This is the promised second part of my attempt to decide if IBM’s recent large U.S. layoff involves age discrimination in violation of federal laws. More than a week into this process I still can’t say for sure whether Big Blue is guilty or not, primarily due to the company’s secrecy. But that very secrecy should give us all pause because IBM certainly appears to be flouting or in outright violation of several federal reporting requirements.
I will now explain this in numbing detail.
Regular readers will remember that last week I suggested laid-off IBMers go to their managers or HR and ask for statistical information they are allowed to gather under two federal laws — the Age Discrimination in Employment Act of 1967 and the Older Worker Benefit Protection Act of 1990. These links are to the most recent versions of both laws and are well worth reading. I’m trying to include as much supporting material as possible in this column both as a resource for those affected workers and to help anyone who wants to challenge my conclusions. And for exactly that reason I may as well also give you the entire 34-page separation document given last month to thousands of IBMers. It, too, makes for interesting reading.
For companies that aren’t IBM, reporting compliance with these laws is generally handled following something very much like these guidelines from Troutman Sanders, a big law firm from Atlanta. What Troutman Sanders (and the underlying laws) says to do that IBM seems to have not done comes down to informing the affected workers over age 40 of the very information I suggested last week that IBMers request (number of workers affected, their ages, titles, and geographic distribution) plus these older workers have to be encouraged to consult an attorney and they must be told in writing that they have seven days after signing the separation agreement to change their minds. I couldn’t find any of this in the 34-page document linked in the paragraph, above.
Here’s what readers who are subject to this layoff report happened when they went to their managers or HR asking for the required information. They were either told that IBM no longer gives out that information as part of laying-off workers or they were told nothing at all. HR tends, according to my readers from IBM, not to even respond.
It looks like they are breaking the law, doesn’t it? Apparently that’s not the way IBM sees it. And they’d argue that’s not the way the courts see it, either. IBM is able to do this because of GILMER v. INTERSTATE/JOHNSON LANE CORP. This 1991 federal case held that age discrimination claims can be handled through compulsory arbitration if both parties have so agreed. Compulsory arbitration of claims is part of the IBM separation package. This has so far allowed Big Blue to avoid most of the reporting requirements I’ve mentioned because arbitration is viewed as a comparable but parallel process with its own rules. And under those rules IBM has in the past said it will (if it must) divulge some of the required information, but only to the arbitrator.
I’m far from the first to notice this change, by the way. It is also covered here.
So nobody outside IBM top management really knows how big this layoff is. And nobody can say whether or not age discrimination has been involved. But as I wrote last week all the IBMers who have reported to me so far about their layoff situation are over 55, which seems fishy.
IBM has one of the largest legal departments of any U.S. company, they have another army of private lawyers available on command, they’ve carefully limited access to any useful information about the layoff and will no doubt fight to the finish to keep that secret, so who is going to spend the time and money to prove IBM is breaking the law? Nobody. As it stands they will get away with, well, something — a something that I suspect is blatant age discrimination.
The issue here in my view is less the precedent set by Gilmer, above, than the simple fact that IBM hasn’t been called on its behavior. They have so far gotten away with it. They are flouting the law saying arbitration is a completely satisfactory alternative to a public court. Except it isn’t because arbitration isn’t public. It denies the public’s right to know about illegal behavior and denies the IBM workforce knowledge necessary to their being treated fairly under the law. Arbitration decisions also don’t set legal precedents so in every case IBM starts with the same un-level playing field.
So of course I have a plan.
IBM’s decision to use this particular technique for dealing with potential age discrimination claims isn’t without peril for the company. They are using binding arbitration less as a settlement technique than as a way to avoid disclosing information. But by doing so they necessarily bind themselves to keeping age discrimination outside the blanket release employees are required to sign PLUS they have to work within the EEOC system. It’s in that system where opportunity lies.
Two things about IBM’s legal position in this particular area: 1) they arrogantly believe they are hidden from view which probably means their age discrimination has been blatant. Why go to all this trouble and not take it all the way? And 2) They are probably fixated on avoiding employee lawsuits and think that by forestalling those they will have neutralized both affected employees and the EEOC. But that’s not really the case.
If you want to file a lawsuit under EEOC rules the first thing you do is charge your employer. This is an administrative procedure: you file a charge. The charge sets in motion an EEOC investigation, puts the employer on notice that something is coming, and should normally result in the employee being given permission by the EEOC to file a lawsuit. You can’t file a federal age discrimination lawsuit without EEOC permission. IBM is making its employees accept binding arbitration in lieu of lawsuits, so this makes them think they are exempt from this part, BUT THERE IS NOTHING HERE THAT WOULD KEEP AN AFFECTED EMPLOYEE FROM CHARGING IBM. Employees aren’t bound against doing it because age discrimination is deliberately outside the terms of the blanket release.
I recommend that every RA’d IBMer over the age of 40 charge the company with age discrimination at the EEOC. You can learn how to do it here. The grounds are simple: IBM’s secrecy makes charging the company the only way to find out anything. “Their secrecy makes me suspect age discrimination” is enough to justify a successful charge.
What are they going to do, fire you?
