Ingram Micro Whistle-Blower Out of a Job : Labor: Ex-employee for computer products distributor complained to federal agency that he was illegally reclassified to position exempt from overtime pay.
John Zanudo says he has paid a price for blowing the whistle on his bosses at Ingram Micro Inc. Now he isn’t working at all.
Zanudo alleges that he was forced to resign his job as a technical support representative after he spoke out against a practice that required him and several dozen other employees in his department to work lots of unpaid overtime each week.
His complaints prompted a U.S. Department of Labor review of overtime practices at Ingram Micro, the world’s largest computer products distributor with $2 billion in sales.
“I would do it again,” said Zanudo, 32, who has been out of work for more than eight months and now lives with his parents in Santa Ana. “It’s an important social issue. Americans are working longer hours for less money.”
Company officials dispute Zanudo’s claims that he was harassed and forced to quit. They say the company has complied with the Labor Department’s review, saying it was limited to a small group of employees. They declined to be more specific.
“We consider the matter solved with respect to existing employees,” said Linwood A. (Chip) Lacy, Ingram Micro’s chief executive officer. “Mr. Zanudo no longer works here and we are hopeful in resolving his concerns. We have had many discussions with him.”
Added David Dukes, the company’s co-chairman: “This company cares about its employees. It is painful to think any employee hasn’t been taken care of, because this company has a long history of caring about its employees.” He cites as an example the fact that each year the company’s hourly employees rate the performance of their managers.
“We are constantly training management, and it’s a challenge to keep every manager aware of the law,” Dukes said.
William Buhl, regional administrator for the U.S. Department of Labor in San Francisco, confirmed that Ingram Micro is under investigation for possible violation of the Fair Labor Standards Act, a 1938 federal law that governs overtime pay procedure. He declined further comment on the matter.
Zanudo alleges that the company owes him $9,600 for unpaid overtime worked between July, 1990, and June, 1991. He says the overtime resulted from the company illegally reclassifying his hourly position as a salaried job exempt from overtime pay.
Ingram Micro officials concede that the company may have misinterpreted federal labor laws but did not knowingly violate them. They say federal labor laws haven’t kept pace with rapid changes in the nature of work in the computer industry.
“This is an area of the law that is not clear,” Dukes said. “The company believed it had properly classified technical support people as exempt employees. A complaint was filed, the company explained its reasoning, the labor department found to the contrary, and we support their ruling.”
Nationwide, fewer people are filing official complaints. Last year, the federal Labor Department ordered employers to pay $117.9 million in back wages for overtime violations to 286,707 workers, compared to $135.3 million to 330,942 workers in 1990, a spokeswoman said. “People don’t want to do anything to jeopardize their jobs in such periods,” Buhl said. “It’s more difficult for us to collect overtime claims because of the high number of bankruptcy filings.”
Zanudo began working at Ingram Micro in October, 1989. He said his troubles began in July, 1990, when the company reclassified his technical support department--about a dozen people--as salaried rather than hourly workers. The change, which did not alter their duties but did include a modest salary increase, was meant to reduce costs for after-hours employee training, according to Zanudo.
Zanudo’s annual salary grew to $27,450, up from $25,708 annually when he was paid an hourly wage of $12.36, not including overtime. In his new job, Zanudo was no longer eligible for overtime. And since he used to work a lot of overtime, Zanudo figures he was actually making less per year.
Most workers might have taken the change in stride. But Zanudo, a first-year law student, discovered that federal law allows companies to convert technicians into salaried personnel only if they had supervisorial responsibilities.
Zanudo protested to his managers. The result was that he was allowed to leave at the scheduled end of the work day. Other employees followed suit and management retaliated, he alleges. Zanudo complained to the U.S. Department of Labor in June, 1991, about a month before he resigned.
In letters to Zanudo, company managers criticized him for studying at work, poor attendance, insubordination and poor work performance.
But Zanudo said such charges were trumped up, amounting to harassment and that before his complaints about overtime practices he received exemplary evaluations that ranked him fourth in a department of 15 people.
At first, Ingram Micro disputed Zanudo’s claim for unemployment insurance, alleging he was not eligible for it because he quit voluntarily. In August, an administrative director with the state Employment Development Department ruled in Zanudo’s favor because of “substantial evidence to support his claims” that he was forced to resign.
The company appealed at first but withdrew its objections in February. Meanwhile, the Labor Department performed an audit, and in December the company agreed to pay back wages.
Buhl said the agency settles most cases and it does not have the resources to handle every complaint. Generally, he said, the department’s 34 investigators in Southern California focus their attention on low-wage cases for farm workers and garment workers rather than white-collar cases such as computer technicians, who are more likely to be able to afford their own attorneys.
Zanudo said the company agreed to settle claims for unpaid overtime from about 30 employees in several departments. Sources say employees accepted about $50,000 in back-pay settlements, but Zanudo alleges that is only a small percentage of the amount that employees originally claimed.
“I’m not a crusader or activist. But there were a lot of compelling reasons I went forward,” Zanudo said. “I tried to settle through the company first. The solution is not to make technicians into salaried people because it’s not legal. The solution is that companies need to pay more or hire more people. That’s the message I want to get out.”
Darcy Roth, a former Ingram Micro marketing representative in Newport Beach, said he had the same complaints as Zanudo, though he worked before the time when Zanudo began making complaints about overtime.
Roth claims the company owes him $20,000 for unpaid overtime over a period of two years ending September, 1990. He has refused to accept the company’s offer to accept a settlement of $5,003.76.
