At a price tag of $65 million, IBM announced Nov. 22 that it had agreed to settle all claims in an overtime pay class action lawsuit filed by current and former IBM technical support employees in federal district court in the Northern District of California in January 2006.
Should the settlement meet the approval of the court, each qualified individual will be entitled to apply for a payment in accordance with the agreed-upon formula.
"Litigation of this case would have been lengthy, burdensome and expensive, and IBM chose to resolve it, without admitting any wrongdoing or liability, for a total of $65 million. IBM had established a provision for the probable settlement of this case in the third quarter of this year," said IBM in a statement.
The suit—titled Rosenburg et al. v. IBM—was filed in filed in the U.S. District Court for the Northern District of California, a federal court in San Francisco.
On March 13, the plaintiffs counsel filed an amended complaint adding additional state law claims.
Plaintiffs charged that IBM unlawfully classified its Technical Services Professional and Information Technology Specialist job categories—those who installed, maintained or supported computer software or equipment—as "exempt" from the overtime provisions of the Fair Labor Standards Act to avoid paying them for time worked in excess of 40 hours in any given week.
The overtime law contained exemptions, including some for salaried professionals, but the plaintiffs in this the Rosenburg filing said they are not exempt.
The amended class action complaint alleged violations of federal law on behalf of a nationwide class of IBM high tech workers as well as violations of the labor laws of California, Colorado, Illinois, Minnesota, New Jersey and New York on behalf of classes of IBM workers in each respective state.
Current and former IBM technical support workers across the United States who were not paid overtime for their work because IBM deemed them exempt were considered part of the class taking action.
The group had asked that the federal court to order IBM to pay technical employees their lost back pay for overtime, as well as to start paying overtime to eligible employees.