IBM ordered to hand over ex-CEO emails plotting cuts in older workers

Infamous 'Dinobabies' memo comes back to haunt Big Blue again

Updated In one of the many ongoing age discrimination lawsuits against IBM, Big Blue has been ordered to produce internal emails in which former CEO Ginny Rometty and former SVP of Human Resources Diane Gherson discuss efforts to get rid of older employees.

IBM as recently as February denied any "systemic age discrimination" ever occurred at the mainframe giant, despite the August 31, 2020 finding by the US Equal Employment Opportunity Commission (EEOC) that "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."

The court's description of these emails between executives further contradicts IBM's assertions and supports claims of age discrimination raised by a 2018 report from ProPublica and Mother Jones, by other sources prior to that, and by numerous lawsuits.

On Friday, New Jersey Superior Court Judge Alberto Rivas granted the plaintiff's motion for discovery in Schenfeld v. IBM, an age discrimination claim filed in late 2018.

The judge's order [PDF] covers Exhibit 10, which "contains emails that discuss the effort taken by IBM to increase the number of 'millennial' employees."

"An email dated June 10, 2016 was sent by [former] IBM employee Erich Clementi, SVP of sales and distribution, Chairman Europe, which contained the term 'dinobabies' that was used to describe older IBM employees," the order says, referencing the ageist pejorative that surfaced without attribution in February as part of another age discrimination case, Lohnn v. IBM.

"Furthermore, the push to increase the number of millennial employees and decrease the number of older employees was the subject of several emails involving Ginny Rometty, the predecessor Chief Executive Officer of IBM, and Diane Gherson, who was SVP for Human Resources."

The judge's order continues, "The emails contained within Exhibit 10 evidence an interest at the then CEO-level to change the profile of IBM employees so that it reflected a younger workforce. The core issue presented in this case is whether Plaintiff [Eugen Schenfeld] was illegally separated from IBM due to his age. Therefore, the relevancy of these emails to this litigation is pronounced."

The emails were sent during the April 24, 2016 and July 30, 2017 time frame, some of which included John Kelly, SVP and Director of IBM Research, who is among the defendants in the lawsuit. The plaintiff, IBM research scientist Eugen Schenfeld, alleges that he was ousted in 2018 as part of "Project Concord," one of many IBM workforce reductions, which Big Blue refers to as "Resource Actions."

In a different age discrimination claim, Kinney et al. v. IBM, the plaintiffs' recent discovery request reveals just how many "Resource Actions" IBM has implemented from 2014 through 2020. At least 71 of them have been identified in a recent court filing [PDF].

The codenames for these layoffs are listed as follows:

Solitaire, Canasta, Keno, Baccarat, Saturn, Concord, River, Ruby, Acorn, Orange, Starburst, Apollo, Chrome, Juno, Occam, Oaktree, AIG 2, Draco, Cygnus, Capital One, Yellow Jacket, NAPA, Windsor, Newton, Evolution, Ocean View, Orthos, Omega, BIE, Centricity, Rheingold, Kindle, Ventus, Fernando, Toffee, Starfish, Zen, Moonlight, Superdome, Zeus, Union, Indigo, Sapphire, Wotsit, Falcon, Osprey, Picasso EY, Cenetaur, Bibliotheca, Melba, Tower, Mercurio, Miller, Norwegian, Wood, Magic, Tignanello, Amarone, Jazztel, Top, Iron Man, Tuareg, Sonia, Horizon3, Horizon Reloaded, Pathfinder, DCM, Avanza, Teide, Aquila, and Canon.

Rometty stepped down as CEO on January 1, 2021 and was replaced by Arvind Krishna. She was then hired as consultant at IBM, at a rate of $20,000 per day if she provides four or more hours of services, or $10,000 otherwise.

IBM shareholders appear to have become unhappy with the way the company has been dealing with allegations of past misconduct.

Two-thirds of IBM shareholders voting on proposals at the company's annual meeting in April supported a measure to require the company to produce a public report on the financial risks arising from its use of concealment clauses that limit what workers can say about workplace misconduct.

That same month, a group of IBM investors sued IBM for securities fraud, alleging that the company misreported mainframe sales to inflate executive bonuses. That complaint led to four similar lawsuits filed by firms representing other investors.

IBM did not immediately respond to a request for comment.

The trial date for the Schenfeld case is scheduled next month. ®

Updated to add

After this story was published, an IBM spokesperson got back to us and reiterated past statements about the lack of age discrimination at the company.

"The facts of the matter have not changed: there was and is no systemic age discrimination at IBM and the data back that up," IBM's spokesperson said. "Further, with regards to the Schenfeld case, age played no role whatsoever in this individual's departure."

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