Apple Overtime Lawsuit May Alter Tech Stock Compensation Practices
Apple faces a lawsuit over stock compensation, potentially affecting 2,400 employees.
Why it matters: The lawsuit may lead to increased compliance scrutiny on stock-based pay, impacting tech sectors' payroll policies and financial liabilities.
- Lawsuit filed in March 2023 over Apple's stock-based pay policies.
- Up to 2,400 employees may be affected by overtime calculation exclusions.
- Federal judge certified the collective action in November 2023.
- Trial set for May 2026 in Northern District of California.
Apple is embroiled in a class action lawsuit alleging that its stock compensation practices have resulted in the underpayment of overtime wages. This suit, filed on March 23, 2023, claims Apple's failure to include Restricted Stock Units (RSUs) in overtime pay calculations violates both federal and state laws.
The plaintiffs, in Costa et al. v. Apple, Inc., argue the omission of RSUs breaches the Fair Labor Standards Act (FLSA) and laws specific to California and New York. RSUs—forms of stock awards that vest over time—are argued to be part of employees' earnings and therefore should be included in overtime calculations.
The lawsuit, conditionally certified as a collective action under the FLSA in November 2023, could impact up to 2,400 employees. A broader group is eligible as class certification under state laws was confirmed by February 2025, expanding the potential financial implications for Apple significantly.
Apple's case, slated for trial in May 2026 in the Northern District of California, emphasizes the need for tech firms to meticulously refine their compensation strategies. Michele R. Fisher, the plaintiffs' attorney, notes the potential for substantial recovery. Bloomberg Law highlights this lawsuit as a precursor to stricter compliance in stock options' role in wage calculations, urging tech companies to review their policies to align with federal and state wage statutes.
By the numbers:
- 2,400 — Estimated number of employees potentially affected by the lawsuit
- May 2026 — Scheduled trial date in Northern District of California
What's next: Class certification under state laws by February 2025 will allow more employees to join the suit.