IBM is Taken to Court – Might Your Company Be Next?

Posted on Posted in Age Discrimination
For two decades IBM has been heralded – and promoted itself – as a global leader in the policies and practices that promote Diversity & Inclusion. The company’s many innovation initiatives and first-in-industry best practices have helped to shape the field.

Thus it came as no surprise when on March 20 this year Catalyst, the advocate and arbiter of women’s advancement in corporate America, honored IBM for its “focus on technical women’s career development and advancement… and engaging as a good corporate citizen.”

A true surprise came two days later when ProPublica released a searing broadside on IBM’s alleged systematic termination of as many as 20,000 older workers – and their replacement with Millennials. Titled “Cutting Old Heads at IBM,” the article claimed that over the last decade the tech pioneer has systematically planned and executed a multi-faceted campaign to eliminate these longtime employees and replaced them with younger tech-proficient employees who resemble the profile of Silicon Valley.

The effort appears to be a well-designed and artfully lawyered initiative that stays just below or steps around any age discrimination tripwires. If accurate, does this lengthy piece of investigative journalism read more like a paean to diversity and inclusion or a tale of a new homogeneity and exclusion?

 

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When allegations turn to litigation, the stakes increase dramatically

Ex-IBMers around the country have claimed age discrimination and filed lawsuits in several states, reportedly leading the EEOC to begin a national investigation. Into this simmering conflict comes Shannon Liss-Riordan. For those unfamiliar with her profile, she is the aggressive class action lawyer who has successfully taken on Uber and other “gig” employers for misclassifying employees as contractors. Her strong track record suing employers for various forms of discrimination has led to large paydays.

A recent Bloomberg article describes her as “a pit bull with a Chihuahua in its mouth.” The sobering warning in the Bloomberg article:

“If she’s successful, IBM may be on the hook for hundreds of millions of dollars in damages and may take a hit to its reputation as a company once renowned for being among the world’s most benevolent employers.” 

Age discrimination is in fact the last largely acceptable prejudicial practice. If this story described a little-known and mediocre company gone rogue, it would be lamentable. But similar allegations and lawsuits are popping up in many other companies, including some of the best known and celebrated. Are these longstanding biases and practices and the growing backlash against them news of the moment or the beginning of a trend?

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How changing demographics and earnings challenge yesterday’s assumptions

Unlike previous generations, the massive Boomer cohort is leaving the workforce at the rate of three million people a year, and will do so for the next twelve years. No longer young, they are facing insecure prospects in retirement. They brought multiple changes to the workplace, from flexible work to parental leave of their young families. Now they face different challenges.  As the Wall Street Journal reports, “A Generation of Americans is Entering Old Age the Least Prepared in Decades.”

They face diminished pensions, Recession-depleted savings and stagnant and threatened Social Security payments. Their response is not to accept old assumptions about early dismissal. Many aging workers want and need to work longer and avoid early and sudden termination. Like the IBM employees, they are unlikely to go quietly. They will organize and fight for fairer futures.

What are wise employers to do?

In these times of tight labor markets and the potential loss of critical skills and knowledge, companies can meet major talent goals and avoid brewing conflict by re-thinking their approach to their aging workforce. A broad review of policies and practices may be in order.

  • Do you have unexamined and arbitrary mandatory retirement ages?
  • Is career-long training offered to all employees to enhance their value as they age?
  • Do you offer flexible and phased retirement to capture departing knowledge?
  • Are your hiring systems designed to be talent-focused and age-blind?

These and other practices that support an aging workforce are feasible and affordable. In the end, the best defense against age discrimination accusations and litigation is truly inclusive behavior. It is not too late – and maybe the perfect time — to discard old assumptions and practices and give your company and workforce a second chance.

Paul Rupert, Founder & CEO
Rupert Organizational Design
301-873-8489

Since 2000, Rupert Organizational Design has been building respectful workplaces. Our innovative problem-solving and over four decades of expertise on Workplace Flexibility and Phased Retirement is transforming organizations. They key to our approach is Mutual Respect.

Rupert Organizational Design client partnerships range from major national and global firms, to hospitals and small businesses in achieving superior talent and operational successes.

 

If you’d like a consultation on building a respectful workplace, contact us at info@rupertorgdesign.com.