Programmers, Overtime, Huh??

Business Week has an interesting post on non traditional workers suing and getting overtime pay. Check out More workers suing over overtime pay By Michael Orey

In the article, Michael states:

About 115 million employees — 86 percent of the workforce — are covered by federal overtime rules, according to the U.S. Labor Dept. The rules apply to salaried and hourly workers alike. Plenty of wage and hour lawsuits are filed on behalf of the traditional working class, be they truckers, construction laborers, poultry processors, or restaurant workers. But no one has been more successful than Thierman in collecting overtime for employees who are far from the factory floor or fast-food kitchen. His biggest settlements over the last two years have been on behalf of stockbrokers, many of whom earn well into the six figures. Thierman has teamed up with other lawyers to extract settlements totaling about a half-billion dollars from brokerage firms, including $98 million from Citigroup's Smith Barney and $87 million from UBS Financial Services Inc. (As is typical in settlements, the companies do not admit liability.) With those cases drawing to a close, he and other attorneys already are pursuing new claims on behalf of computer workers, pharmaceutical sales reps, and accounting firm staff.

As Thierman sees it, these are the rank and file of a white-collar proletariat. "In the 1940s and 1950s," he writes in an e-mail, "a large portion of American workers who were protected by overtime laws seem to have been forgotten as inflation drove up the absolute (not the relative) amount of compensation, and the bulk of workers began wearing sports coats and processing information instead of wearing coveralls and processing widgets." In a subsequent interview he says: "I'm interested in the middle class—those are my folks."

The core wage and hour law, the federal Fair Labor Standards Act, has been on the books since 1938. The New Deal statute, which mandated that a broad swath of the workforce receive 90 minutes' pay for every hour worked beyond 40 in a week, had two goals. One was to reward laborers who put in long hours. But another was to expand employment by making it cheaper for companies to hire additional workers than pay existing ones time and a half. This penalty, Thierman argues, is ineffective today, given the enormous costs of health care and other benefits for each employee. The result, he says, is that businesses prefer to require long hours, and they either pay overtime or not—and hope they don't get caught.

Of course, not everyone is entitled to overtime. Under "white-collar exemptions" to the law, employers don't have to pay extra to various executives and professionals. These exemptions, labor historians say, are rooted in decades-old thinking about a workforce that bears little resemblance to today's. A clear distinction between professional and production classes used to be assumed. Nowadays mortgage brokers, for instance, crank out loan applications in assembly line operations and are paid based on how much they produce. Lenders around the country have battled, largely unsuccessfully, to defeat overtime claims by these employees.

Then there's the notion that white-collar jobs are cushier and pay more. "Bankers used to work bankers' hours," notes Jerry A. Jacobs, a sociologist at the University of Pennsylvania. But, he notes, the tendency of working-class employees to put in longer hours than professionals flipped by the 1960s. Consider pharmaceutical sales reps. While they make an average of $79,000 a year, their jobs require them to work about 65 hours a week, says Charles Joseph, a New York attorney who, along with others, has filed overtime cases against every major drugmaker. In order to earn a middle-class income, he observes, they essentially "have to work two jobs."

Beth Amendola would agree with that. She is suing Bristol-Myers Squibb Co., where she worked as a sales rep in South Florida from 1998 to 2006. Often called on to attend evening programs and medical meetings, Amendola and her colleagues would say, "Oh, another hour, another 25 cents — that was the standard joke." A Bristol spokesman says the company believes it complies with the FLSA, and won't comment on pending litigation.

While the Bush administration updated regulations governing white-collar exemptions in 2004, attorneys say the changes were incremental and left plenty of room for lawsuits. There are two basic categories of overtime claims. One arises because a company has misclassified employees as exempt from the wage and hour laws, and thus improperly failed to pay overtime. In some of these cases the workers have been classified as independent contractors, meaning the company doesn't pay them benefits, either. The second is a so-called off-the-clock claim, in which employees allege that some of the work they do is not recorded by the company, sometimes as an intentional way to keep them from accruing overtime.

Even defense attorneys acknowledge that vast numbers of companies are violating the law. "Industries long steeped in tradition as to who is exempt and who is not exempt...are not necessarily compliant with the letter of the regulations," says Kirby C. Wilcox, a partner at Paul, Hastings, Janofsky & Walker in San Francisco. Indeed Thomas, the former defense attorney, says he switched sides after representing an employer in a wage and hour case. "I was amazed at how prevalent the violations were and the size of the settlement," says Thomas, who co-founded his own firm, Dolin, Thomas & Solomon, in 2000. "I said to myself, Boy, I'm really on the wrong side here.'"

The proliferation of cases—more than doubling in the federal courts from 2001 to 2006—at first drew little notice in the business community, but that's changing. "Everybody's talking about it," says Robin S. Conrad, head of the litigation arm of the U.S. Chamber of Commerce, which recently began filing briefs in cases in support of companies.

While violations appear widespread, employees themselves rarely think to make wage and hour claims. Instead, they usually have it suggested to them by lawyers. "Ninety-five percent of our wage and hour cases are a result of someone coming to us complaining about something else," says Thomas. "I can't tell you how many people have come into our office with employment disputes that are meritless and would be thrown out of court and walk out with an FLSA claim."

So deeply rooted are archaic workplace stereotypes that many college-educated, white-collar workers are resistant to the idea that they are entitled to overtime. They associate it with a labor pool that is valued for brawn rather than brains. The notion of keeping track of their hours so they can get paid for long weeks strikes them as déclassé.

Scores of plaintiffs' firms are now aggressively pursuing overtime cases, but it is Thierman whom defense lawyers consistently cite as the most successful and innovative in the business. "He seeds the clouds," and others collect the rain, says defense attorney Wilcox. Thierman has particularly made his mark in pursuit of claims on behalf of relatively well-paid workers.

He uses the I.T. industry as an example:

Computer workers of various stripes, for example, have commonly not been paid for their extra hours. In a sop to the IT industry, lawmakers exempted such employees, who tend to be well-educated, well-paid, and have a culture of working virtually round the clock. The companies argued that they would otherwise not be able to remain competitive with foreign rivals. But under California law, the exemption applies only for workers whose primary function involves "the exercise of discretion and independent judgment." In numerous lawsuits, Thierman and other plaintiffs' attorneys have alleged that legions of systems engineers, help desk staff, and customer service personnel do no such thing. Of programmers, Thierman says, "Yes, they get to pick whatever code they want to write, but they don't tell you what the program does.... All they do is implement someone else's desires."

Already the settlements are rolling in. Siebel Systems has agreed to pay $27.5 million to about 800 software engineers, and IBM is forking over $65 million to technical and customer support workers. Thierman says he also plans to go after other big employers of computer personnel, including banks and health insurers.

$27.5 million spread over 800 engineers, I'll have to keep Mr. Thierman name filed away just in case.

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