IBM settles age discrimination case that sought top execs' emails

Just days after being ordered to provide messages, Big Blue opts out of public trial

Less than a week after IBM was ordered in an age discrimination lawsuit to produce internal emails in which its former CEO and former SVP of human resources discuss reducing the number of older workers, the IT giant chose to settle the case for an undisclosed sum rather than proceed to trial next month.

The order, issued on June 9, in Schenfeld v. IBM, describes Exhibit 10, which "contains emails that discuss the effort taken by IBM to increase the number of 'millennial' employees."

Plaintiff Eugene Schenfeld, who worked as an IBM research scientist when current CEO Arvind Krishna ran IBM's research group, sued IBM for age discrimination in November, 2018. His claim is one of many that followed a March 2018 report by ProPublica and Mother Jones about a concerted effort to de-age IBM and a 2020 finding by the US Equal Employment Opportunity Commission (EEOC) that IBM executives had directed managers to get rid of older workers to make room for younger ones.

"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," said New Jersey Superior Court Judge Alberto Rivas in his order.

On June 14 the judge dismissed the case because IBM agreed to settle. That will prevent the messages in which former CEO Ginny Rometty and former HR SVP Diane Gherson are said to discuss what the judge described as "the push to increase the number of millennial employees and decrease the number of older employees" from being made public.

IBM did not immediately respond to a request to comment on the settlement.

When we asked IBM to comment on the case earlier this month, an IBM spokesperson repeated past claims that the plaintiff in the case, Eugene Schenfeld, was dismissed lawfully.

"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."

IBM's spokesperson pointed to a February post by IBM Chief Human Resources Officer Nickle LaMoreaux insisting there has never been "systematic age discrimination" at IBM and presenting ostensibly exculpatory data covering a period from 2010 to 2020 – which isn't the period cited in any of the age discrimination lawsuits The Register has seen.

The Register asked IBM's spokesperson "is IBM willing to share the ages and number of those laid off in the United States between 2014 and 2020. And the ages and number of those hired?"

We were told, "We don't have anything to add to the data points from Nickle's February message."

A similar age discrimination claim filed in 2018 by former IBM Bluemix global program director Jonathan Langley was settled in 2020 for an undisclosed sum. In that case, the settlement also followed a judge's order to turn over Ginny Rometty's emails.

Around 2014, according to ProPublica, IBM stopped providing age data to laid off employees as it had done previously and began requiring employees, in order to receive severance pay, to pursue age discrimination claims through private arbitration, where corporate litigants prevail more often than they do in federal or state court.

The cost of silence

The amount Schenfeld will receive has not been made public and settlements typically include non-disclosure requirements. However, the amount is likely to be several million dollars, based on the compensation sought in ongoing IBM age discrimination claim involving eight different plaintiffs in Texas, Kinney et al. vs. IBM.

In that case, the requested compensation – which IBM is currently arguing has been incorrectly calculated – ranges from about $400,000 to $2,500,000 per plaintiff. These figures attempt to take into account a dismissed worker's work life expectancy, expected earnings over this period, actual earnings post-separation, fringe benefits, and damages, among other considerations.

Last week in the Kinney case, the plaintiffs' legal team filed a motion [PDF] opposing IBM's efforts to narrow the scope of depositions and evidence allowed at trial.

"IBM now seeks a Protective Order to shield the company from addressing four topics of inquiry that relate to IBM’s workforce 'transformation," the response motion says. "Specifically, IBM seeks to shield its Corporate Representative from testifying about changes to its workforce that IBM executives publicly touted and are at the heart of Plaintiffs’ age discrimination case."

The motion references 31 exhibits that have been filed under seal. One such document described in the filing is a report to IBM's Board of Directors: "IBM executives prepared presentations for IBM's Board of Directors which explicitly referenced the plan to 'rebalance' the age of IBM's workforce by 2020."

Another describes an edict by IBM's chief human resources officer to immunize so-called Early Professional hires from Resource Action layoffs.

The Kinney case is scheduled to go to trial on Monday, January 23, 2023. But if the evidence described in court documents can be presented at trial, the outcomes of the Schenfeld and Langley cases suggest IBM will settle before then and will continue to maintain it has acted lawfully. ®

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