IBM will argue that charges aren’t warranted because they normally lead to lawsuits and since lawsuits are precluded here by arbitration there is no point in charging. Except that’s not true. For one thing, charging only gives employees the option to sue. Charging is also the best way for an individual to get the EEOC motivated because every charge creates a paper trail and by law must be answered. You could write a letter to the EEOC and it might go nowhere but if you charge IBM it has to go somewhere. It’s not only not prohibited by the IBM separation agreement, it is specifically allowed by the agreement (page 29). And even if the EEOC ultimately says you can’t sue, a high volume of age discrimination charges will get their attention and create political pressure to investigate.
Charging IBM can be done anonymously. And charges can be filed for third parties, so if you think someone else is a victim of age discrimination you can charge IBM on their behalf. This suggests that 100 percent participation is possible.
What will happen if in the next month IBM gets hit with 10,000 age discrimination charges? IBMers are angry.
Given IBM’s glorious past it can be hard to understand how the company could have stooped so low. But this has been coming for a long time. They’ve been bending the rules for over a decade. Remember I started covering this story in 2007. IBM seems to feel entitled. The rules don’t apply to them. THEY make the rules.
Alas, breaking rules and giving people terrible severance packages is probably seen by IBM’s top management as a business necessity. The company’s business forecast for the next several quarters is that bad. What IBM has failed to understand is it was cheating and bending rules that got them into this situation in the first place.
http://grammarist.com/usage/flaunt-flout/
Unless Bob was using “flaunt” before and then corrected it, the word “flout” as it appears in the column is the correct usage.
The email version of the column used “flaunt”, erroneously, throughout. Fortunately for credibility, the mistake seems to have been fixed.
Thanks for the link. I learned something about flouting the law, now I can flaunt my knowledge.
of course they are guilty. But then again all companies do this. My company is merging with a technology and data provider and the more seasoned workers are paid more than the relatively inexperienced staff. Guess who are getting cut?
In all of this RA, IBM is taking careful aim and then shooting itself in the foot. The older worker bees are IBM’s institutional memory *and* some of its most talented, capable and competent people…1) which is self-evident because they’ve lasted this long 2) and less obviously, they are the people who know IBM’s core businesses and competencies inside out…Which, of course, means that all of them are being hauled up out of steerage and made to walk the plank in a long, long line. Because, of course, the old IBM passeth for the shiny new ‘with-it’ cutting edge IBM. Alas, the old IBM had steady money-makers and so much of the new IBM is still smoke and mirrors in areas where IBM is clueless and serious heavy weights are already well ahead of them.
As they say in the military, ‘Hope is not an action plan’. Nor is delusion. Fairy dust is being barged up the Hudson, then dumped-trucked to Armonk. Think lovely thoughts, then uppppppppp we go.
Is IBM guilty of age discrimination? Probably. Will anything be done about it? Probably not. At this point, IBM really is the dying company that has been described in previous blog posts. I’m sad to make that observation as a former employee, but facts must be faced. IBM is like a dying restaurant that the owners are desperate to fix. They have tried fiddling with the staff (endless firing and replacement of workers), fiddling with the menu (all that BS about CAMSS) and fiddling with the presentation (ridiculous ads on TV and magazines, an upgraded building every so often, a new home page). Management is famous for dipping into the till and looting the firm every chance they get. The only thing that hasn’t been fiddled with is the executive management and BOD, who have proven to be ineffective, incompetent and probably immoral restaurateurs.
The end result? A company that is running out of marketable product, and more importantly running out of people who care. Aside from mainframe computers and the staff that can support them, what does IBM have to offer? Not even their staff really knows, as one can observe on their home page. IBM’s reputation in the industry has turned to s**t, helped along by previous employees. One can only do this for so long before people stop caring, and that’s where I think we are now. I have all the sympathy in the world for IBM’s staff — like the staff at any dying restaurant, they don’t deserve to be treated like this. But this situation has been going on for at least 20 years. The world is moving on (some say it HAS moved on) to other alternatives. Waiters, cooks and even chefs get screwed at restaurants all the time, and IBM is no different. That doesn’t make it right, but there isn’t much to be done about it except to walk away and find somewhere else to work. Lawyers may have a field day re: EEOC regulations and all, but for most individual employees it has simply become a bad scene to run away from.
Cringely stated that he started following IBM’s practice of RA’ing the over 40 crowd in 2007. Just want to let everyone know that IBM was doing that long before. My RA paperwork is dated 2002, and the IBM settlement check showed up summer of 2009, just a few months before they had to be in court in front of a judge. There was strong wording in the final settlement about IBM not admitting any guilt, but wanted to settle the matter and ‘put it behind them’. There was also strong wording that all we could say about the settlement was ‘The Issue has been resolved’.
A person would think that after nearly 2 decades of RA’ing the over 40 employees, IBM would have learned how to do it without getting caught.
