IBM Faces New Age Discrimination Lawsuit for Targeting ‘Gray Hairs’

In a lawsuit filed by four former employees, IBM is again accused of age discrimination for firing older employees and refreshing its workforce with “early professionals.”

The employees are suing in federal court under the Older Workers Benefit Protection Act (OWBPA) of 1990, which Congress enacted as an amendment to the Age Discrimination in Employment Act (ADEA) of 1967 to prevent companies from doing exactly what IBM is accused of. The lawsuit says that, in 2014, IBM set a plan in motion (as its current CFO and VP of Human Resources allegedly put it) to “correct [its] seniority mix.”

IBM is also accused of ending a practice where, during layoffs, the company provides comparator information to employees detailing job titles, ages, and number of employees selected for termination. During the layoffs affecting the plaintiffs in the most current lawsuit, IBM allegedly altered waiver language so laid-off employees would be prevented from collectively suing under the ADEA. From the lawsuit:

IBM’s waiver specifically prohibited workers from pursuing their claims collectively, even in arbitration. IBM sought to deprive its workers of the essential economies and advantages from pursing their ADEA claims together and instead to burden them with the limitations and costs of bringing individual actions challenging the same discriminatory practices in secret arbitrations separate from each other.

Citing an internal report, the lawsuit says IBM’s attitude towards older workers was generally dim. The report described older employees as “old heads” and “gray hairs,” and led the consulting department conducting the study to reach this shocking conclusion:

[Younger workers] “are generally much more innovative and receptive to technology than baby boomers.”

Aside from layoffs, this study played a part in IBM re-branding itself as friendly to younger professionals. In 2014, as it was laying off older employees, it launched an internal blog called “The Millennial Experience,” and spun up a Twitter hashtag: #IBMMillennial. IBM also started the “Millennial Corps,” a group of select younger employees who would advise IBM’s senior leadership on business decisions.

This was about the time IBM was also publishing newsroom fodder such as “IBM Study: The Real Story Behind Millennials in the Workplace,” which set out to debunk ‘myths’ about Millennials. (Surprisingly appropriate is ‘Myth 1: Millennials’ career goals and expectations are different from their elders (i.e. unrealistic),’ which states: “As it turns out, Millennials want financial security and a diverse workplace just as much as their older colleagues.” IBM has a poor sense of irony.)

To provide cover for its targeted layoffs, the lawsuit also alleges IBM manipulated its performance review process, actually ordering managers to give older tech pros lower ratings, and instituting a bogus score for employees based on their review. A ProPublica report tells the story of Cheryl Witmer, who was with IBM from 1984 to 2016. After an unexpected bad performance review that year, she was told she was retiring. After correcting her manager that she was indeed not retiring, her manager said, “Yes, you are.”

Speaking to Yahoo News, Joseph Sellers of Cohen Milstein Sellers & Toll, one of two firms representing the plaintiffs, said he has “not seen before an effort like IBM’s to allegedly make an end-run around the OWBPA, and this lawsuit is challenging this unlawful tactic,” adding: “IBM is relying on unlawful and unjustified stereotypes to remove older workers who have decades of tech experience, and this suit is also challenging that.”

IBM tells DailyCamera: “The plaintiff’s legal theory will fail, as similar cases have. We are confident IBM’s agreements are valid and lawful. IBM does not discriminate, and makes its employment decisions based on skills, not age.”

But OWBPA or ADEA comparator information allows laid-off employees to decide if they’re going to pursue legal action. By adjusting the language of waivers (which employees typically sign in the heat of the moment) to prevent employees from filing class-action lawsuits, a company creates an unfair advantage. “IBM against one person is not a fair fight,” said David Webbert, who is also named as plaintiff’s counsel in the lawsuit. “IBM against thousands of people who’ve been laid off because of their age, that’s a legitimate legal proceeding. IBM is afraid of a fair fight.”

It would also be fair to say IBM is afraid of another fight. This isn’t the first time it’s been sued for age discrimination. At some point, tech pros begin to identify ongoing questionable behavior as corporate culture. Lawsuits like this could make them less inclined to pursue a career at a place like IBM.

8 Responses to “IBM Faces New Age Discrimination Lawsuit for Targeting ‘Gray Hairs’”

  1. James Boyan

    Like Cheryl from the article above, I was with IBM from 1984 thru 2016 (with a 3 year gap in there where I had left for other opportunities in 1993 but hired back as a permanent employee in 1996). My last review was not an unfavorable one, but I was informed in March 2016 that I was being “retired” anyway. They informed me that since I was 55, I could access my 401K money to live on without penalty. Very considerate of them to “research” this for me. They even gave me a one month severance package before kicking me to the curb.

  2. As a decision maker and signatory authority of significance, this sort of activity ensures I’ll not purchase or authorize purchase of IBM again. Others at my level should follow suit.

  3. Farrell O'Connor

    I worked in Technical Support and I was at least 20 years older than my coworkers in our group. Also, IBM acquired a Company called Netezza and the pay scale for Netezza was higher than IBM’s (so I was told). IBM agreed to keep the newly acquired employees at their Netezza pay. So now I have two strikes against me! IBM started to give me less and less work to do, so when my performance review was done, they said I was not as productive as my much younger coworkers, imagine that! So to me, it was quite obvious they were essentially pushing me “out the door”.

  4. Roger Dozier

    My company did this also. One reason was to avoid medical coverage for older employees. I was also impacted but they eliminated my position and offered me a lower position with a $20K reduction and loss of my annual bonus worth another $10-15K/year to make me retire. Many older retires were eliminated to avoid retirement expenses just before they qualified with 30 years of service.