City department heads in Hanford have dropped their federal lawsuit against their employer in an out-of-court settlement agreed to by the city.
Tuesday, U.S. District Court Judge Anthony Ishii signed a court order dismissing the case for good.
The case began in 2011 when former City Manager Hilary Straus, with the backing of the Hanford City Council, told the department heads -- including the police chief, fire chief and public works director -- that they were now at-will employees who could be let go at any time.
Previously, they had served as exempt employees not entitled to overtime but still entitled to a pre-disciplinary hearing if threatened with firing, and a hearing before a panel or arbitrator if fired.
The department heads responded by forming the Executive Management Employee Association bargaining unit, and filing a lawsuit in federal court in Fresno alleging their due process rights had been violated by the change to at-will.
City Manager Darrel Pyle said the Hanford City Council reported out of closed session Tuesday evening that it approved the settlement agreement.
Attorney Gary Messing from the Sacramento law firm Carroll, Burdick & McDonough, representing the department heads, said under the settlement new department heads will serve at-will but existing department heads could stay on as before.
"We never contested the right to have new hires at-will," Messing said, but opposed changing without agreement the employment terms of the department heads.
The settlement included a payment by the city of $389,250 to cover attorney fees, costs and damages, Messing said.
Of the seven department heads affected by the settlement, four are still employed at the city: Public Works Director Lou Camara, Police Chief Carlos Mestas, Fire Chief Tim Ieronimo, and Finance Director Tom Dibble.
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