IBM coughs up $65m over techie overtime suit

Not admitting liability

By Drew Cullen in San Francisco • Get more from this author

Posted in IT Director, 23rd November 2006 21:11 GMT

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IBM is paying up to $65m in backdated overtime pay to 32,000 US-based techies,to settle a federal class action suit.

In January three current and former employees of IBM filed suit in US District Court in San Franciso, alleging that "IBM illegally treats its employees who install, maintain or support computer software or equipment as "exempt" under federal and state labor laws so it does not have to pay them overtime".

The settlement means that IBM's foot-soldiers, from now, will receive overtime pay for working more than 40 hours a week and on weekends.

In its capitulation statement, IBM bristles somewhat.

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.
IBM states that during its 90-year history as a major employer in the US, it has a long-standing, proven track record in accurately and appropriately paying many hundreds of thousands of employees. IBM continues to believe that its payment practices are fair and comply with all applicable laws and regulations.

But the notion that people who install, maintain or support computer software or equipment, should do so for free is frankly bizarre. IBM was on a hiding to nothing with this case and knew it. ®

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