Ex-IBM staff ask US Supremes for help in bringing age-discrimination battle to court

Clock is ticking, in more ways than one

Twenty-nine former IBM employees who were denied the opportunity to sue the IT giant for age discrimination by arbitration agreements have petitioned the US Supreme Court to let them bring their claims to court.

Their petition [PDF], filed by attorney Shannon Liss-Riordan, a partner at Boston-based law firm Lichten & Liss-Riordan, seeks to resolve a split in the way that the Second and Sixth Circuit Courts of Appeals have interpreted the law.

It asks the Supreme Court to "to correct the Second Circuit’s erroneous conclusion that an arbitration agreement can take away a right to pursue an age discrimination claim that could have been pursued in court," which is key to the ongoing legal balance.

"This case raises an extremely important issue that we fervently hope the Supreme Court will take up," said Shannon Liss-Riordan told The Register. "For years, employers have exploited the use of arbitration agreements to undermine employees' rights and shield themselves from liability due to their systemic legal violations.

"This case demonstrates how an employer can even use an arbitration agreement to block employees from pursuing valid claims, even where those employees are willing to pursue their claims individually through the arbitration process."

Liss-Riordan said that the Second Circuit upheld a rule that disallowed age discrimination claims in arbitration beyond a 300-day window, even though such claims could be filed years later based on legal precedent.

"This decision goes against the foundational Gilmer decision, which says that arbitration can be a viable alternaitive to court litigation, if litigants can pursue the same claims in arbitration that they could pursue in court," she explained. "The decision also creates a split with the Sixth Circuit, which held that statute of limitations issues are substantive rights, not procedural rights that can be waived."

Petitions to the US Supreme Court face very long odds: only a small percentage of the petitions get granted each year.

Nevertheless, IBM has become a magnet for age discrimination claims since ProPublica reported in 2018 that the company under former CEO Ginny Rometty implemented a plan to shed older workers.

The EEOC, which investigated IBM for the age discrimination complaints filed by 58 workers at the time, dismissed Big Blue's counter-arguments in an August 31, 2020 finding that said [PDF] "there is reasonable cause to believe that [IBM] has discriminated against [employees] on the basis of age."

Two years later, in response to the publication of internal company communication disparaging older workers as "dinobabies," IBM chief global HR officer Nickel LaMoreaux insisted that age has never played a role in layoff decisions. Nonetheless, IBM has settled many such complaints for undisclosed amounts and has also succeeded in getting many claims tossed.

When the petitioners lost their jobs at IBM, they were offered and signed agreements that provided severance payments but also released IBM from most legal claims.

The agreements did make an exception: Former employees were allowed to pursue claims based on the Age Discrimination in Employment Act (ADEA). However, they had to do so individually, via arbitration rather than the court system.

When these ex-employees tried to exercise that right, they ran into a problem: The clock had run out.

"Although Petitioners would have been timely to pursue their claims in court, they were unable to do so in arbitration due to the timing provision in IBM’s arbitration agreement," the petition to the Supreme Court says. "Petitioners thus sought below declarations that this provision is unenforceable."

And hundreds of other former IBM employees, the petition says, have been similarly prevented from making claims.

Under the ADEA, employees have 300 days, or 180 days in some states and territories, to file a discrimination claim. But the courts also allow employees to "piggyback" on much older claims that have been properly filed with the US Equal Employment Opportunity Commission (EEOC).

The reason for this, the petition explains, is that employees may not find out that they have a valid discrimination claim at the time their employment was terminated. And the piggybacking rule has practical value to the court system by discouraging premature claims: Were piggybacking not allowed, potential litigants would be incentivized to file immediately upon termination, before it might be clear that they had a valid basis for their claim. And the court system would have to sort that out.

IBM's arbitration agreement does not allow the piggybacking rule, and thus it denies employees a right available through the court system. As cited in the legal filing, IBM's arbitration agreement says claims must be submitted within the deadline established by law. And it includes a phrase that disallows the deadline flexibility entailed by the piggybacking rule:

The filing of a charge or complaint with a government agency or the presentation of a concern though the IBM Open Door Program shall not substitute for or extend the time for submitting a demand for arbitration.

The impact of that bit of contractual language proved to be severe when 27 of the petitioners tried to bring age discrimination claims against IBM in arbitration.

"In each case, the arbitrator dismissed their claims under the above-quoted 'timeliness provision' of IBM’s arbitration agreement 180 or 300 days of their layoff," the petition explains.

IBM did not immediately respond to a request for comment. ®

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