Facts

The plaintiffs were a class of about 600 computer programmers who worked for defendant Electronic Arts Inc. (EA), a computer-gaming company. Michael Hasty and John McDonald were the lead plaintiffs.

For about 19 months commencing in July 2004, Hasty and McDonald claimed they performed chores such as producing and copying images in order to create effects used in the motion picture, television and theatrical industries. They asserted that, at times, they worked as many as 80 hours per week but were never paid overtime because EA told them they were exempt employees.

PLAINTIFFS' CONTENTIONS:
On behalf of themselves and others similarly situated, Hasty and McDonald brought a class action suit against defendant. They alleged defendant failed to pay overtime wages and violated various provisions of the state labor code and business and professions code. In particular, plaintiffs claimed defendant improperly classified its computer programmers as exempt employees. In addition, plaintiffs claimed defendant repeatedly and willfully violated California Labor Code Sections 510, 201, 202 and 204 and violated California Business and Profession Code Section 17200. The plaintiffs also emphasized that in October 2005, defendant had settled a similar class action lawsuit for $15.6 million with other computer engineers who claimed they were owed overtime wages.

DEFENDANT'S CONTENTIONS:
The defendant maintained that the programmers were exempt from overtime requirements pursuant to California labor law, which exempts from overtime employees who perform intellectual work and earn at least $41 per hour and employees who perform learned professional work that is intellectual or creative in nature.

The plaintiffs countered that the programmers should be eligible for overtime since their work was not creative and since they did not have discretion to control the manner in which they worked.

Injuries

The plaintiffs sought an unspecified amount for back pay, statutory penalties, damages, punitive damages, restitution and injunctive relief.

Result

The defendant settled the case for $14.9 million. This amount will be distributed proportionately among the class members based on their salaries. For being lead plaintiffs, Hasty will receive $30,000 and McDonald will receive $15,000. Further, pursuant to the terms of the settlement agreement, about 200 entry-level software engineers will be reclassified as hourly workers. This reclassification will make them eligible for future overtime pay. They will also be allowed to accept a one-time grant of restricted company stock, but they will no longer receive stock options or bonuses.