NEW YORK: International Business Machines (IBM) said it would pay $65 million to settle a class-action lawsuit in which it was accused of illegally denying overtime pay to a large group of technology workers.
Employees on behalf of whom the lawsuit was brought would now be paid overtime dues according to rank and the number of hours worked, the workers and the company agreed. The settlement has yet to receive the approval of district court Judge Phyllis J. Hamilton.
The company had earlier maintained that the group of 32,000 workers, classified as "Technical Services Professional and Information Technology Specialists,” were not entitled to overtime pay.
The Fair Labor Standards Act and other labor laws state that professionals in this category are exempt from being paid overtime premiums. This class of employees includes specialized computer operators, executives and managers, personnel involved with decision making, creative tasks, etc.
The employees were represented in court by lawyer James Finberg of Lieff Cabraser Heimann & Bernstein LLP. Finberg had been approached by three IBM employees who brought the class action accusing their employer of compelling them to work more than 40 hours per week and on weekends without additional compensation. He said the company had wrongly classified the workers who were “just following manuals to troubleshoot computer problems”.
The company released a statement that said it opted for settlement in order to avoid the “lengthy, burdensome and expensive” litigation. Spokesperson Michael Maloney offered no comment beyond what the statement said. The compensation money would be accounted for in the third quarter's business, the company said.
The case was one of many similar ones where technology workers have sued their employers, such as Computer Sciences Corp., Hewlett Packard, Oracle, Electronic Arts and Siebel Systems.
Siebel offered to pay a total of $27.5 million to a group of 800 workers that were classified as “software engineer” and “senior software engineer”.
In most states overtime pay is usually compensated with 1 ½ hr's pay for each additional hour of work.
