In January 2006, says one of the eight plaintiffs in the class suit filed against IBM:
"I think it is going to be a very large case in terms of the number of people, in terms of the number of hours, and eventually a very large settlement of dollars."
And it turned out just that way. On November 22, IBM said it agreed to pay $65 million to settle a class-action lawsuit alleging it unlawfully withheld overtime pay from some employees.
IBM has set aside a provision for the settlement in the third quarter of this year. However, the settlement has no attachment of admittance for wrongdoing or liability.
Pending approval by a U.S. federal court judge, the settlement allows workers in IBM’s technical services professional and information technology specialist job categories to apply for payment according to a formula.
The suit sought compensation for the past four years for affected current and former IBM workers in California and three years of back pay for those in other states.
IBM is one of the biggest computer industry players to get hit with a wage-and-hour suit. In 2005, video game publisher Electronic Arts reached a tentative $15.6 million settlement with some of its entry-level computer graphics artists and agreed to reclassify about 200 of them as hourly workers.
Likewise, Siebel Systems Inc. is currently under broil for allegedly misclassifying as exempt some of its software engineers, thus not eligible for overtime.