SACRAMENTO, Calif. — First Technology Federal Credit Union has settled a former employee’s lawsuit alleging she and other workers were improperly classified as exempt employees and denied overtime pay and required meal and rest breaks, bringing a more than four-year legal dispute to an end.
U.S. District Judge Daniel J. Calabretta dismissed the case with prejudice Sept. 3 after previously approving a settlement of former employee Jessica Fagalnifin’s representative claims under California’s Private Attorneys General Act, or PAGA.
Law360 reported that a credit union agreed to pay $206,000 to resolve a former worker’s individual and PAGA claims. Publicly available court records in the First Tech case confirm separate individual and PAGA settlements but do not disclose a combined $206,000 payment.
The publicly disclosed PAGA portion of the First Tech settlement totals $84,750.
Fagalnifin sued First Tech in 2022, alleging the credit union improperly classified her and other employees as exempt from California wage-and-hour requirements. She worked for First Tech from 2018 until 2021.
Her lawsuit alleged the classification resulted in employees being denied overtime compensation, meal periods and rest breaks required under California law.
First Tech disputed the allegations.
Court Earlier Allows PAGA Claim to Proceed
The settlement came after Calabretta in June 2025 rejected First Tech’s attempt to dispose of Fagalnifin’s PAGA claim through summary judgment.
The judge found there was sufficient evidence for a reasonable fact-finder to conclude that Fagalnifin and some other First Tech employees had been misclassified.
First Tech had produced a list identifying seven salaried employees, including Fagalnifin, who were classified as exempt in 2021 despite earning less than the $58,240 salary threshold applicable that year, according to the court.
Fagalnifin alleged that because of the classifications, workers were denied overtime and rest breaks. She also alleged First Tech failed to provide required meal periods.
First Tech argued, among other things, that its employee handbook established policies addressing meal periods, rest breaks and overtime.
Calabretta declined to dismiss the PAGA allegations, finding factual disputes remained over the alleged labor violations.
The court did, however, rule in First Tech’s favor on separate claims alleging interference and retaliation under the federal Family and Medical Leave Act.
$84,750 PAGA Settlement
Under the PAGA agreement subsequently approved by the court, First Tech agreed to a gross payment of $84,750 to resolve the representative claim.
Public settlement information indicates the agreement covers 35 aggrieved employees and 765 pay periods. Of the settlement, $38,250 was allocated to PAGA penalties.
The settlement also provided $23,001 for attorneys’ fees, $2,499 for litigation expenses, $11,000 for settlement administration and a $10,000 plaintiff award.
Calabretta approved the PAGA settlement Aug. 3 after finding it was fair, reasonable and adequate.
The Sept. 3 dismissal order states that the parties also entered into a separate individual settlement resolving Fagalnifin’s remaining claims. The publicly available order does not disclose the amount of that agreement.
The court dismissed the entire case with prejudice while retaining jurisdiction to enforce the PAGA settlement.
The case is Jessica Fagalnifin v. First Technology Federal Credit Union, No. 2:22-cv-00734, in the U.S. District Court for the Eastern District of California.
