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Apple exec sues over 'ageist' removal of $800k stock bonus

IP director claims he was skipped over for merit-based retention bonus because of the retention part

A 67-year-old director in Apple's Intellectual Property Enforcement unit is suing the company for age discrimination, alleging Apple unfairly took away a special bonus it uses to "retain key employees" in lead positions because of his age.

Donald K Shruhan's legal team, citing the infamous internal IBM comms disparaging employees as "Dinobabies" and calling for their extinction, claims [PDF] Shruhan was a victim of "deeply rooted Silicon Valley ageism" when his manager told him he would no longer receive restricted stock units (RSUs) in 2019.

The complaint cites consistent positive work reviews, and claims Shruhan "personally developed best-in-class programs in Global Security and IP enforcement" and that his immediate supervisor told him he had "saved Apple hundreds of millions of dollars" adding that he'd been given merit increases and RSUs along with his work reviews in every year except 2019.

It goes on to allege:

On September 26, 2019, [Tom] Moyer [Shruhan's supervisor] gave Plaintiff one of his many excellent reviews. However, by the end of the review he informed Plaintiff that the Company was not awarding him RSUs. Plaintiff is unaware of any other Senior Director who met or exceeded expectations but did not receive any RSUs. He was 64 years old at the time.

The two other senior directors in Plaintiff's organization, Legal Global Security, received RSUs commensurate with their performance. Each was significantly younger than Plaintiff.

In the two preceding fiscal years when Plaintiff received similar excellent reviews, he was granted RSUs valued at $850,000 and $800,000 respectively.

Shruhan, formerly a US Homeland Security investigator who also worked on the security team of Pfizer Inc, said he worked on mass production security leaks, fraud and major theft for Apple in the Asia Pacific (APAC) region.

After splitting his time as a senior director in the Global Security team and the Intellectual Property Enforcement (IPE) teams while in the APAC region, he planned to move to working exclusively for the IPE team from Arizona in the US in 2020, describing the IPE supervisor as being "thrilled" he would consider taking the new role.

The complaint goes on to claim that when Shruhan queried the RSUs issue with human resources, the Apple exec's supervisor confirmed that he hadn't awarded Shruhan any stock because the awards are "designed as an investment in the future and a retention hook." The security pro claimed the same supervisor implied that he "no longer saw him as part of Apple's future, and no longer saw the need to incentivize Plaintiff's continued employment with Apple because he was nearing retirement age."

According to the suit, he then went to Apple's legal department, who told him to try to work it out with HR. Shruhan alleges human resources staffers later told him the stock was withheld because of a "clawback" policy which meant he was not entitled to any stock. The IP director claimed that when asked for the written policy, HR couldn't produce anything.

The Apple exec filed an Employee Relations complaint alleging age discrimination in October 2021 about the lack of 2019 RSUs and merit increase, saying "it was the first time in 11 years that his stock award was not commensurate with his professional achievement."

The complaint adds that "after another excellent performance review in FY 2021," Shruhan was told "his RSU award would again be diminished."

It also alleges that in September 2021, Shruhan was allegedly "asked to submit an email indicating his plan for retirement" despite "never having notified Apple of his intention to retire." Then, claims the exec, in a February 2022 call with Apple's Employee Relations team, he was allegedly told that he was not awarded any RSUs in 2019 because his supervisor "thought he was retiring."

After what the suit describes as failed mediation effort with Apple counsel earlier this month, Shruhan filed the complaint last week in the Santa Clara County Superior Court.

It was removed to the US District Court for the Northern District of California at the request of Apple on Tuesday this week [PDF].

The suit charges Apple with age discrimination, failure to prevent discrimination, and violation of the Unfair Business Practices act.

The director wants damages for the RSUs he believes he should have received in 2019 – with a value at the time of between $800,000 and $850,000. He's also looking for punitive damages, emotional distress damages for "humiliation and embarrassment", as well as attorneys' fees and other damages and costs.

We've asked Apple for comment. ®

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