It’s actions like this that will eventually lead to tech workers organizing. I think the biggest things that have held that back are diversity and tradition. The tech industry, at least from what I have witnessed and read, is quite diverse, and though we have all proved that this diversity doesn’t prevent us from working together effectively, the huge varieties of backgrounds and ingrained political/social views make formally organizing a challenge. Also, tech workers are looked at, and think of themselves, as ‘professionals’, and the perception of the ‘tradition’ in America is that professionals don’t organize…that’s what workers do. Perhaps another aspect is the ignorance and lack of interest in history, at least from a political and labor perspective (hey, we all love tech history, but how many techies are true students of any of the humanities?).
All this may change at some point, but for now I believe it would be hard for any movement to get traction as there is also a perception that there are tons of tech professionals waiting in the wings to grab jobs, so doing, or even just speaking out about, anything is perceived as quite risky. Where I work, folks grumble and gripe but do not actively DO (or even formally say) anything about what they perceive to be abusive management…then again, most of them now do their jobs to the bare minimum of requirements, so I guess their poor performance is their way of ‘making a statement’ about their feelings on the matter. Of course, that has led to a whole ‘the beatings will continue until morale improves’ atmosphere that helps perpetuate the whole thing.
Eventually, though, folks will start looking at organizing as a way to combat the poor management of the tech areas. It’s happened in a lot of each era’s top industries (manufacturing, auto, transport, etc.), so why not tech?
you might have heard of Alliance at IBM. they tried to organize. trouble is, so many got RIFfed they could go no further.
kind of like the Wal-Mart of tech… everything is done overseas by the cheapest source, and there is nobody competent left to work the registers.
Many techies also have a libertarian streak, identifying with the owners of business more than the workers.
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After all, unions exist to protect labor. Ambitious techies dream of replacing labor. Recently, I was reading in The Atlantic, Why New York Subway Lines Are Missing Countdown Clocks, (https://www.theatlantic.com/technology/archive/2015/11/why-dont-we-know-where-all-the-trains-are/415152/) and one major inefficiency is that they are running their modern computer-controlled system and their labor-intensive mechanical switch system on the same tracks at the same time.
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The Atlantic won’t say why they would do this, but I will: Because a government infrastructure job is a lifetime job. Not necessarily an easy job, and the workers feel like they contribute in an honest day’s work every day, but this is blatant union inefficiency.
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Unions can do useful work, but to my eyes, they have largely been another instrument of bloated power structures and confining centralization.
The institutions that techies hate the most are heavily union, regulated, and very labor intensive. Personally, I HATE to wait, and yet large government-like institutions (and I would put Verizon, AT&T, and IBM in that group), serve themselves, not the market, believing that they are important enough that everyone will wait on them. If you sign up for services on a Friday, you do not get service on Friday, you wait 1 month to have the kick-off meeting and another month to get it staffed. IBM has historically been about “innovation”, with the THINK logo and all. The employees were treated well until 1994, and they didn’t NEED a union. My belief in 2016 is that no public technology company, over the long term, can be innovative, and will not be good to it’s employees. The shareholders and executives demand too much of the revenue and profits of the company, and the company does not invest back into it’s software/hardware or it’s people at a high enough level to innovate. Yes, Apple has peaked. Yes, IBM has made more patents than any other company for many years. How many of those patents are actually useful in the marketplace, vs being “gee I got a patent”? Unions aren’t the answer. I think the answer is having a “free enough” market that smaller, more innovative companies will take enough market share that the “public” dinosaurs will starve to death, because they need huge revenues to “survive”. Already happening. IBM’s best option is to become a bunch of smaller “independent” companies themselves, maybe still overseen “just financially” by mother IBM, like Warren Buffet does with Berkshire Hathaway. Let each “independent” company decide their own best database to support (instead of demanding that they use DB2), let each company decide their own GUI, their own sales process, and don’t tell them that all their development must be “cloud” for the next two years. Let them use SalesForce (or something else), instead of a re-branded badly built CRM that doesn’t even come close to supporting the needs of salespeople. It’s a reporting tool for management. Smart software companies know how to build a product that both works on premise and in the cloud. And STAFF development so innovation can be built and completed, cut the management by getting rid of the dinosaur “regional” management structure back into a single national (or even worldwide) salesforce with each seller more focused on a customer/industry and each tech seller on a software product or technology. You need the industry knowledge to know what the “next thing” for banking, retail, logistics, government, healthcare is. Sales people need to know what customers are looking for in specific industries, who the competitors, what the competitors are selling, how their products are priced in the market place. They need to resources to “WIN DEALS”. Tech sellers need to know both the technologies being sold at a deep level, and also how to apply that technology to the problems that the business wants to solve. IBM has a LOT of technology, yet it fails to understand how many customers/industries work, and only does well really in just a few industries and ends up being the “rough plumbing” in most of traditional IT. Now that traditional IT is being taken apart for newer models, “rough plumbing” has become a commodity.
Great comments. My thought exactly.
Maybe, but the unions take money from every paycheck. Some of this money will go towards political action, and they can take extra payments at any time. This political action is to encourage people to vote for Democratic Party politicians. These Democratic Party politicians in the Obama Administration have just increased the number of H1B visas, propose more increases(shared by most of the Republicans), and also are giving out work permits to spouses of H1B visa holders, increasing the competition even more. Of course the unions are also supporting politicians who will provide amnesty for low skilled workers, lowering wages there, but presumably the IBM employees won’t care about that or support such actions.
