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Oracle Will Pay $35M in Class Action Overtime Lawsuit Settlement

November 15, 2011

As labor and employment attorneys based in Costa Mesa, California, we have been following the recent announcement that Oracle Corporation, the technology giant, has agreed to compensate over 1,725 employees in Northern California, with $35 million in a class action wage and hour settlement.

According to the San Francisco Chronicle, preliminary approval was granted last week by a Superior Court Judge, to settle the 2007 class action overtime lawsuit--filed on behalf of three groups of employees who worked for the company between 2003 and 2006, and claim that they were wrongfully denied overtime payment.

The class of employees reportedly includes technical analysts who answer customer questions and provide support, quality assurance employees, who test the company's software, and project managers, who perform task coordination for other employees--all of whom claim they were misclassified.

Oracle reportedly argued that the employees were either administrators or computer professionals, which would make them exempt from state overtime laws--requiring that employees are paid one and one-half their regular pay rate when working over eight hours in a day or beyond forty hours in a week of work.

As our Anaheim California employment lawyers blog has previously discussed, under the Fair Labor Standards Act (FLSA) and California law, exemptions from overtime payment are provided for professional, administrative, and executive employees, as well as some computer employees and outside sales employees. To qualify for these exemptions, employees must meet certain criteria regarding their employment duties.

The employees claimed that Oracle had engaged in employee misclassification, and that they should not be classified as exempt from overtime laws--as each group regularly worked long hours, with repetitive tasks for modest salaries.

In 2006, Oracle reclassified the technical analysts and project managers, making them eligible for overtime compensation. However, the company still considers the quality assurance employees as exempt from state overtime laws. For this group of employees, the wage and hour settlement includes compensation for employees who worked for the company between 2003 and 2010. The settlement does not, however, require Oracle to change its company overtime policy.

This $35 million overtime settlement will reportedly be shared among the 1,725 employees, which after attorneys' fees and other costs, is estimated to total around $13,000 per employee. Oracle did not include any acknowledgement of wrongdoing in the settlement, and made no public comment.

Oracle was also in the news earlier this year, as our Orange County employment attorney blog reported, after the California Supreme Court ruled unanimously that non-exempt employees, who are out of state residents working for California-based companies and spend entire days or weeks in the state of California, should be covered by California overtime laws. This ruling came after Oracle was sued by a group of instructors, who are residents of Colorado and Arizona, and traveled between states showing customers how to use Oracle software products. They accused Oracle of employee misclassification for denying them overtime payment, under California's wage and hour laws.

In Stanton, Tustin and Villa Park, California, call our labor and employment attorneys today for a free consultation at 1-800-872-5925.

Oracle to pay $35 million to settle overtime suit, San Francisco Chronicle, November 12, 2011

Related Web Resources:

The Department of Fair Employment and Housing (DFEH)

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

Related Blog Posts:

California Representative Lynn Woosley Re-introduces Employee Misclassification Prevention Act, California Employment Lawyers Blog, October 24, 2011

CA Governor Jerry Brown Approves Bill to Increase Willful Employee Misclassification Penalties, California Employment Lawyers Blog, October 21, 2011

Renal Advantage Sued in Employee Misclassification Lawsuit, California Employment Lawyers Blog, September 6, 2011

T. J. Maxx Retail Chain Sued For Employee Misclassification, California Employment Lawyers Blog, August 25, 2011

Employee Misclassification Leads to Nearly $1M in Back Pay for 30 Restaurant Workers, California Employment Lawyers Blog, August 24, 2011

DOL Forces Texas Company to Pay $433K in Back Wages For Employee Misclassification, California Employment Lawyers Blog, August 5, 2011

CA Drug Sales Reps Sue Novo Nordisk in Class Action Wage and Hour Lawsuit, California Employment Lawyers Blog, July 28, 2011

Aon Corp. Settles Employee Misclassification Lawsuit for $10.5M , California Employment Lawyers Blog, July 8, 2011

"White Collar" Exemptions under the FLSA, California Employment Lawyers Blog, November 12, 2010

U.S. Labor Department Launches "We Can Help" Campaign to Enforce Wage and Hour Laws, California Employment Lawyers Blog, April 2, 2010

"Exempt" vs. "Non-exempt" in the California Workplace, California Employment Lawyers Blog, April 15, 2010