IBM Settles Overtime Lawsuit for $65M

International Business Machines Corp. settled a federal class-action lawsuit Wednesday, agreeing to pay a total of $65 million to 32,000 technology workers who claimed the company illegally withheld overtime pay. The suit was filed in January in U.S. District Court in San Francisco on behalf of three employees who said they were forced to work more than 40 hours per week and on weekends without additional compensation. The case involved workers classified as "Technical Services Professional and Information Technology Specialists." IBM considered them highly skilled professionals exempt from overtime laws detailed in the Fair Labor Standards Act and California labor laws.

Generally, executives, managers and high-level computer operators are exempt from being paid overtime premiums, which is compensated at 90 minutes pay for each additional hour of work. But the IBM workers were by no means the decision makers or creative types typically ineligible for overtime, said lawyers at Lieff Cabraser Heimann & Bernstein LLP.

"These people were just following manuals to trouble shoot computer problems." Armonk, N.Y.-based IBM released a statement saying it had established a provision for the settlement of the case in the third quarter. "Litigation of this case would have been lengthy, burdensome and expensive, and IBM chose to resolve it," the statement said. According to the settlement, still subject to court approval, the workers may apply for additional pay based on a mutually agreed-upon formula. Individuals will receive from $50 to tens of thousands of dollars, depending on their rank and number of hours worked.