Professionals don’t organize?
I can think of one group of professionals that did organize and organize very well: Medical Doctors.
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The big trend in post WWII American Economics is that from 1945 to 1973 GNP doubled (increased 100%) and the income of each income group increased in lock step with that increase in productivity: poor, working class, middle class, upper middle class and the rich – everyone’s income doubled. Then the inflection point from 1973 to now the average wage has stayed the same while the 1% has captured all the increases.
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Everyone’s income has either gone down or stayed the same. This is because, in America there is only one governing principle, free contract, and in such a system bargaining power is everything. Most groups have seen their bargaining power contract. Not the rich… and not Doctors.
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Doctor’s income has gone up – to the point that they are consistently in the 1%. I have a friend whose Dad’s a doctor, he’s a multi millionaire many times over, complete with family foundations and everything.
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The failure of technology professionals to recognize this and organize reflects, I think, the methodology of how many technology workers think, which is sequential and not lateral. Many tech workers work away in their particular trench and seldom lift their head up and see where things are going globally.
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Anyway, maybe that assessment isn’t pin perfect, but perhaps something like that.
Organize? To what end?
“We’re withdrawing our labour till you meet our demands”
“Ok, we’re saying no to you and offshoring the work”.
That’s a pressure doctors don’t face.
The cost of becoming a doctor is much higher than the cost of becoming an engineer.
You are at least 30 after 4our years college, four years med school, residency of at least 3 years and much more for specialties, with 12 hrs a day and sometimes shifts of 24 hours or more.
It’s true that the AMA manages to block out competition better than engineers. You have H1B visas while doctors in Canada cannot come to the US and practice without first doing a residency.
took me 6 years (after B.S. degree) to get a EE PhD, followed by 2.5 years of post-doc (at IBM!)
8.5 years is definitely comparable to the time-sacrifice of MD’s. Why don’t we have comparable remuneration and job security? Because we don’t demand it and we don’t have institutions in the profession that look out for our needs.
What wussies we all are…
“What are they going to do, fire you?” Are you serious, Bob? Let’s look at another quote from your article, “IBM has one of the largest legal departments of any U.S. company, they have another army of private lawyers available on command …”.
What are they going to do? They’re going to sic that massive legal team on you, straight up lawfare (https://en.wikipedia.org/wiki/Lawfare). Gambling on the ability to do the charge anonymously to protect us is very weak indeed – privacy and anonymity is dead. If IBM is willing to so flagrantly break laws, what’s a little more to shut this down? You may get a PR victory that puts a fine feather in your cap but this is our lives and potential ruin. Losing that crappy severance package is the least of the worries.
You got no skin in this game, most of us still have kids in college and bills to pay and can’t afford what IBM can do. The risk/reward payoff is too poor to go against the largest legal army in corporate America.
You probably took a bigger risk posting on this board than you would filing an EEOC as Bob asked. After all, they could likely determine your home IP address since you likely use your work computer from it and since this site doesn’t have SSL/TLS, they could be sniffing and tracing all traffic to it (even if you used your home computer, it’s still from the same internet-facing IP established by your home router. No lawyers required.
There is strength in numbers, and that was the point of Bob’s article. He’s trying to help, because he dislikes IBM and what they are doing as much as anyone. It’s wrong, and that’s when people are supposed to stand up, not cower. Where would we be if not? Don’t give in, fight back. IBM has to use those legal resources to fight off the many lawsuits from SCO and other IT companies, and the many, many customers they have screwed over, if you haven’t been reading the news.
Have some gonads, stand up to the evil borg.
you don’t have to be using your work computer, there is software out there that checks patterns of grammar and word usage and petty well tags you from signed posts elsewhere on Da ISH. depends on how bad they want your scalp on the door.
in contrast, if you file an EEOC charge, you are now in Protected US Government Whistleblower Territory. which in the end doesn’t mean much, but only the gnarliest weasel loads and locks over it.
basically, their HR only reports “subject left company mm/yyyy” due to the many, many lawsuits over the years. so if you slide sideways in your tech career, even the bar talk is probably not going to wreck your life.
if it was Apple or Microsoft badmouthing you, hands would tremble. it’s IBM, they’re big, bloated, going downhill, and everybody knows it.
if you persevere, you can win even if they get after you. I am aware of a similar bad-dismissal case underway that got tossed out of district court with sharp rejoinders in every paragraph against the “we are big, so every lie we say is truth” nonsense legal spun up. reparations are still in negotiation. the case illustrates why workers should be unionized, by the way. the union fought it to success.
“if you persevere, you can win even if they get after you.” And that’s my point but let me fix that for you: “if you have the resources to persevere, you can win even if they get after you.”
Again, this is about resources through numbers, not an individual going it alone. I think that’s the 3rd time trying to get that across to you. As far as posting with real name, there’s a difference between gonads and stpudity.
Yeah, well, when you post with your real name and email address you can talk about my having the gonads to stand up to the evil borg….
