A new report from ProPublica and Mother Jones alleges that over the past five years, IBM laid off thousands of its workers older than age 40 in the United States, in an apparent attempt to shift its workforce in a younger direction. ProPublica estimates the number of employees who were let go at around 20,000, but believes the actual number is “almost certainly higher.”
The report is based on information gathered from more than 1,000 former IBM employees through interviews and questionnaires, as well as public records, legal filings, and internal company documents.
At its height in the 1980s, IBM once employed nearly 250,000 people in the U.S. It was known as a company that kept its workers on for decades. These are exactly the type of workers they moved to replace, according to confidential planning documents obtained by the ProPublica report.
Of the total number of jobs IBM cut over the past five years, about 60 percent were workers aged 40 and over. They were replaced with new hires who were younger, less experienced, and lower paid. Many positions were also moved overseas.
IBM decided to shift the focus of their business to cloud services and data analytics. According to a presentation made to IBM executives, millennials were needed to help the company make the change.
Forced Arbitration and Retirements
The report alleges that not only did IBM flout U.S. age discrimination laws and regulations, it required employees seeking severance and early retirement packages to sign arbitration agreements. Such agreements mean the employee gives up the right to seek legal remedy in civil court and may not join with others who do so. In arbitration, decisions are final and remain private, as opposed to a court ruling, which becomes a matter of public record.
According to ProPublica, IBM also pushed older employees to retire, resign, or face being fired. This was a strategic move that cut employment numbers, while reducing the number of employees that could be counted as layoffs. High numbers of layoffs are required to be publicly disclosed, something that was not in IBM’s interest.
Employees who lost their positions were told they could apply for other positions within the company. However, internally, managers were told not to rehire these employees. Other laid off workers were told their skills were out of date, but they were brought back on a contract basis to do the same work at lower pay and reduced benefits. As is often the case with older workers who lose their jobs, finding suitable new jobs has been difficult for the former IBM employees.
Cherry Hill Employment Discrimination Lawyers at McOmber McOmber & Luber, P.C. Fight for Victims of Age Discrimination
Age discrimination in the workplace is prohibited by federal and state law. At McOmber McOmber & Luber, P.C.. P.C. we help victims of age discrimination get justice and compensation. To speak to a dedicated Cherry Hill employment discrimination lawyer, call our Red Bank office at 732-842-6500, our Marlton office at 856-985-9800, our Newark office at 973-878-9040, or contact us at 888-396-0736 or online. We represent clients throughout New Jersey.