Big Business Fights Back Over Information Technology Overtime Claims

Santa Clara, CAInformation technologists, otherwise known as IT workers, have been taking big businesses to court to recover unpaid IT overtime wages for quite a few years now. They have been remarkably successful. IT workers have started class actions against high tech giants like IBM and Sun Microsystems, Inc., and many of these class actions have already brought about huge settlements.

But in case you think these class action defendants are asleep at the switch, be assured they are fully alert. They are hunting for any way to cut down on the cost of paying their employees what they have earned under state and federal labor codes.

Sun Microsystems, Inc., in particular, seems to be pursuing one strategy vigorously—that of exporting the work and downsizing in the U.S.

Here's what Sun has done:

• Since June, 2006, the company has laid off 3,800 employees globally, and is currently left with 34,219 employees.



• On August 7, the company filed a securities disclosure statement saying that it planned to reduce costs by reorganizing and reducing its workforce. As a result it will be paying out $100 million to $150 million in restructuring costs. Since the "restructuring costs" are severance payments it will have to pay to downsize, analysts predict that up to 2000 more employees could lose their jobs.



• On August 13, a news story appeared on the internet from Bangalore, India, reporting that Sun Microsystems expects to triple its services business in India over the next three years. India is currently the smallest of Sun's GEMs (geographically established markets). Sun wants to bring the percentage of revenue from services in India from 18% to 34%, to match Sun's global percentage of revenue from services. Sun's aim is to bring this percentage up to 35% by 2010, both for India and for the company globally.



• In the Bangalore news story, Bhaskar Pramanik, president of Sun's India GEM, was reported as saying that the restructuring announced August 7 "had nothing to do with cost reduction". (Try telling that to the people who are about to lose their jobs.)




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• Sun Microsystems has said it will be spreading the word that it is "open for middle east business" at GITEX 2007, an international IT exhibition to be held in Dubai September 8 to 12.

Reading between the lines, it looks as if Sun is concentrating on its bottom line, rather than on the welfare of its American IT workers.

The big business front group, the Civil Justice Association of California, has filed an initiative in California to restrict their exposure to pesky class actions. Big businesses can afford to pay for lobbying to change the law.

In addition, American IT workers are complaining that employers are keeping IT wages down, and decreasing IT jobs open to them, by hiring cheaper "temporary" workers from outside the country.

If you are an IT worker, and have a potential legal claim for overtime wages, the time to pursue it is now. The pendulum could swing back.