In a move that promises to close the books on years of courtroom wrangling, Provident Financial Holdings in Riverside, Calif., announced late Thursday that it expects to record a $650,000 litigation charge to settle two more long-running lawsuits related to overtime compensation.
Though the $1.2 billion-asset Provident did not admit to any wrongdoing, it did agree to pay the plaintiffs and their attorneys about $1.8 million. Miscellaneous additional costs plus expenses related to payroll taxes could push the final bill higher.
In a report filed with the Securities and Exchange Commission, Provident said the settlement shields it from exposure to a potentially higher level of damages, penalties, fines and legal fees that could accrue if the disputes dragged on and courts ultimately sided with the plaintiffs. The $650,000 charge will be added to existing legal reserves to pay the settlement.
Plaintiffs in both cases had worked as mortgage underwriters for Provident. The company had classified underwriter jobs as administrative positions exempt from overtime requirements. Plaintiffs argued they were nonexempt production workers, thus entitled to overtime.
Provident reported a loss of $225,000 for the quarter that ended Sept. 30, in large part because of a $2.75 million legal settlement involving a third case related to questions about employee compensation.
Provident has been fighting claims it failed to properly compensate employees since December 2012, when the initial plaintiff, Gina McKeen-Chaplin, filed suit in U.S. District Court for the Eastern District of California. That court granted Provident’s motion for summary judgment, but McKeen-Chaplin appealed to the Ninth Circuit Court of Appeals, which earlier this year reversed the lower court’s order.
The U.S. Supreme Court declined to hear the case, prompting Provident’s decision to agree to the settlement earlier this week.
Provident’s most recent quarterly report, filed with the SEC on Nov. 9, did not mention any additional material legal proceedings.