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Judge Tosses IBM Overtime Lawsuit


A former IBM sales rep's class-action suit is invalid, said a federal court judge, because of a previous pledge not to take legal action against the company.



A judge has dismissed a class-action lawsuit filed against IBM (NYSE: IBM) by a former employee who claimed the tech giant owes back pay to thousands of workers wrongfully classified as exempt from overtime compensation.

The judge in the case said that ex-IBMer Tom Chau cannot sue IBM for back wages because, in exchange for severance pay, he signed a contract pledging not to take legal action against the company.

Chau's "claims are barred by the plain language of a valid and enforceable general release and covenant not to sue," said California federal court judge Maxine Chesney, in a decision handed down earlier this month.

IBM paid Chau, who worked in a sales position, $9,681 when he left the company in 2004, court records show.

Chau filed a class action suit against IBM earlier this year, arguing that Big Blue was flouting California labor laws by purposely misclassifying sales workers as managers to avoid paying them overtime.

Chau claimed he was forced to work more than 40 hours per week without extra compensation and was not given mandatory rest breaks, as required by California law.

Despite Chesney's ruling, IBM isn't out of the woods when it comes to such claims. The company still faces at least two similar lawsuits filed by IBM workers in California. IBM has denied that it purposely withheld overtime from sales reps.

IBM last year agreed to pay $65 million to more than 32,000 technical workers to settle similar charges. In 2005, government outsourcer Computer Sciences Corp. agreed to pay $24 million to settle overtime claims brought by some of its workers.


1 message(s). Last at: Oct 23, 2007 10:37:00 AM
  • JohnBick
    commented on Oct 23, 2007 10:37:00 AM
    The sales reps have it esy compared to some of the professional "techies" who are required to bill 2100 hours a year, regardless of their years of service. (Vacation, sick time, most education and holidays are not "billable".) Senior management refers to this as an "organizational productivity goal" but organizations, to the department level, are frequently measured on achieving this on the average. Needless to say significant pressure is placed on the individual.

    (I always thought productivity was "work results per unit of time", not "hours worked"!!!)

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