IBM must face jury over worker’s unpaid overtime claim

By his own sworn account, IBM’s program managers ran his days: his assignments, his hours and, in effect, his pay. He says they capped him at a paid 40-hour week while assigning work that took far longer, and discouraged him from ever billing overtime. When he told a Viva representative he was “working 80 hours a week,” he testified, the reply was, “If you want the job, just do it.” His understanding of the overtime policy, he said, was to “keep your mouth shut.”

After he was terminated in July 2021, he invoiced 1,000 hours of unpaid overtime. Viva did not pay. He sued IBM and Viva under the Fair Labor Standards Act – the federal minimum-wage and overtime law – and District of Columbia wage laws.

IBM and Viva moved to end the case. They argued the contractor setup was his idea, that they paid his corporation in full each week, and that any shortfall was the corporation’s doing, not theirs.

The court refused. Using the “economic reality” test, it found a jury could look past the labels and treat IBM and Viva as his true employers, citing evidence they controlled his schedule and tasks and held the power to fire him. The court was careful to say it was not deciding the case, only letting it proceed.

The takeaway for HR is blunt. Calling someone a contractor, or paying through a personal corporation, does not settle their status. What counts is who directs the work. Telling a worker not to log overtime does not make the hours vanish – it can become proof the employer knew. Accurate timekeeping, and a hard look at control rather than contract wording, is the safer ground.