Two class action suits dealing with overtime disputes in the IT industry have recently been settled. The first lawsuit was brought by 800 employees of Siebel (a software company recently purchased by Oracle). Siebel was accused of violating US overtime laws for nearly 6 years (Jan 2000 to Oct 2005), and settled the suit for $27.5 million. Each employee is expected to receive approximately $27,000 in compensation.
The second suit pitted the software and consulting giant IBM against tens of thousand of employees. IBM was alleged to have violated various us federal and state labor laws by not paying overtime wages. IBM has now settled the suit for $65 million but did not have to admit to either wrongdoing or liability.
Even so, both cases have set new overtime precedents in the IT industry, and their relevance to the games industry should not be overlooked. Coupled with the overtime lawsuits EA has lost in the past couple years, and the current cases involving Activision and Sony, it is becoming clear that employees do possess some legal leverage for compensation.
These lawsuits finally put a real financial cost on a practice which would have been previously ignored in boardrooms’ risk/benefit analysis (or budget planning). Until now, tech and games company rarely took into consideration the cost in human capital when pressuring employees to work long hours. An increased risk of a series of legal challenges might lead some companies to re-examine their work practices.