“most of us still have kids in college and bills to pay and can’t afford what IBM can do. The risk/reward payoff is too poor to go against the largest legal army in corporate America.” –
Except there is no reward if you get RA’d, you get four (4) weeks pay, maybe vacation time pay, that’s it. If you get RA’d, and if you’re over 50 and say a developer or architect, you can kiss all the bills goodbye because you’re finished financially. You will never get a job paying what you were being paid before you were RA’d. In essence, since you lost everything, you now have nothing to lose!
If you are in your fifties hopefully you have something put away to fall back on. Do you really want to spend your savings in a futile war against a corporate giant?
IBM has been very clear about the changes in how they treat their employees, and it is very clear that IBM’s market position leaves them less able to support the workforce of prior years. Why would anyone plan on retiring from that company?
Very few if anyone is going to challenge any RA package they might get for the reason that they need the job and the money right up until they get shown the door. It sucks that they might have to train an offshore replacement but a job is still a job with a wage and ‘training’ can always vary in quality.
As for strength in numbers. Remember the Alliance at IBM (now Watching IBM on Facebook) They campaigned for years and never got the membership numbers and that was among people that still had a job and something to protect. If you’re heading out the door, do you really think most people would jeopardize what little they may get for pretty much nothing.
The only people with any hope of standing up to IBM are anyone about to retire anyway or anyone with enough spare cash that they don’t care. Either way, they are probably out the door and not looking back.
IBM knows it’s got most of its employees over a barrel in this situation and that it has the upper hand.
If IBM blatantly discriminated can its CEO and board face criminal charges? Do they belong behind bars instead of driving a once-great US co into the ground while they strip mine it? Are they also violating H1B and L1 visa laws? MOre criminal charges? How does one break up an organized crime ring if it can keep everything secret?
As a 45-year-old very experienced, high-earning IT worker, I’d just like to thank you for encouraging lawsuits that will remind potential employers that they can reduce the risk of high legal expenses by not hiring older workers who might then file age discrimination suits against them if the job doesn’t work out.
While age discrimination regulations make it tougher for guys like me to find jobs, at least you get to feel good about yourself and that’s the really important thing, isn’t it?
http://townhall.com/columnists/johnstossel/2008/08/13/whose_business_is_it_anyway
He has a point “The government once even tried to force Hooters, that restaurant chain famous for sexy waitresses, to hire men to wait on tables.”
IBM may be FLOUTING laws right and left, but they definitely are not FLAUNTING them.
Most of these RAs are under the guise of ‘Work Elimination’. This basically says IBM will no longer do that kind of work anymore. NCP coders and developers went the way of the dodo and IMS and DB2 will eventually do the same. (Just try to get new features or function in IMS) Work Elimination pretty much allows massive reductions with minimal paperwork necessary because EVERYONE in the area gets whacked so there can be no bias.
Then the question becomes “Do you have the skills that we need TODAY?” If you don’t then you are not going to find another job in the grace period given. (as if)
And in areas being eliminated with older technologies, when most or all get cut, it seems reasonable that most or all are older workers. I’d be more concerned with areas where foreigners are being used and replace US Workers, that’s discrimination (age, nationality, sex as most young males).
This.
After leaving IBM from a project management role I have stepped back into hands on technical work at my next job. In the 20 years since I was a programmer at IBM, the whole way you do the job has changed. Not just the hot skills but the way you apply them.
And, if you watch the job ads, you need to recognise that IBMs sliding market share translates into less roles for IBM products vs competitors. So for example, I was able to translate my DB2 knowledge to SQL Server, but it has taken some work.
To be honest, I personally needed to leave IBM to renew myself. It was a roll of the dice back then, and it’s a bigger roll now with the reduced package, but sometimes you just have to roll the dice and make it work.
Love you guys………… 14,000 people losing their jobs and you’re worried about flaunt vs flout !!
Sherlock – 14,000 people losing their jobs and you’re going to eat 3 square meals today!
Similar logical fallacy.
Time and a place my friend – time and a place !!
…………….. and I’m not bringing my 3 squares up – as it were !!
EVERYONE SHOULD READ THAT SEPARATION DOCUMENT. This shows how messed up our legal system has become and how badly companies are treating their employees. As companies like IBM push the boundaries, many others will follow. We are reverting back to the really bad times of the late 1800’s and early 1900’s when worker abuse was epidemic.
Bob, it would be nice if you had a lawyer who could back you up on this.
While it sounds interesting, I just have no confidence in your legal expertise.
I also have no confidence that IBM hasn’t bought influence over the EEOC which has become very politicized.
Follow the advice, Do the right thing and stop acting like sheep and being intimidated. Never let them see you sweat. The IBM Corp is leaderless and run by cowards.
So sue your manager and their manager, and their manager and … (FLM, BUE, the made up Executive Title, and the useless VP), not to worry there are at least three more levels above them. They will all shit themselves when they realize they are on their own and the gums will start flapping…. More nervous comments like “we tried to target those close to retirement”.
Always remember and never forget …. these guys drink the coolaid … are clueless amateurs. Hoping they can hang on in liew of doing actual work for the remainder of their careers. Never worked in a shop, no idea what IT is .. Think IT is email and a smart phone … Empty Suits ! The closest thing I’ve seen too WATSON is Tom’s +8 at the Masters today. At least that was more then a marketing metaphor.
