40 percent of her job in July 2006.

She is asking for at least $270,000 for lost salary and overtime wages, not including attorneys' fees or accounting for the damage to her career and personal suffering, O'Neill described in court documents.

The city, represented by San Francisco-based Littler Mendelson, maintains O'Neill's suit has numerous faults, including her failure to exhaust the city's internal processes for handling claims.

Both O'Neill and City Attorney Gary Baum declined to comment on the case.

O'Neill was hired in July 1993 as a claims investigator for 60 percent of her time and a paralegal for 40 percent. As a paralegal, O'Neill was expected to draft basic legal documents and gather information for litigation, according to a paralegal job description written by the city. As a claims investigator, O'Neill obtained statements regarding claims such as a traffic accident involving a city vehicle, negotiated with insurance carriers and organized claim information.

In a memo filed with the court, O'Neill said she understood she was considered an administrator and was therefore exempt from overtime compensation according to the U.S. Fair Labor Standards Act.

The city's own classification of the job, however, appears unclear, according to a memo filed by San Francisco-based Long & Levit LLP, which is representing O'Neill: The city considered the position non-exempt in its November 1992 job description, but its 2006 description lists O'Neill's position as exempt. She is a member of its "Management" class for labor negotiations.

Non-exempt employees have less professional latitude and are paid overtime.

A 2001 city job description for a paralegal lists it as a non-exempt position.

Until 2005, O'Neill said she worked about 55 hours a week, was not paid overtime and she received positive performance reviews.

But when City Attorney Baum began work in July 2004, working conditions changed for O'Neill, records indicate.

"In 2005, the city's newly hired city attorney, Gary Baum, realized the obvious: Ms. O'Neill was misclassified. He recognized that the city faced major liability exposure. ... Unfortunately, rather than acknowledge and correct the city's misclassification ... Mr. Baum imposed upon her a rigid work schedule in an attempt to prevent her from working any more overtime hours," a memo written by O'Neill's attorneys states.

The city maintains that O'Neill's position is exempt from overtime. Baum testified he began regulating O'Neill's working hours because he wanted to ensure she could be supervised and was present during traditional working hours.

Early in 2005, Baum reportedly instructed O'Neill not to work weekends or other days City Hall was closed. And in March 2005, she was given instructions to work no more than 80 hours every two weeks and not to work past 6:30 p.m.

At the time, O'Neill still believed she was exempt from overtime pay.

After the regulations were imposed, O'Neill received numerous written and verbal warnings about her working hours, which were closely monitored by Baum.

She has stated the extra hours were needed to complete her assignments.

At the end of March, Baum recommended suspending O'Neill for three days without pay for neglect of duty, tardiness, refusal or failure to perform work, offensive treatment of the public and disobedience of proper authority.

"Most significantly, she repeatedly disregarded legitimate directions, going so far as assigning a case to a different law firm than ordered by Mr. Baum," according to a memo from the city's representatives, Littler Mendelson.

Within a few months in 2005, four complaints from the public were also filed about O'Neill's work, the city states.

According to O'Neill, until 2005 she received "glowing" performance reviews.

O'Neill appealed the suspension following the city's protocols. Her objection was heard by Assistant City Manager Emily Harrison and overruled. O'Neill was suspended from June 21-23, 2005.

Just days after the suspension, on June 28, Baum again gave O'Neill a written reprimand for her working hours, stating she worked past 6:30 p.m. at least three times.

On Aug. 10, O'Neill filed her suit against the city, which was later moved to federal court by the city because it involves the U.S. Fair Labor Standards Act.

O'Neill received at least two additional warnings in late 2005 about her working hours.

O'Neill said Baum even prohibited her from chatting with someone near the elevators after work because "she was given a directive not to be on the eighth floor past her working hours."

In April 2006, O'Neill received another critical review, according to the city's attorneys. She had allegedly disobeyed Baum, provided legal advice, behaved rudely and continued to violate the imposed work schedule.

Then, in July 2006, O'Neill's position was scaled back from full-time to 60 percent time, and her paralegal duties were outsourced, city records show.

The city defended the decision as part of its move to outsource all litigation following the retirement of the city's primary litigation attorney, Bill Mayfield, in March.

But O'Neill's attorneys claim the move was retribution for O'Neill's lawsuit and a move to eliminate the portions of her job that had been recognized as non-exempt and therefore meriting overtime.

O'Neill has continued to receive poor performance reviews and warnings, according to July 2007 memo from Long & Levit.

And she now fears her job may not last until the November trial.

Its elimination was considered during the 2007-08 budget process, but according to city records, Baum recommended against outsourcing the claims investigator position.

A pretrial conference is scheduled for Oct. 29 in San Jose before Judge James Ware. A trial, before Ware rather than a jury, is set for Nov. 13-16 and Nov. 20.

Staff Writer Becky Trout can be e-mailed at


Posted by Robin Freeman, a resident of another community
on Aug 24, 2007 at 9:24 am

It sure sounds like the city attorney has let this get way out of hand and as such is costing the city and Ms. O'Neill way too much in terms of time and money. It seems to me that sometimes those in power forget who they're working for and it's not their egos.

Posted by Fireman, a resident of another community
on Aug 24, 2007 at 10:50 am

Sounds like the same old City of Palo Alto that we all have learned to distrust. I would like to make contact with this person to make avalible the huge amount of written material I have. Maybe we can join together to fight this TOXIC cloud that seems to have formed over the City of Palo Alto.. All victums must stand up and fight together to make Palo Alto the place it could be and should be.

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