Hagens Berman Announces General Electric's Aircraft Engine Division Target of Class-Action Lawsuit; Suit Claims Company Misclassified Workers to Avoid Overtime, Other Benefits

Business Wire, August 20, 2002

Business/Legal Editors

CINCINNATI--(BUSINESS WIRE)--Aug. 20, 2002

A group of General Electric (NYSE:GE) employees working in the company's aircraft engine division (GEAE) today filed a proposed class-action lawsuit claiming that the company violated federal and state labor laws by systematically misclassifying managers and other employees as salaried professionals while treating them as hourly wage earners to avoid paying overtime and other benefits.

Filed on behalf of the plaintiffs by Steve Berman, managing partner of the Seattle law firm Hagens Berman, in United States District Court in the southern district of Ohio, the suit seeks awards of back pay, liquidated damages and statutory damages to all proposed class members.

According to the suit, GEAE treats certain managers as salaried employees under the federal and state wage and hour laws even though they do not qualify for such exemption. The suit also contends that GEAE's employment policy requires each employee to work a forty-hour workweek for a fixed salary, but when the managers work less than forty hours a week they are reprimanded.

GEAE also enforces a policy in which these employees are subject to salary deductions for absences, including part-day absences, from work. According to the suit, these deductions are automatically made from either the employees paid time off or directly from pay, a practice not consistent with their exempt status.

The complaint also details cases in which exempt employees are required to record any tardiness, and full or partial-day absences, allegedly for record-keeping purposes only, yet the computer system automatically deducts this time from their vacation time or their salary, the suit alleges. The suit contends that these improper deductions are reimbursed, but only after employees bring the matter to GEAE's attention.

The suit also claims that employees are expected to work overtime hours but GEAE fails to compensate them for that time stating that they are classified as exempt employees under the Act and therefore not eligible for overtime pay. In some instances, these employees are randomly selected to receive "planned overtime" compensation but are paid straight time rather than one and one-half times their wage rate.

The proposed class includes all current and former salaried managers employed by GEAE. GEAE is a subsidiary of the publicly held General Electric Company with its headquarters located in Cincinnati, Ohio.

Steve Berman is managing partner of Hagens Berman, a law firm with offices in Seattle, Los Angeles, and Phoenix. Recently named co-lead counsel in litigation to recover losses from Enron employees' retirement funds, Berman is a nationally recognized expert in class-action litigation. Berman represented Washington, Idaho and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. Berman also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement of more than $850 million, and the proposed $92.5 million settlement of The Boeing Company litigation. Other notable cases include litigation involving the Exxon Valdez oil spill; Louisiana Pacific Siding; Morrison Knudsen; Piper Jaffrey; Nordstrom; Boston Chicken; and Noah's Bagels.

Details of the suit including copies of court documents can be found at www.hagens-berman.com