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After a lengthy investigation, the U.S. Equal Employment Opportunity Commission (EEOC) has found that IBM engaged in systematic age discrimination by directing managers to replace older employees with younger workers. The EEOC finding, contained in a determination letter sent to a group of ex-employees who filed complaints, could open the door to federal and private discrimination lawsuits and millions of dollars in settlements for the tech giant.
The Backdrop
Between 2013 and 2018, IBM embarked on an aggressive campaign to restructure its operations by laying off thousands of employees, including workers at its facility in Hopewell Junction, New York. In May 2018, the EEOC’s district office began consolidating complaints from former IBM employees across the country.
The agency’s investigation included interviews with dozens of witnesses and an analysis of the company’s employment data for 2013 through 2018. That analysis found more than 85 percent of employees targeted for layoff were older workers. IBM terminated more than 20,000 U.S. employees ages 40 and over during this time period.
The EEOC also uncovered evidence of “older employees who were laid off and told that their skills were out of date, only to be brought back as contract workers, at a lower rate of pay, with fewer benefits.”
The EEOC’s determination letter says a nationwide investigation “uncovered top-down messaging from IBM’s highest ranks directing managers to engage in an aggressive approach to significantly reduce the headcount of older workers to make room for early professional hires.”
IBM denied that it had discriminated against older employees. The company said in a statement, “IBM makes decisions based on the needs of its business units, not age, and we will continue to defend this matter vigorously.
The determination letter reads that the decision is final, however, and since “there is reason to believe that violations have occurred, the EEOC expects IBM and the charging parties will enter into conciliation.”
Conciliation is the process in which an employer and the EEOC negotiate an agreement on the damages to be awarded after the agency has determined that federal employment laws have been violated. Conciliation is a voluntary process, however, and the employer can decide to litigate.
The Takeaway
At this juncture, it is unclear whether IBM will reach an agreement with the EEOC. If an agreement is not reached, the EEOC can issue a right to sue letter to the charging parties. It is also uncertain whether the IBM decision indicates the EEOC will be stepping up enforcement of the federal Age Discrimination in Employment Act (ADEA). In the meantime, if you believe you have been subjected to ageism in the workplace, talk to an experienced age discrimination attorney.