Technology giant IBM targeted “grey hairs” and “old heads” for negative performance reviews so it could oust them from the company, as it formed a “Millennial Corps” and focused on hiring “early professionals,” a new age-discrimination lawsuit claims.
“In the past six years alone, IBM has discharged over 20,000 U.S. employees who were at least 40 years old in pursuit of a company-wide practice of using forced group terminations, referred to as ‘Resource Actions,’ to accomplish its goal of removing older employees from its labor force,” said the lawsuit filed March 27 by four former IBM employees. Three of them worked at the company for more than three decades, and one for more than 10 years, the suit said. All were over 55 when they were sacked in May 2016, according to the suit.
The suit alleged that IBM required employees to submit claims of age discrimination to binding arbitration, but also banned them from collective arbitration over such claims.
IBM said in an e-mailed statement that the plaintiffs’ theories have been rejected by courts including the U.S. Supreme Court. “We are confident that our arbitration clauses are legal and appropriate,” the firm said. The company added that a body of Supreme Court cases upholds arbitration agreements.
The purported purge started in 2014, with the firm carrying out a plan to fix its “seniority mix” by imposing an “aggressive performance management posture,” the suit filed in federal court in New York alleged. One in-house presentation showed that this posture meant doubling the proportion of workers receiving negative performance evaluations, so 3,000 employees could be laid off and replaced with “early professionals,” the suit claimed.
A 2016 presentation concerning one section of the company “specifically called for managers to exempt all ‘early professional hires’ from layoff, regardless of performance,” the suit claimed. “The long-serving, older employees were provided no such exemption.”
The former employees suing IBM — Steven Estle, Margaret Ahlders, Lance Salonia and Cheryl Witmer — alleged the company in 2014 began downgrading their annual performance scores, so they started receiving worse evaluations than in previous years. When they were fired in 2016, IBM falsely characterized their departures as retirements, the suit claimed.
The suit took aim at a 2006 IBM internal report on employee demographics that purportedly called older workers “gray hairs” and “old heads,” and concluded that younger workers were “generally much more innovative and receptive to technology than baby boomers.”
In 2014, IBM launched a blog called “The Millennial Experience,” the suit said. The firm also created “Millennial Corps,” a network of young workers to be consulted by senior leadership about business decisions, according to the suit.
The plaintiffs are seeking a court order invalidating IBM’s waiver against collective action, a ruling that the matter go to collective arbitration, and unspecified monetary relief.