Legal action may be tempting and viscerally satisfying, but at this point one has to consider the likelihood of substantial recovery. According to the accounts I’ve read, IBM is now handing out statutory minimum severance packages…why? For 20+ years they had a standard RA package of 1 week per 6 months of service, and now they have reduced it (in the US anyway) to just one month? If you are one of the (un)lucky ones, you might challenge a termination by legal action or complaining to government, but what do you hope to gain? The time to mount a successful challenge to the company was in years past, when the company had money and substantial business value. But now, with major components of the business sold off, endless numbers of employees fired, unwilling (and/or perhaps unable) to pay substantial severance…the distressed employee might be better off just walking away and finding whatever they can to sustain themselves.
Oh please.. You are implying that IBM has been reduced to a poor mom-and-pop operation from which substantial recovery is impossible. IBM is still an 81 billion dollar monster who could afford to pay its CEO $19.8 million last year. It is not like in the event of a court loss, IBM will declare bankruptcy and refuse to pay. If there is a viable case against IBM, IBM should absolutely be sued to the fullest. The problem is no one truly knows if there is a case.
What you say makes perfect sense in the abstract…IBM does indeed have the appearance of wealth, and certainly they should be held accountable in some way for their misdeeds. But anyone who has worked for the company over the past 10 years knows how “cash-poor” their operations really are. No money for training and education (except for upper management), cutting back on facilities and maintenance (think bathrooms and faucets), severe cutbacks on travel and telecom expenses (except for upper management), getting desktop or laptop computers…the list is endless. It is true that they are a multi-million dollar firm, but those dollars certainly haven’t gone to basic operations. And now, after 20+ years of resource actions with decent (if not totally generous) severance packages, they NOW choose to drop down to the minimum legal requirement? Good luck finding a lawyer…a viable case indeed.
But these are the bureaucratic decisions by a public company that has monetized itself to the point that it cannot do anything. I walked into a conference room in one building Monday to attempt to do some training for a business partner. The room had a glass window and the projector (20 years old, 800×600 resolution) would not even connect to my brand new Macbook. The rack with the AV equipment still had a Laserdisk, a cassette player, the “back room” where the projection system was still had a Kodak slide projector on the floor, from the 1970’s! He was explaining that IBM has a “property company” that runs the building. They have put in request after request for 5-10 years now. The quotes that come back are $10,000 – $20,000 per conference room, as the IBM management of the property management company have to “pay their management” and “pay the construction company”. No management staff has that kind of budget so no one upgrades the conference rooms. The “antique value” of the equipment would probably pay for a 40 inch HDTV and a cart. I told the building manager he needs to “take up a collection”, because it’s evident that IBM will never solve that problem. If we use this building again, my business partner will bring his own HDTV to solve the problem.
IBM has been monetizing itself for years. Structurally speaking, IBM is a collection of businesses managed by CHQ in Armonk. The only real connections between the businesses is that they are told to use each other’s stuff. IBM Global Services and its predecessors (ISSC, Advantis, etc.) were vehicles intended to use and/or monetize what were then considered “idle” resources.
Gerstner was certainly money hungry, but he decided as a strategy that a whole IBM was worth more than the sum of its parts. His successors decided the opposite, and they got their wish…a bunch of separate parts with increasingly questionable value, being whittled down year-by-year by top management looking to cash out. Regarding the original topic, let’s say that one or more employees got together and successfully sued IBM for their actions. How would IBM pay? It’s an interesting legal question, but it’s a question that I suspect not many lawyers will ask unless there’s a TON of money in it (because it involves the court involving itself in the business). The bottom line is that despite appearances, the IBM of 2016 is not a Google- or Apple-like company with gobs of idle cash. There would be substantial business impact resulting from a successful lawsuit.
I suspect IBM has for a long time now had new hires sign an employment contract that explicitly states that in the event of a seperation, you agree that it be handled through compulsory arbitration.
FWIW, as a young first-line manager I was involved in the selection process for a couple IBM “Resource Actions” maybe 6 years back. The process that I experienced did not include a whiff of age discrimination and there were several instances where we were reminded by HR that we could not discriminate on the basis of age.
One should consider that there may be other reasons why layoffs (or the sample of layoffs reported to this blog), may skew towards older workers. For starters the businesses hit hardest often skew to older workers. And I wouldn’t be shocked if your readership skews a bit older as well.
Anyway, none of this changes the fact that IBM is a sinking ship with an executive leadership team intent on sucking it dry. So I do appreciate you taking the time to point out just how obscene it all is.
In my view, the nastiest action they took a few years back was to shift IBM matching 401k payments to a lump sum at the end of the year. Besides the gain in carried interest, if you happen to get the axe before 12/31 they stiff you on the 401k payments. Evil diabolical genius.
I agree with Stanwood that that was evil, but it was wonderful because it was the straw that broke the camel’s back for me and got me off my ass and out the door. Best decision I ever made. It wasn’t the money, it was the callous disregard for what is fair to the employees, and the disrespect that that showed.
