Suppose you’re an attorney working in corporate America.  You’ve had lots of experience defending the corporation from all manners of lawsuits brought by workers, shareholders, etc.  Suddenly you realize that there is more money to be made by bringing the lawsuits rather than defending against them.

So what does “Wage and Hour” mean?  It means that you may be classed as “Exempt” from overtime when you really aren’t.  Starbucks paid out $18 million to California store managers in 2003.  Wal-Mart currently has nearly 80 Wage and Hour lawsuits in progress.  Wal-Mart has paid over $250 million to settle lawsuits in California and Pennsylvania.

So where does Sexual Harassment fit in?  Attorney J. Nelson Thomas of New York says

I was amazed at how prevalent the violations were and the size of the settlement.  I said to myself, Boy, I’m really on the wrong side here.  I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will.



So who is exempt from overtime and who deserves it?  Generally you are exempt from overtime if you get to exercise independent judgement over the work that you do.  You only get overtime if you are more like a shift-worker–you clock in, do what you’re told, then clock out.  A line animal get overetime, the management doesn’t.  It is blue collar versus white collar.  But does that deliniation of collar color matter anymore?  The exempt/non-exempt rules apply equally to salaried and hourly employees, even though most businesses try to say that you are exempt just because you are salaried.

Another question along the same line–Saturn car manufacturer has said for some time that any employee on the manufacturing line can stop the line if necessary–they get to exercise independent judgement.  Does this automatically make them except from overtime?  I think not, but I bet that a clever corporate lawyer would say that yes, it demonstrates independent judgement, thus satisfying the rules.

Sexual harassment lawsuits are difficult to prove and even more difficult to quantify the damages.  In this case, you have a defined number of hours, those hours get paid at 1.5X the effective hourly rate, and there may be a 1.5X to 3X punitive award.  This is a much bigger business than almost any other class action workers lawsuit.

The same J. Nelson Thomas referenced above also says 

Ninety-five percent of our wage and hour cases are a result of someone coming to us complaining about something else.  I can’t tell you how many people have come into our office with employment disputes that are meritless and would be thrown out of court and walk out with an FLSA claim.

This says something about the real state of the legal industry.  It is not as bad as the “ambulance chaser”, but nearly so.  

So what about the IT industry–it is where I work and possibly you too.  Oracle and IBM are paying nearly $92 million to settle similar suites to workers, in a similar move as Starbucks.  Just because you get to decide how to implement a specific function doesn’t mean that you aren’t being told what to write, you aren’t told what the program is supposed to do.  Code monkeys are virtually identical to line workers manufacturing something, only more educated.

And this one applies to virtually everyone.  Do you carry a BlackBerry, Windows Mobile phone or connected PDA?  Do you check your email at night or over the weekend?  Do you reply or act upon that email?  If so, you are working and may be eligible for overtime.  This could be really dangerous.  As a manager, you need to make it clear that the employee is doing this voluntarily and that they should be recording their time.

So what does this mean for you and me?  First, sexual harassment is still work–don’t do it.  Don’t follow Ammer’s (David Hasslehoff’s character) example in Click.  Second, if you are a manager, review the hour and wage rules with your HR or corporate counsel.  If you are an employee, check to see if you are exempt, and if you are, examine the FLSA rules to see if this is correct.  If you are not exempt, consider your choices.  If you like your job, enjoy what you do and feel that you are fairly compensated, then do nothing.  If you don’t feel fairly compensated, discuss it with your manager.  Don’t threaten a lawsuit, just ask for a review of the FLSA rules to see if you really are exempt.

Bringing up FLSA rules could jeopardize your job.  If you’re right, you are protected by whistle-blower laws.  The problem with that is that I could not “blow the whistle” on a firm where I worked, get fired, and then go back to work for the same company–at least not in the same group.

If you want to pursue FLSA, think long and hard about it.  Many if not most companies violate the rules.  How much is it worth to you?