Siebel to Pay $27.5 Million in Overtime Settlement

Siebel reportedly settled a class action lawsuit filed on behalf of its software engineers for US$27.5 million. The software maker was accused of violating overtime laws between 2000 and 2005.

Approximately 800 employees who worked for Siebel, which was acquired by Oracle (Nasdaq: ORCL) in January, will be receiving on average of $27,000 each, assuming the agreement is approved at a scheduled hearing in April 2007.

It's a nice chunk of change for Siebel employees, especially considering the events at the company over the last year, said Sheryl Kingstone, a Yankee Group analyst.

"Some Siebel employees wound up losing their jobs after the acquisition," Kingstone told CRM Buyer. "Before the acquisition, there was a lot of uncertainty and pressure to perform."

In that environment, pressure -- subtle or overt -- to work long hours was likely to be resented by employees.

A White Collar Issue

Accusations of violations of overtime requirements are rare in the IT industry, where long hours are assumed to be part of the job.

Labor activists tend to overlook the overtime issue in favor of focusing their attention on instances of more serious abuse in the workplace, such as the operation of sweatshops or the unfair treatment of illegal immigrants.

With the Siebel suit nearing its conclusion -- and with the job market tightening, especially in the always competitive IT industry -- labor-related issues will probably arise with greater frequency.

Payback Time

A massive lawsuit filed by tens of thousands of employees against IBM (NYSE: IBM) in January 2006 charges Big Blue with failure to pay overtime wages in violation of federal and state labor laws.

The Siebel settlement follows wage-and-hour suits in other industries, such as financial services, where employees tend to work long hours as well.

For Oracle, the settlement is no doubt a relief. Earlier in 2006, the company was forced to pay for the misdeeds of another acquired company, PeopleSoft. It agreed to pay the Justice Department about $98.5 million to settle claims that PeopleSoft overcharged government agencies for several years.