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December 05, 2001
PacBell Settles OT Suit for $35M
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ific Bell agreed Monday to pay $35 million to end a lawsuit lodged by 1,500 engineers, in what is believed to be the largest settlement of a white-collar overtime case in California.

The engineers said they worked 50 hours a week but were paid for only 40, according to the Los Angeles Times.

Now the engineers, who earn up to $60,000 a year, will receive at least $107 - or roughly six hours of overtime - for every week they worked since June 1993, said Mark R. Thierman, a San Francisco lawyer representing them.

The utility admitted no wrongdoing in the proposed settlement. A hearing on final approval by the court is scheduled for March 15.

The Times notes that California employers face a wave of such suits, all alleging that workers were improperly classified as managers, professionals, or administrators in efforts to cheat them out of overtime pay.

Under federal law, which many states follow or mimic, workers who are primarily engaged in managerial, administrative or professional duties and make at least $13,000 a year may be exempt from overtime pay.

But under California law, workers may be exempt only if they make at least $26,000 a year and spend at least 50 percent of their time acting as managers.

"Employers in California, if they have any doubts at all if they are in compliance, should consult with counsel and check to make sure right away because these settlements are huge," said Diane Kimberlin, a lawyer with the Los Angeles office of Littler Mendelson, a national firm that represents employers.

"Employers who have any reasonably large number of employees in a number of locations are clearly at risk of being targeted, and the potential liabilities can be ruinous."

The Times listed these recent resolutions of claims by white-collar workers in California for overtime pay:

  • Farmers Insurance: jury in July awarded 2,400 claims adjusters $90 million; Farmers appealing.

  • Pacific Bell: settled Monday with 1,500 outside engineers for $34 million.

  • Pacific Bell: settled in 1997 with 600 sales support managers for $27.8 million.

  • Rite Aid Corp.: settled in June with 3,000 managers and assistant managers for $25 million.

  • Bank of America: settled in October with as many as 6,000 personal bankers for $22 million.

  • CSK Auto Inc.: settled in January with 1,500 store managers for $11 million.

  • Taco Bell Corp.: settled in February with 3,000 managers and assistants for $9 million.


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