Yüzlerce kurum arasında en ideal seçim olan kurumumuz alanında uzman eğitmenleriyle eşlik eden kurumumuz binlerce yüzel sanatlara hazırlık alanında mezun öğrenci mezun etmiştir. Sizleri dünyanın dört bir yanında en kaliteli eğitim modellerini inceleyip sunan kurumumuz küçükçekmece resim kursu olarak yeni dönem kayıtlarını almaya başlamıştır.
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I worked in Hollywood in the 90s. The unions filed a suit that claimed age discrimination, so everyone had to fill out forms stating if they were over 40. The funny thing is I was in my 20s and there were very few people my age who had made it yet. The baby boomers totally dominated and they were already claiming age discrimination. Not only that but they really did purge the group ahead of the them. In the late 60s early 70s all the studios nearly went under because of age conflicts. The studios survived by selling their real estate and their logos.
In Detroit it was the older generation that rigged everything up, creating almost all of our current problems. They should have been fired en mas in the early 80s but instead everything was rigged until they sucked the auto business dry. The baby boomers avoided that by leaving for California and going into tech. It’s my generation that was screwed. They went so far in the other direction with us it’s already a problem to find good managers, and I work in tech now. Few Americans last long enough and the foreign people don’t either. So we don’t have to worry about not getting a big pension. We never had secure jobs.
On the Watching IBM facebook page, the admin says he got a note from Bob that said “The way the separation package is written one must file their EEOC complaint BEFORE they accept and sign the agreement, and leave IBM. If the complaint is filed after, the arbitration process will limit the settlement to $zero. ”
So does that mean that if we get RA’d, we should file the EEOC complaint, which is supposed to be anonymous, and then sign the RA agreement? I think everyone is confused at this point.
I’m confused as well. But what I think I’m reading is that if you file an EEOC complaint before the termination date, you’re preempting the servance agreement’s stipulation that you will not file suite/ receive damages from IBM. The way EEOC works is that they can reach a voluntary settlement with IBM on our behalf. I think filing before the termination date is to allow you to receive that settlement if it occurs … not to allow you to sue. What I’m less sure about is whether you can file anonymously and still be protected with regards to the settlement.
I was talking to a man the other day who did IT for a small company started in 1980.They started with a system 36 and in the late 80’s he seriously considered changing to an AS/400, but after reading the fine print, yes IBM could convert his 36 business applications to AS/400, but would charge his company for conversion costs every time there was a major update in OS400.
He ended up using PCs.
Does this sound like a correct claim?
If it is, I think IBM probably still thinks like this, which could be a big part of IBM’s problem.
I believe you could run an AS/400 in emulation mode so that it looked like a S/38 or a S/36 and ran their native applications. However we did migrate a few of our remote sites to the AS/400 without the help of IBM. Whether the story is true or not isn’t something I could tell without seeing the contract.
I doubt it, but anything’s possible.
In 2015 I was paid an obscene amount of money to finally re-engineer a unit-record (think 80 column card and ledger) application that had run on a System/3 Model 6 which had been converted to a S/32, then running System/32 emulation on a S/34 running under S/36 emulation on an AS/400 running IMPI simulation on a Power PC I-Series.
Rich
The only reason I was chosen was I was the only one they found without Alzheimer’s or dead that had worked on all those ancient technologies and software layers.
Oh, and BTW the customer could have just gone and used Baby/36 by California Software and just run it on an intel PC as well.
Watson Group Layoffs:
https://www.reddit.com/r/IBM/comments/4fbsm9/anyone_else_told_they_have_30_days_to_find_a_new/
You ask “what are they going to do, fire you?”
What they will do is not give you any severance or benefits at a time when you are shocked by what is about to happen to you, a departure you are undoubtedly not prepared for. IBM (and other companies) take deliberate advantage of a circumstance of their own creation.
If you sign the Agreement, please note Attachment 6, page 28, under item “2. What you release by signing this agreement”:
“By signing this Agreement you release IBM from ALL claims…including without limitation…all state and local laws prohibiting discrimination on the basis of age”
Unless a lot of folks over 40 are willing to forgo the severance, IBM will get away with it.
“… at a time when you are shocked by what is about to happen to you.”
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Anyone who is ‘shocked’ at getting fired by this company has obviously been in denial for a very long time. Wake up people, this has been the big blue business model for the better part of two decades, the handwriting has been on the wall for eons.
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As the saying goes, it’s easier to find a job when you have a job and that is precisely why I packed up and told them where to stick it about 5 years ago. Even better, I now have the job of keeping IBM product out of my shop whenever possible. I get a real kick out of watching our IBM marketing rep grow a frown every time I walk into his sales pitch.
What IBM cannot off-shore themselves, they are outsourcing themselves. Instead of just selling off the entire division, they are outsourcing in piecemeal to vendors better equipped where IBM could not. Once the transition is complete, there will be another huge wave of layoffs for those that stuck around for the dead dog party. What will be left remains to be seen, but it will be primed for another major selloff, one long in the making, and to make the price look appealing. While upper management may be holding their plans tight to their chest, the writing has been on the wall since Server and Desktops were sold off to Lenovo.
