IBM Again Faces Allegations of Targeting Older Workers in Layoffs

Lawsuit says the company pushed longtime workers out because of their age and tenure, then coerced them into waiving their rights

IBM logo on a building
Photo: Matthias Balk/picture alliance/Getty Images
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Last September, IEEE Spectrum reported on a class action lawsuit filed on behalf of three former IBM employees who say their firings were part of a pattern of age discrimination by the company. IBM adamantly refuted the accusations, insisting that any changes in its workforce were “about skills, not age.”

But the verity of that statement is being challenged once again.

This week, four former IBM employees filed suit in a U.S. federal court, claiming that they and others were fired as a result of age discrimination. Though they are not the first to level this charge, their case presents a different wrinkle than previous cases. The claimants are seeking to nullify waivers of their right to collective action in court or arbitration under the Age Discrimination in Employment Act (and waivers signed by other former employees) so they can proceed as a class to arbitration. They insist that the court should invalidate the waivers because IBM made them sign a separation agreement with the waiver in it as a condition of receiving severance pay and continuation of health care benefits.

The claimants note that IBM has discharged more than 20,000 workers over the age of 40 in the past six years. What’s more, says the filing, IBM, as part of a scheme to cloak a pattern of behavior that the fired workers see as systematic age discrimination, violated the Older Workers Benefit Protection Act. The claimants say their former employer schemed to keep its intentions hidden by ending the legally mandated practice of providing information about the ages of employees who were terminated as well as those whose jobs were spared. This, they say, was meant to help IBM carry out discriminatory “resource actions” (IBM’s euphemism for mass firings) with impunity. The claimants also say IBM took the further step of mischaracterizing each of their firings as retirements (with each one receiving a letter signed by IBM chief executive Ginni Rometty wishing them a happy retirement).

On the Facebook page “Watching IBM,” a former employee not involved in the lawsuit weighed in on “resource actions” like the ones detailed in the court filing. According to him, it was an open secret that IBM had a company-wide policy of replacing older workers by freshly minted college graduates or IBM workers who had been on the job for only a year or two. “Every older employee knew it. I had my best appraisal in 10 years, exceeded quota, and was told my job was ‘eliminated’ after 35.5 years—but I had to train another employee for my job?”

In a press release issued the day of the court filing, an attorney for the fired IBM workers said, “By filing this lawsuit, we are sending IBM the message that its openly lawless and deceptive behavior must stop now.”

For its part, IBM is sure that the lawsuit will come to naught, despite several attempts to show that the company has targeted older workers. An IBM spokesperson told IEEE Spectrum that “the plaintiffs legal theory will fail, as similar cases have, and we are confident IBMs agreements are valid and lawful. IBM does not discriminate, and makes its employment decisions based on skills, not age.” 

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