IBM and an age-old issue - legal action that might set a precedent across the tech sector, one way or another

Landmark age discrimination lawsuits against IBM, which hit the headlines last week following a series of eye-popping allegations, could provoke a rash of similar claims against other tech industry players should the court find against it. 

'Big Blue' has faced a number of such lawsuits over recent years, but the pressure ticked up last week when widow Denise Lohnn sued on behalf of her late husband Jorgen. He killed himself at the age of 57 after being fired from the firm in 2016. Documents unsealed on Friday 11 February alleged that he:

Fell victim to a years-long companywide discriminatory scheme implemented by IBM’s top management to build a younger workforce, by reducing its population of older workers in order to make room for the hiring of younger workers.

The suit also claims that the vendor’s executives referred to older personnel disparagingly as “dino-babies” and joked about making them into an “extinct species” to be replaced by more youthful “digital natives”.

A similar class-action discrimination suit was filed in the US District Court for the Southern District of New York by attorney Shannon Liss-Riordan last July. She is representing hundreds of former IBM staffers and alleges that “age animus from IBM’s highest ranks” meant that various unnamed executives were aware of a “companywide plan to oust older employees in order to make room for younger employees” between 2013 and 2018.

A key concern in this context, according to an email from a top executive cited in court documents, was that “our millennial population trails competitors”

A wake-up call for the industry

But in an open letter sent to all of IBM’s employees on Sunday 13 February this year, the company’s Chief Human Resources Office Nickle LaMoreaux attested that:

Discrimination of any kind is entirely against our culture and who we are at IBM, and there was (and is) no systemic age discrimination at our company. As someone who started at IBM as an intern and spent my entire career at this great company, I also want to emphasize that disrespectful language is not who we are. It in no way reflects IBM’s practices and policies. The facts are clear: between 2010 and 2020, IBM exited whole lines of business and reinvented itself for an entirely new era of technology and the skills it requires. Amidst those significant changes, IBM never engaged in systematic age discrimination.

In fact, she says, between 2010 and 2020, 37% of all US hires at the vendor were over the age of 40. By the end of 2020, 26% of its total US labour force had been with the company for 20 years or more and the median age was 48, the same as it had been in 2010 and six years higher than the national average.

But HR guru Josh Bersin, who is founder and CEO of The Josh Bersin Academy, believes that IBM’s case “should really be a wake-up call for everybody in this industry”. He points out that the claims against the supplier are “not unique” in that:

There are probably a lot of companies quietly creating early retirement programs, and incentivizing older people to leave in order to reduce overhead because they want to get rid of this higher cost labour pool.

But depending on the outcome of the suit, there could be major repercussions, serving to push the all too frequently neglected age discrimination issue significantly higher up the tech industry agenda than it is today. Bersin argues:

I don’t think the business community is paying as much attention to it as the press is right now, but I’m sure lawyers in Fortune 500 companies and employment lawyers are reading the suit and watching the fallout. Because if this case is deemed to be correct and there’s a big judgment against IBM as an employer, there will be other suits like it against other companies, and it’s going to make companies very sensitive to this issue.

An employment branding and recruiting strategy issue

Ironically though, says Helen May, founder of diversity and inclusion consultancy [email protected] and author of ‘Everyone Included’,  such allegations, whether proven or not, could be damaging to IBM’s “employer brand”, potentially putting off the young people it apparently craves from working for it in the process.

As a result, her recommendation for the vendor, and others in a similar situation, would be to explore what skills they are likely to require in future and train existing workers accordingly – no matter what their age - while at the same time evolving their organisational structure to ensure it mirrors commercial imperatives. She explains:

This situation would imply that IBM isn’t investing enough in its people, which is a big thing for young workers. So it needs to make a demonstrable investment in its people and career paths and structures, which includes retaining and upskilling older people and investing in all areas of diversity.

Bersin likewise suspects that Big Blue may be having problems attracting younger workers into its fold:

The fact that the average age at IBM is 48 is kind of odd. Either IBM is not attracting a lot of young people, or the company is getting older. It strikes me as a bit unlikely though because it just bought Red Hat and they're in some pretty dynamic markets. So the problem may be the talent pipeline.

Put another way, he says:

I think it’s an employment branding and recruiting strategy problem, not an aging workforce problem, and that’s what HR is there to fix. Plus, people at the higher end of the workforce eventually retire anyway. So IBM needs to do a much better job of explaining to young people why they should have a career at IBM, and why IBM will be a great place for them to work for the first 10 or 15 years of their career.

Tackling ageism

Inter-generational diversity and inclusion expert Henry-Rose Lee points out, however, that tech companies tend to consistently “overlook” ageism as an issue, preferring instead to focus on gender, ethnicity and sometimes disability. She explains:

Age diversity brings benefits [in terms of innovation, decision-making and team dynamics], but it’s just not in the psyche of so many organisations. In fact, I’ve had clients who actively get their employees to sign contacts where they promise to leave the organization by 60 years old!

In other words, Lee says, “ageism is alive and well in so many industrialized countries and so many organizations”, which means that many over 55s simply choose to retire, “even though they’re badly needed”. But as skills shortages and the 'Great Resignation' continue to bite, she believes tech employers will have no choice but to start proactively grasping the nettle.

To this end, Lee suggests eight steps that could help to create a more balanced and less discriminatory working environment:

1. Encourage workers over 50 not to retire. If they are suffering from work-related stress or are keen to slow down, encourage them to become associates, consultants or trouble-shooters, who work part time or on key projects;
2. Include age demographics when measuring your diversity and inclusion performance, add targets, and then check progress. What gets measured gets done;
3. Support older workers in continuing their technical and professional education, which may help them feel more valued and valuable, thus aiding retention;
4. Ask older workers to become mentors, coaches and even trainers to younger workers to boost their skills, understanding and knowledge of traditional approaches and technology such as mainframes;
5. Train staff of all ages about ageism as an unconscious bias as it impacts the oldest and youngest workers most. Training promotes greater insight and awareness, enables people to think differently and make informed decisions;
6. Encourage younger workers to become reverse mentors for older workers to help them understand their world and feel less vulnerable or worried about it. Reverse mentoring also builds confidence and skills in younger employees, so everybody wins.
7. Set up project teams of mixed ages, so that older and younger generations can learn from each other’s expertise and experience. Both will bring something to the table.
8. Set up co-leads on high-profile, essential projects, one who is older and the other younger to again promote understanding between different age groups.

My take

As this is a legal action currently underway, comment on the details of the IBM situation would be inappropriate. That said, age discrimination has been consistently ignored as an issue in the tech industry for years. But legal action tends to focus minds. We’ll watch the outcome of the IBM suit - one way or another - with interest – as should the rest of the sector.