IBM Faces Age Discrimination Lawsuit

Company believes layoffs were 'valid and lawful'

older woman leaving office with a box of belongings

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By:

Kenneth Terrell

Published April 02, 2019

A new lawsuit claims that IBM has violated a key part of a federal law that protects older workers from age discrimination. If successful, the lawsuit could open the tech giant to collective action from thousands of employees it has laid off over the past five years.

IBM maintains it didn’t discriminate and says it believes the lawsuit will fail.

Four former IBM workers, who were all in their mid-50s when they were laid off in 2016, filed their lawsuit March 27 in the federal court for the Southern District of New York. They say that in order to get severance packages, they had to sign waivers affecting their rights, even though the company didn’t give them information about the ages and positions of the employees who were being terminated and those who were retained.

Since 1990, the federal Older Workers Benefit Protection Act (OWBPA) has required employers to disclose this information to workers age 40 and older who are part of a group layoff, along with details about the criteria used to pick employees for discharge. (These disclosures are not required in some cases of voluntary retirement options.) AARP was one of the primary advocates for the OWBPA, which Congress passed in order to help older workers — who often face more difficulty finding new jobs quickly — decide if they might have been victims of discrimination before they sign for a severance package out of economic need.

“For years, IBM has systematically removed older employees from its workforce and concealed from them the information with which they could detect the discriminatory nature of these actions,” Joseph M. Sellers, one of the attorneys for the plaintiffs and a partner at Cohen Milstein Sellers & Toll, said in a statement. “IBM — and the technology industry more broadly — cannot push ‘baby boomer’ employees out the door based on unlawful stereotypes.”

The plaintiffs are asking to be released from the waivers and for permission to pursue their claims collectively in arbitration, a request that might allow thousands of former IBM employees to join in. An article by investigative journalism outlet ProPublica estimated that over the past six years IBM has let go of more than 20,000 workers in the United States who were at least 40 years old. Workers who signed the waivers believed they were unable to sue collectively, the lawsuit says. Without a collective suit, it is hard for individual workers to bring an age discrimination case because attorneys typically don’t find such individual cases worth the cost.

In a statement about the case, IBM said “the plaintiffs’ legal theory will fail, as similar cases have, and we are confident IBM's agreements are valid and lawful."

"IBM does not discriminate, and makes its employment decisions based on skills, not age,” said Ed Barbini, an IBM spokesman.

According to the lawsuit, in 2014, IBM started working to “correct [its] seniority mix” by removing older workers and replacing them with younger employees, who the company’s consulting department said “are generally much more innovative and receptive to technology than baby boomers.” At that time, IBM stopped providing older employees who were part of group layoffs with the demographic information required by the OWBPA, the lawsuit says. Instead, the company asked these workers to sign a revised form that didn’t force them to waive any potential age discrimination claims but instead required them to pursue these complaints through individual arbitration.

The new lawsuit challenges whether this waiver is valid without the OWBPA information.

When it stopped providing the OWBPA disclosure information in 2014, IBM said the decision was the result of privacy concerns raised by some employees. The company also said then that the individual arbitration requirement in the waiver form was legally valid.

The lawsuit also states that, as part of its efforts to eliminate older employees, IBM supervisors in 2014 began to give the plaintiffs lower scores on their annual reviews.

“I did my job very well and received glowing remarks on my annual evaluations for 33 years,” said a statement from Cheryl Witmer of Firestone, Colo., a plaintiff in the complaint who was laid off when she was 57. “Suddenly in my 34th year, I was unfairly downgraded in my annual evaluation. Nothing about my work changed; what changed is that IBM decided to replace me with a much younger worker.”

In addition to using the courts to fight incidents of potential age bias, advocates for older workers also are pursuing new legislation. Congress is considering the Protecting Older Workers Against Discrimination Act, which would improve their protections.

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