Ex-IBMers: Data show age bias

Karl Rabe/Poughkeepsie Journal Antonio Rivera of Poughquag, who was laid off by IBM about a year ago, shows what he found researching layoffs and the role age plays in IBM employees' likelihood of being laid off.

But what really convinced them to sue was the data. It shows older IBMers being dropped at rates that often exceed those for younger colleagues.

Just why is open to question. IBM denies age bias. The suit says IBM targeted older workers because they cost the company more, but that age underlies the results, no matter how you slice it. And the money hinging on the outcome likely runs into the tens of millions of dollars, perhaps more, a lawyer for the ex-IBMers says.

Antonio Rivera of Poughquag, a plaintiff in the suit and a principal organizer of the campaign to bring it, started going through the data and making charts after he was struck by what he saw happening to himself.

''In my group, 16 of us were let go and all of us, without exception, were over 50,'' Rivera said. ''Some of these folks had 33 years with the company.''

Numbers supplied

His analyses, and those done by another plaintiff, William Syverson of Vermont, are based on documents IBM was required by law to supply to the laid-off workers in each mass layoff. They show how many people in each job title were dropped and how many were kept -- and what their ages were.

It's painstaking work to take pages upon pages of data and itemize each entry by age and then chart it to see if patterns emerges.

''The pattern was that in the 50s 60s and 70s, they were hit consistently hard,'' Rivera said.

To test Rivera's method, the Poughkeepsie Journal followed the same footsteps, working from one of the original IBM documents. The results were quite similar to Rivera's, and showed higher layoff percentages in the older groups. The resulting chart is published above.

At IBM, spokeswoman Kendra Collins said, ''Age is not a factor when we make selections for resource actions and any charges that we discriminated against employees based on age are unfounded.''

A scholar who looked at the data provided by the Poughkeepsie Journal said it was hard to draw a conclusion as to its statistical significance without knowing other factors, including the skills of the individuals involved, which could be a reason. ''Skills rebalancing'' is in fact one factor cited by IBM in its comments on layoffs.

''Over 55, the percentages get much larger ... but the numbers of the sample are also smaller,'' said Ann Davis, economics professor at Marist College in the Town of Poughkeepsie. ''Over 65, that's a big percentage, but it's a very small number.''

Smaller sample sizes reduce confidence in whatever results appear.

''It's worthy of further study,'' Davis said, ''but we can't say anything conclusive with what we have in front of us.''

Rivera said he believes IBM set up the layoffs to affect older, higher-paid workers more, but to still appear reasonable.

''They have masters doing this,'' he said. ''They take the best statisticians so the numbers work out.''

IBM to reply to complaint

IBM can't formally reply to the complaint until it's served with it, which attorneys for the ex-employees say hasn't happened yet.

Those attorneys, from the McTeague, Higbee law firm in Topsham, Maine, have been in Poughkeepsie this weekend briefing local clients and potential new ones. Their third session is today from 10 to noon at the Best Western Inn, Route 9, Town of Poughkeepsie.

Their formal complaint, filed in U.S. District Court for northern California in San Jose Oct. 7, alleges IBM violated the Age Discrimination in Employment Act and a related law, the Older Workers Benefits Protection Act, or OWBPA.

But it also asserts IBM trampled the Employee Retirement Income Security Act, better known as ERISA.

Bringing suit under ERISA is a new angle because it enables the plaintiffs to put the issue of money motives directly on the table. Money issues aren't clearly covered in the age discrimination act, but they are in ERISA.

''IBM terminated plaintiffs in violation of ERISA in order to avoid its increasing pension cost obligations to employees with greater years of service,'' the complaint claims. It also says IBM avoided general vesting of pension benefits, the increasing cost of health benefits and retiree or dependent health benefits.

The suit makes a direct case on the age issue, claiming the layoffs had ''disparate impact'' on older workers. ''The IBM terminations which took place in 2001-April 2003 were the result of a pattern and practice of systematically terminating employees age 40 and over due to their age,'' the suit claims.

On age claims, the plaintiffs are trying two approaches, what the legal literature calls ''disparate impact'' as well as ''disparate treatment.''

Disparate impact was defined by a federal court in 1993 as ''employment practices that are facially neutral in their treatment of different groups, but that in fact fall more harshly on one group than another and cannot be justified by a business necessity.''

Disparate treatment involves deliberately treating an employee differently based upon age, which legal experts say is tough to prove.

Some courts allow claims

A disparate impact tack makes it easier for a plaintiff to get to first base, after which the company has to prove it had good reasons to explain results like the ones Rivera found. But not all federal court circuits allow such claims. The Ninth Circuit, which includes California, does, according to various legal references.

Jeff Young, attorney with the McTeague, Higbee firm, said the data and graphs do show bias.

''You would, in a totally random situation, expect it to be a sort of flat line across the graph, which basically would say the same percentage of each group was let go,'' he said, ''and that was clearly not what happened here from what we can discern.''

But to press any of these claims, the plaintiffs' lawyers will first have to knock down the ''General Release and Covenant not to Sue'' that IBM required all employees being laid off to sign in order to collect severance payments that were as high as half a year's pay.

That, Young said, is doable.

''A lot of people are under the misimpression that because they signed a release and covenant not to sue, to get severance pay, that they are prohibited now from suing IBM for age discrimination,'' Young said. ''It's our position that the release that they signed was not valid, that it doesn't comply with the provisions of the Older Workers Benefits Protection Act.''

Young said many ex-IBMers are also under the impression that they lost their right to sue because they didn't complain to the federal Equal Employment Opportunity Commission. But he holds that a rule applies here that does make them eligible.

Those who did complain to EEOC and received a letter saying they had a right to sue must do so within 90 days of that letter, Young said.

The EEOC told complainants that they had signed the release and that it met the requirements of law. The agency therefore did not go to the next step of investigating the actual merits of the employees' claims.

In another age case, a court in Kentucky denied IBM's motion to dismiss the case on grounds that the plaintiff signed the release. The court held that there was at least a factual issue there to weigh, Young said, adding it was not necessarily a binding precedent.

Young said no quick solution is likely. ''I expect that this case is likely to go on for a number of years,'' he said.

AT A GLANCE
INFORMATION ON LAWSUIT

- Lawyers for plaintiffs or potential ones will meet interested ex-IBMers on Dec. 7, from 10 a.m. to noon at the Best Western Inn & Conference Center on Route 9 in the Town of Poughkeepsie. Additional people may join the suit, but eligibility is decided by the attorneys on a case-by-case basis as situations differ.

- Formal service of the complaint will be made upon IBM, which will reply.

- The first issue to be decided is whether the ''release and covenant not to sue" holds up, as IBM believes, or can be struck down, as the plaintiffs believe.

- If the release is ruled faulty, a long process follows of gathering evidence on the underlying issues of whether IBM violated any of three laws in its layoff practices or not. Motions would be made and if the case survives past that point, a trial date would be set in U.S. District Court.

- Attorneys say the entire process will likely take several years.

- Contact attorney Jeff Young at McTeague, Higbee in Topsham, Maine, at jyoung@me-law.com

Back to index