AT&T Faces $1 Billion Overtime Lawsuit

San Francisco, CAEmployees who have been misclassified as exempt from California overtime pay are fighting back and taking their employers to court. One lawsuit filed recently against a telecommunications giant alleges that the corporation violated California and federal overtime laws by improperly classifying employees as exempt from overtime pay.

The lawsuit was filed in the Northern District of California in San Francisco and alleges that AT&T and two of its units, BellSouth Telecommunications Co. and Pacific Bell Telephone Company, withheld up to $1 billion in overtime wages. According to the December 16 edition of the South Florida Business Journal, the lawsuit alleges that the company misclassified more than 5,000 first level managers who worked for Pacific Bell in California and other states where the company does business.

The lawsuit states that first level managers are managers in name only and actually perform clerical duties and send information between management and technicians. Plaintiffs say they should not have been classified as exempt from overtime pay.

"Plaintiffs and the members of the proposed class have a minimal role in supervising their technicians and have no authority to make employment-related decisions," the lawsuit states. "Furthermore, they are tightly controlled by Company policy and by their supervisors, do not exercise discretion or independent judgment as to matters of significance, and their job duties are not directly related to the Company's management policies or general business operations."

The lawsuit alleges that prior to BellSouth's purchase by AT&T, first-level managers were paid time-and-a-half wages for most hours worked in excess of 40 hours per week. However, after AT&T took over, the plaintiffs and class members were reclassified as exempt from overtime pay, even though they took on no extra responsibilities.

Plaintiffs say that their ordinary working hours range from 50 to 70 hours per week. Furthermore, they work from home to keep up with duties and perform rotating "duty" that involves them being on call 24 hours per day for a seven-day period.

"Class members typically work many additional hours on their 'duty' weeks and may work a total of up to 100 hours or more," the lawsuit states.

Misclassifying employees as exempt from overtime pay is a violation of the federal Fair Labor Standards Act.