There was a meeting late last year where the speaker talked about the growth of competition in the last ten years and the loss of IBM’s Market Share to competitors that wasn’t there before, and how this latest “transformation” was to bolster (re-brand) the division (not just IBM) to win back market share. This has since turned into smoke and mirrors, and the first thought to cross my mind was, “What did you expect from the thousands of IBM’ers that were layed off over the years?” Did they expect these former employees to simply just go away or only go work for the other big competitors (Dell, HP, etc) instead of forming their own companies to become the competitor? The chart looked more like a list of “places to apply when your RA comes, if you aren’t sold off with the division.”
Unfortunately, this new 2016 RA package is a shell of the former package that could have bought the silence from those affected. Now those that have patiently waited for their ship to come in will be left with an inflatable dingy and no oars, so I think the EEOC action outlined above will come to fruition this time around.
What I find most curious about IBM’s business is their dramatic revenue falloff OUTSIDE the US.
In 2011, US revenue was $37b; non-US $69b (of which 11b was japan).
In 2015, US revenue was $31b (-18%); non-US $51b (-27%).
Meanwhile, assets have fallen 26% in the US and 11% elsewhere.
Why are they shrinking the US so much more quickly (in assets) when their non-US revenue is falling much faster than at home?
The explanation for deeper falloff in revenue outside US stands primarily in currencies variations. Now you certainly have a point on assets because it should be the same in that area and it seems to be the reverse. It’s all the more surprising as most of the goodwill, generated after the recent acquisitions, must reside – I would assume – in the US rather than in the rest of the world. Goodwill, call it intangible or “garbage” assets if you will, is an interesting subject in itself…
You’re right on the currency – there was a currency effect of about $-5.5 billion from 2011-2015 (using IBM’s estimates on their financials).
That said, constant-currency revenue growth was still negative, to the tune of about -15%.
The asset figures exclude goodwill – they include just net property and plant (for just the reason you mentioned).
Just to point out, IBM’s dubious, doubtful, unethical or downright illegal actions on redundancy are not confined to USA. In the UK there are (at least) two cut-offs that should trigger action. An action losing over 100 workers means the govt has to be informed, over 20 means a ‘consultation’ has to be undertaken to see if there are alternatives.
A couple of years ago IBM rode a tank through the legislation by starting several actions in different business areas at the same time, all losing 99 or fewer people. The legislation is typically toothless as it is upto ‘someone’ (a workers organisation? a union? a rich worker?) to challenge their interpretation of the law. The government aren’t interested.
Having got away with that, the latest approach is lots of ‘mini-actions’, each less than 20 people so they don’t need to consult. First you know of it is an urgent, priority meeting with your manager.
As you say above, how could a company that made a reputation of its ethical, principled approach to business have stooped so low.
Now that the severance is all but gone, unless you’re a very very long term resource looking at a pension there’s nothing to lose. I was RA’d under the old rules (1 week/6 months) and glad to get out. The current plan of a month severance a few months notice is just pathetic. A once great company flushed in favor of marketing campaigns to create a false narrative of what they have. Under the covers, not so much.
They still can’t get it right, more layoffs this week.
https://www.wsj.com/articles/ibm-layoffs-continue-1463784692?mod=WSJ_TechWSJD_NeedToKnow
This is a keeper.
https://www.glassdoor.com/Reviews/Employee-Review-IBM-RVW10495656.htm
You’re on the right track, Cringely, but you’re seeing it from a slightly incorrect angle.
IBM does NOT practice age discrimination: What they practice is WAGE discrimination.
It doesn’t matter how talented you are, or how well you perform, when they want to cut costs, they look at one thing and one thing only: Your salary. And, since most people who perform well get better raises (at least in the old days) – and are the ones retained back when layoffs USED to get rid of lower-performing people, they tend to all be older people in the workforce – those with the skills and knowledge that have made them valuable to the company thru the years, and thus retained and rewarded. But no longer. A couple of years ago the layoffs only affected (in my division) people of a certain band or higher, and that is exactly what is happening again this time. I’ve been told straight out that they are only looking at those that make the most money, so they can presumable replace them with either super-cheap offshore help, or college grads at entry-level wages. Period.
So IBM continues to get rid of all its best and brightest (for the most part) – and yet they are still so clueless they can’t see the connection between that and their business going down the tubes. Duh.
Of course, getting rid of Ginny and her $20 million compensation would save much more money without harming the company nearly as much as axing all of their top talent, but I’m sure her golden parachute for when IBM finally does go under for good will dwarf even that.
Looking around me and watching the Titanic sink lower every day.
I meant to add, as further proof of what I just stated:
Despite being a consistent top performer, I simply hadn’t been with the company as many years as most when I was outsourced to IBM (and my career and raises came to a screeching halt) – so my salary is pretty much frozen at a lower band than many. Finally had to accept what I had known all along, with the latest corporate THEFT of the severance pay it was finally hammered home to me that there is 0% future here. So during a recent review I asked if I could volunteer to be placed on the list for the next RA and was told that I probably wouldn’t qualify, as I didn’t make enough money. They were only looking at higher salaries. Game, set, match.