Siebel to pay $27.5M in OT lawsuit
East Bay Business Times - 2:57 PM PST Thursday
by Marie-Anne Hogarth
In what may be one of the largest settlements of a wage-and-hour lawsuit brought by computer professionals, Siebel Systems Inc. likely will pay up to $27.5 million to settle an overtime class action complaint on behalf of its software engineers.
The settlement, which has been preliminarily approved by San Mateo Superior Court Judge Marie Weiner, includes workers at the company's offices in Emeryville, San Mateo and elsewhere in California.
"The reason that these suits are significant is because the exposure is significant," said Peter Rukin, a plaintiff attorney with Rukin Hyland & Doria LLP in San Francisco. "An overtime suit involving an employee who makes $70,000 or $80,000 a year results in greater exposure for the company, because the compensation is greater than someone who is flipping burgers for McDonalds."
The agreement with Siebel, which was acquired by Oracle Corp. on Jan. 31, covers approximately 800 California employees with the job title "software engineer" or "senior software engineer" who worked for the company between Jan. 16, 2000, and Oct. 7, 2005. Class members, on average, worked 139 weeks during this time period and are expected to recover, on average, approximately $27,000.
Two Oakland plaintiff firms, Dickson-Ross LLP and Goldstein, Demchak, Baller, Borgen & Dardarian, named as class counsel stand to make approximately $5.5 million in attorneys' fees from the case.
Lawyers with the firms would not comment on the settlement. Lynne Hermle, a partner at Orrick, Herrington & Sutcliffe LLP, which is representing Siebel, did not return telephone calls.
The Nov. 6 settlement agreement must be formally approved at a hearing scheduled for April 27, 2007.
All eyes in the wage-and-hour arena, however, are on Rosenburg et al. v. IBM, a suit filed in the U.S. District Court for the Northern District of California in January. The outcome may be close at hand: On Nov. 15, attorneys from both sides signed court documents agreeing to focus on settlement talks for 30 days.
In the meantime, OT settlements have become the latest IT wave. Notable cases include:
• Computer Sciences Corp., of El Segundo, which has been sued for failing to pay tech support and employees overtime wages, agreed to a $24 million settlement. The settlement received final court approval in July.
• San Francisco-based Wells Fargo & Co. in October agreed to pay $12.8 million to settle a class action charging that the bank improperly classified about 4,500 business-systems employees in California and other states.
• Electronic Arts Inc., a Redwood City-based game publisher, was hit twice. The company in April said it was paying $14.9 million to settle a suit brought by former and current programmers. In October 2005, EA reached a $15.6 million settlement in connection with overtime claims from its graphic artists.
Attorneys say the publicity surrounding such cases, as well as some high-profile settlements earlier this year in overtime suits filed against Merrill Lynch & Co. Inc. and Smith Barney, are fueling class-action litigation concerning more highly paid professionals.
"There was an artificial feeling that if you are talking about somebody who is making a lot of money, 'how can you bring an overtime claim for that person?'" Rukin said. "I think those precepts were shattered with these settlements involving stockbrokers."
Another theory is that wage-and-hour litigation has arrived with the industry's shift from an entrepreneurial to a corporate culture.
David Lowe, of San Francisco-based Rudy Exelrod & Zieff LLP, one of the law firms that filed the case against IBM, said, "An increasing number of technical workers are doing very routine work that involves very little independent judgment, and so are improperly classified as exempt."
Defense attorneys representing software companies say being hit more than once is the biggest worry for companies deciding whether to settle.
"Siebel is only settling with respect to the individuals included in the class," said Alicia Farquhar, who is of counsel at Wilson Sonsini Goodrich & Rosati in Palo Alto. "It is a definite possibility ... that they may still face additional litigation."
mhogarth@bizjournals.com | 925-598-1432 |
