Ruling Paves Way For $30M Payout In Overtime Case

Law360—Braden Campbell

A class of Computer Sciences Corp. systems administrators are looking at about $30 million in unpaid overtime and damages after a Connecticut federal judge resolved a series of remedies questions left open after their December jury win, the workers’ attorneys said Tuesday.

In the most notable portion of her Friday ruling, U.S. District Judge Janet Bond Arterton said CSC must pay the 1,000-strong class years of overtime at one-and-a-half times their regular wages rather than the lower fluctuating workweek rate, which starts at just under half their regular pay for extra time and drops from there.

Judge Arterton said “there is no question” CSC did not pay the workers extra when they worked more than 40 hours, which the U.S. Department of Labor says businesses must do before they can pay out OT at the lower rate.

“The [fluctuating workweek] method cannot be applied under the DOL’s interpretive rule codifying the method, which expressly requires the contemporaneous payment of overtime in order to establish the method’s applicability,” she said.

The workers’ attorney, Jahan Sagafi of Outten & Golden LLP, said Tuesday the ruling eliminates a “powerful incentive for companies to misclassify workers as exempt and require them to work as many hours as possible.”

“The lower the penalty for violating the law, the more tempting it is to violate the law,” Sagafi told Law360. He said he estimates CSC owes his clients about $15 million under federal wage law and $15 million under California and Connecticut law, but would owe much less had Judge Arterton found CSC owed overtime at the fluctuating workweek rate.

Judge Arterton also found that CSC must pay the workers liquidated damages, an additional penalty equal to the amount of unpaid wages that courts assess on businesses that violate the federal Fair Labor Standards Act in bad faith. Because the jury found CSC “willfully” violated the FLSA, which lets the workers sue for three years’ worth of wages, it can’t be found to have acted in good faith under Second Circuit precedent, Judge Arterton said.

“Even if the court, in the absence of comparable Second Circuit authority, is not compelled to find that defendant did not act in good faith, defendant provides no convincing argument in support of its position and relies on the same evidence and arguments … as it did in seeking to set aside the jury’s willfulness finding,” Judge Arterton added.

The judge also ruled that the workers are owed the greater of state or federal damages where the laws overlap, and she denied the workers’ requests to extend their claims period and issue an injunction ordering CSC to pay them overtime going forward, among other more minor matters.

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CSC previously appealed Judge Arterton’s September order denying its request that she set aside the jury’s verdict. Attorneys for the company did not immediately respond to a request for comment on the ruling and the plaintiffs’ damages estimate.

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The workers are represented by Outten & Golden LLP, Feinberg Jackson Worthman & Wasow LLP, Lieff Cabraser Heimann & Bernstein LLP, and Susman Duffy & Segaloff PC.

The case is Joseph Strauch et al. v. Computer Sciences Corp., case number 3:14-cv-00956, before the U.S. District Court for the District of Connecticut.