Age Discrimination in the Tech Industry
Over the last few years high-profile age discrimination lawsuits have rocked the tech industry – perhaps not surprising as the average tech-worker is 5 years younger than the average non-tech worker. (State of Startups). Big names like IBM, Google, and HP have been on the defensive end of many of these claims, ultimately paying out millions in settlements (Gurchieck, SHRM; Riggio, DiversityInc). Most notably, IBM was the subject of a rare multi-year Equal Employment Opportunity Commission (“EEOC”) investigation that found more than 85 percent of redundancy and rolling layoffs impacted older employees, age 40 or older, between 2013-2018 (Dorrian, Bloomberg Law; Callaham, Forbes). The investigation confirmed a pattern of systemic age discrimination, where IBM pre-selected older employees for layoffs and had managers alter their performance evaluations to justify their firing, giving adversely impacted former employees a strong basis to file age discrimination claims (Dorrian, Bloomberg Law).
The most recent age discrimination case was filed against IBM in September 2020 by 15 former employees claiming their careers were cut short by IBM’s hire-and-fire scheme – where the company pushed out older workers while simultaneously hiring recent college graduates “en masse” (Kinney et al v. International Business Machines Corporation). Similarly, HP was also hit with a class action age discrimination suit in May 2020, with over 100 former employees claiming the company willfully violated the Age Discrimination in Employment Act (“ADEA”) by laying off workers who were over 40 at a greater rate than younger employees (Dorrian, Bloomberg Law). The suit also claims HP management directed hiring managers that a certain percentage of outside hires should be younger graduates or individuals early in their careers. (Id.) While both these complaints have yet to reach a resolution, precedent shows us both claims could settle to the tune of millions of dollars. Faced with these larger class action suits, employers might start pushing back.
These class-action suits are brought under the federal ADEA, which forbids discrimination against people who are age 40 or older. (EEOC). However, with some evidence showing some tech companies discriminate against employees as young as 35, many employees are left to rely on state laws that protect employees younger than 40. (Id.) Employee-plaintiffs carry a higher burden in proving age discrimination claims – requiring employees to present more proof of discrimination than the companies they are filing claims against. In 2009, the Supreme Court held a plaintiff in a federal ADEA claim must establish that age was the “but for” cause for the discrimination – meaning there were no other intervening factors other than the employee’s age that contributed to the adverse action. (Gross v. FBL Financial). However, given that many age discrimination cases are resolved through settlement, plaintiffs are rarely held to this standard. As these claims become more frequent though, it is easy to see why employers might want to invoke this standard against employee-plaintiffs, instead of looking to settle these cases.
Litigation and settlement are not the only routes available to companies. Age discrimination is the most ubiquitous form of discrimination unchecked in the workplace – and not just in the tech industry (PwC Annual CEO Survey). For most organizations, age is not on their radar. Currently, only 8 percent of companies have diversity and inclusion strategies that include age as a focus. (PwC Annual CEO Survey; Callaham, Forbes). With more baby boomers nearing retirement age, the potential for age-related discrimination is increasing. Employers can choose to either take action and create an age-inclusive organizational culture or leave themselves open to possible litigation. Practices like removing labeling phrases in job postings, such as digital native or young professionals, or upskilling – training employees on new competencies as industries develop and change – are tremendous opportunities for employers. (Skrzypinski, SHRM; Riggio, DiversityInc; PwC Annual CEO Survey). In a survey conducted by PWC, they found organizations that embrace upskilling achieve improved workforce productivity, greater business growth, improved retention, and greater innovation. (Riggio, DiversityInc; PwC Annual CEO Survey). Not only do these outcomes benefit the company in the short-term by driving success or productivity, but when it is time for certain employees to leave the company – either through retirement, moving to a new opportunity, or even in the event of layoffs – those former employees depart with a sense of loyalty to the company, and in turn are less likely to bring discrimination claims.
Ultimately, employers in the tech industry have a choice – continue to weather age discrimination claims as they arise or recognize the opportunity to address age discrimination head-on and transform it as a competitive advantage.