Federal Jury Rules Against DXC; Lawsuit Demanding Overtime Pay Could Force Changes In How IT Workers Are Classified And Paid

IT systems integrators and solution providers may be re-reading their HR manuals now that a group of former CSC (now DXC Technology) systems admins has notched a victory in federal court claiming their company willfully misclassified and underpaid its employees.

In a decision that could have repercussions for the way IT services firms classify and compensate employees, a federal jury in Connecticut has ruled that Computer Sciences Corp. denied overtime pay to salaried systems administrators nationwide.

The New Haven, Conn., jury decided Wednesday that CSC had "wrongly and willfully denied overtime pay" to about 1,000 current and former systems administrators, despite the fact that those admins were salaried employees classified as "Professional" or "Associate Professional," according to Feinberg, Jackson, Worthman and Wasow, the firm that represented the plaintiffs in the class action suit filed in 2014.

Hewlett-Packard Enterprise spun off its $19 billion enterprise services business last April and merged it with CSC into the renamed DXC Technology. In a brief statement to CRN, a DXC spokesman said the company intends to appeal the decision.

[Related: DXC Technology's Cost-Cutting Efforts Remain 'On Track' As Company Reduces Workforce By 4 Percent]

"Technology companies across the country should be waking up this morning and looking to see if they have large groups of workers that need to be reclassified," Todd Jackson, an attorney with Feinberg Jackson, said in a statement. "Companies are learning that they can't willfully underpay thousands of workers and hope to get away with it."

As demand for skilled IT workers climbs, the likelihood that those workers will be denied fair compensation diminishes, said Scott Miller, director of data center at St. Louis, Mo., solution provider World Wide Technology.

"As market demand continues to outweigh IT skills, I suspect that people's willingness to put up with that type of bad behavior will be limited," Miller said.

Dan Serpico, CEO of FusionStorm, a San Francisco, Calif.-based solution provider, said labor laws like those CSC was alleged to have violated are complicated, but most firms interpret them in good faith.

"Labor laws can be complex as far as exempt and non-exempt status, which can vary by state," Serpico said. "Good intent and good management of these complex policies will lead to good, profitable businesses and good employee morale, and my guess is that the vast majority of companies strive for both."

The company argued that "professional" and "associate professional" job titles are exempt from overtime pay requirements under federal, Connecticut and California law. The jury, however, found that the workers should have been classified as nonexempt and paid overtime.

The CSC systems administrators do the installation, maintenance and troubleshooting work on IT hardware and software, and are frequently assigned to be "on call" so that clients can be assisted at all times. The plaintiffs in the case argued that because they did not make policy, design systems or do any programming, they are protected by federal and state overtime laws like the Fair Labor Standards Act.

The act requires that nonexempt employees are paid time-and-a-half when they work more than 40 hours a week. The jury found that CSC had willfully violated overtime laws, which could trigger additional damages.

Determining and awarding damages is the next phase of the case, and could take months. CSC in 2005 agreed to pay $24 million to settle overtime claims brought by about 30,000 tech support workers. Plaintiffs in that case were represented by Oakland, Calif., law firm Lewis, Feinberg, Renaker and Jackson, the predecessor to Feinberg Jackson.