3M Co. has offered to pay up to $12 million to about 7,000 current and former employees to settle a long-running age discrimination suit. If approved, the settlement would put the controversial tenure of former CEO James McNerney Jr. further back in the company's rearview mirror.
The Maplewood-based giant, whose global workforce of 75,000 includes more than 10,000 people in Minnesota, said Friday that it had filed "a joint motion for preliminary approval of a class action settlement" in Ramsey County District Court. The settlement would have to be approved by the court.
In a statement, 3M said the settlement does not include an admission of liability but provides "a reasonable resolution that allows the company to avoid ongoing investments in time and legal fees." 3M and attorneys for the workers declined to comment further. The six people named as plaintiffs in the suit filed in 2004 either could not be reached or declined to comment.
Twin Cities attorneys specializing in employment law said $12 million doesn't appear to be a large settlement figure, given the number of employees who could receive payments. Marshall Tanick said 7,000 is a fairly large number for a discrimination suit and one reason the suit had been closely watched by employment attorneys here and across the country.
Another reason, Tanick said, is because the suit focused on a management practice established by McNerney, who led the company from 2001 to 2005. McNerney, who came to 3M from General Electric, instituted at 3M a quality and training program called Six Sigma aimed at reducing service errors and product defects.
The employees' suit alleged, in part, that Six Sigma practices at 3M tended to result in the promotion of younger workers. Older employees were given lower performance ratings, shut out of leadership training, denied promotions, given smaller pay increases and fewer stock options and terminated in disproportionately higher numbers than younger employees, the suit said.
"This lawsuit became the poster child of Six Sigma," Tanick said.
Mary Benner, an associate professor at the University of Minnesota's Carlson School of Management, said she is not aware of any research that says Six Sigma could result in discrimination. When she was at the University of Pennsylvania's Wharton School, Benner co-authored a widely read study of Six Sigma that said the practice could dampen the creative process that leads to developing new products and technologies.
"The hype about it has calmed down in recent years," Benner said.
3M continues to employ Six Sigma, but has toned it down under current CEO George Buckley, who has said it is suitable as a management practice in factories, but not research laboratories.
Staff writer Steve Alexander contributed to this report. Susan Feyder • 612-673-1723