In 2018, the nonprofit investigative newsroom ProPublica reported that IBM had been making massive personnel changes. Some of those changes seemed intentionally geared toward shedding older workers.
Over five years, the tech giant had cut the jobs of more than 20,000 U.S. workers aged 40 and older, and these workers accounted for about 60% of all jobs cut. A confidential memo indicated that this was done to “correct seniority mix.”
“Correcting” a company’s seniority mix could be a decision to cut older workers who have built up higher salaries and better benefits and replace them with younger, cheaper workers. Doing that intentionally would violate the Age Discrimination in Employment Act (ADEA) of 1967.
Now, the Equal Employment Opportunity Commission (EEOC) has completed its investigation into the allegations and has concluded that IBM indeed systematically discriminated against older workers during the layoff period between 2013 and 2018.
The agency is not simply alleging that IBM had certain policies that happened to disproportionately affect older workers. It is alleging that the age discrimination was an intentional policy. Indeed, its investigation allegedly found “top-down messaging from (IBM’s) highest ranks directing managers to engage in an aggressive approach to significantly reduce the headcount of older workers to make room for Early Professional Hires.”
Specific practices were meant to replace older workers with younger ones
The EEOC’s findings were even more stark than ProPublica’s. The agency determined that over 85% of those laid off between 2013 and 2018 were 40 or older. The ADEA protects workers 40 and older from discrimination in all aspects of employment, including layoffs and terminations.
Specifically, the EEOC found that IBM:
- Laid off older workers even though they were high performers
- Earmarked money saved by terminating older workers for use bringing in “early professional hires”
- Laid off older workers claiming their skills were out of date, only to bring the same workers back as contractors with less pay and benefits
- Routinely denied workers information they were legally entitled to that could have revealed the age discrimination
IBM insists that it makes no job decisions based on the employee’s age. It also contends that its hiring and firing is handled by individual units based on business needs and without any centralized decision-making.
The EEOC explicitly found that defense “does not withstand scrutiny.”
The next step is for the EEOC to attempt to negotiate an out-of-court settlement between IBM and the ex-workers it represents. If that negotiation fails, it could then file a lawsuit.
Has your company attempted to “correct” its seniority mix to save money or to promote other goals? An employment law attorney may be able to help.