By Daniel Wiessner

NEW YORK, Nov 19 (Reuters) - A federal judge has approved a $20 million settlement between New York City and thousands of police sergeants who claimed the city illegally withheld overtime pay.

Under the pact, approved by U.S. District Judge Shira Scheindlin, 4,302 officers will receive $14 million in back pay and $6 million in damages. Each sergeant's award will vary depending on his or her length of service.

The Nov. 15 settlement comes a year after the 2nd Circuit Court of Appeals reversed a jury finding that the sergeants were not entitled to overtime under the federal Fair Labor Standards Act.

The statute entitles non-management employees to overtime pay when they work more than 40 hours in a work week. "Executive" employees whose primary job function is management are exempted from the overtime rules.

Stephen Younger, who represented the sergeants, said it is the first case in which a federal court has found that police sergeants are not exempt from the overtime law.

"In addition to the payout they will receive, (the sergeants) are protected by federal law going forward," said Younger, of Patterson Belknap Webb & Tyler.

Since at least 2001, the city has not paid sergeants for overtime work, claiming their primary job duties included a key management component. In the field, only sergeants can use certain equipment, such as tasers, and they oversee crime scene operations if they are the highest-ranked officers present, according to court filings from the city.

In 2004, the sergeants challenged the city, seeking unpaid overtime wages dating back to April 2001. They argued that their work on the front lines trumped their management duties under the federal labor law.

Four months later, the plaintiffs' case got a boost from the U.S. Department of Labor, which adopted a revised interpretation of the Fair Labor Standards Act so that first responders, including police officers, fire fighters and rescue workers, would be entitled to overtime pay.

In 2009, Scheindlin dismissed the sergeants' motion for summary judgment, and a jury found in favor of the city.

The 2nd Circuit Court of Appeals last year reversed. The court held that the sergeants' supervision of junior officers did not make them "management" under the labor law, and said their role as first responders to crime scenes qualified them for overtime pay.

In August, the city and police reached the $20 million settlement and sent it to Scheindlin for her approval.

About 2,700 NYPD sergeants are making nearly identical claims in a separate suit, McInnis v. City of New York, in Manhattan federal court. Younger, who is not representing those plaintiffs, said the case was delayed pending the outcome of this case.

In a statement, senior counsel Diana Voight of the New York City Law Department said the settlement "is in the city's best interest."

The case is Edward Mullins v. City of New York, U.S. Court of Appeals for the 2nd Circuit, No. 09-3435.

For the plaintiffs: Stephen Younger, Catherine Williams and A. Leah Vickers of Patterson Belknap Webb & Tyler.

For the city: Assistant Corporation Counsel Karen Griffin.

(Additional reporting by Jessica Dye)

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