Yahoos could hardly expect a generous gift in a year when the company went through two rounds of layoffs; failed acquisition talks with Microsoft amidst a neverending rumor mill; countless defections — including the departure of Qi Lu, Yahoo's top search scientist, to Microsoft; and a stock that dropped into the single digits. But nothing might have actually been better than the empty gesture of giving money to other people in lieu of a gift.

Getting nothing was the problem Yahoo's settlement winners had two years ago, when Yahoo's managers forced them to work unpaid overtime to launch a new online-advertising platform called Panama — the one that was so effective that Yahoo turned to Google for help selling ads earlier this year. The suit, Salsgiver v. Yahoo, has been settled and checks have been issued, with some plaintiffs getting $10,000 to $12,000, before tax, for their troubles. (One plaintiff tells Valleywag that 75 percent of the settlement came in the form of taxable salary, with the rest paid as a penalty.)

And what did Yahoo get for its troubles? A system that launched too late and rapidly proved outmoded. The reason why Yahoo ran up overtime for Panama was an abundance of caution; it spent a long period of time testing the new system, to make sure advertisers wouldn't encounter bugs. But the announcement that Panama would be late shocked Wall Street; by the time it rolled out in 2007, Yahoo's stock had already taken a hit, and continued to slide as CEO Terry Semel quit that summer.

He was replaced by founder Jerry Yang, whose 18-month reign has proved even more disastrous. The stock tumble prompted by Panama's delays opened the door for Microsoft's $44.6 billion takeover. Yang's clumsy negotiations with Microsoft dealt another blow to morale at an already unhappy company. Panama has been replaced by another platform, APT, which also shows no signs of beating Google.

The settlement of the Salsgiver lawsuit closes the door on the Panama debacle. But the $10 million the company is said to have shelled out is only a down payment on all the bills coming due from Yahoo's long eyars of mismanagement.

They include a planning document for "Project Nightwatch" — an effort to quantify the amount of overtime worked by Yahoo's datacenter employees — which refers to finance director Rich Wong and operations director David Bills. Anyone know more about Nightwatch or Salsgiver? Let us know. Here's the tip and some of the evidence we received:

I'd like to provide you with a nice juicy tip about events inside Yahoo! It turns out that Yahoo is being sued by their California-based network engineers because they have improperly classified them as salaried staff, and therefore not eligible for overtime pay. Yahoo is going to announce the settlement sometime next month. The payment will be paid to employees on January 7, 2009.

The original lawsuit was filed about 18 months ago in Southern District court of California, by a former employee named Salsgiver (suit name is Salsgiver v. Yahoo!). The lawsuit gained class-action status, and was expanded to include about 600 current and former employees.

Next month, Yahoo is going to announce to the press that it has settled the lawsuit. I don't know if the press release will say the settlement amount, but it's just under $10 Million. Of that amount, the lawyers will receive about $2 million, and the employees who elected to join the class action will split the rest. The employees eligible to join the class were notified earlier in the year, and the deadline to join or opt-out was early September.

Here's the weird thing: only half the eligible employees responded that they would like a payment. The lawsuit pot is a fixed amount, so the fewer employees who join, the more each employee stands to receive. If all employees had joined, each would have received an average of $12,500 a piece.
Since only half the employees opted in, each will now receive an average of $25,000 each. Maybe they didn't want to make the company angry, or they thought there might be retribution from their managers if they joined.