Ex-employees suing International Business Machine Corporation (IBM) for age discrimination under the Age Discrimination in Employment Act (ADEA) asked a New York federal court for judgments declaring portions of the company’s arbitration agreement unenforceable. The complaints alleged that the company, per its top management, engaged in a years-long discriminatory scheme implemented to reduce the number of older workers in order to make way for younger ones.
The filings follow other lawsuits, including a class action matter where the court declined to decide the arbitration provision’s enforceability as the agreement prohibits employees from collective action. Instead, the court directed class members to challenge the agreement individually.
IBM reportedly offered those employees “a very modest severance payment in exchange for a waiver of almost all legal claims, other than a claim under the ADEA.” The agreement directed them to arbitration and required that they submit a written arbitration demand to IBM no later than the expiration of the ADEA’s statute of limitations. In addition, its confidentiality provision was purportedly used to bar claimants from taking advantage of information and rulings obtained in other age discrimination cases challenging the same general discriminatory practices.
One of the complaints filed last Friday explained that the plaintiff, like those in other cases, was laid off for allegedly pretextual reasons in 2017 at age 65. This individual reportedly worked as a Sales Leader for IBM for approximately 15 years until his layoff. According to his complaint, he signed the agreement, then attempted to pursue an ADEA claim in arbitration.
While arguing this ADEA claim, the former employee contended that it was timely, pursuant to the single filing, or “piggybacking,” rule permitting “plaintiffs in discrimination cases to refer to earlier classwide administrative charges of discrimination for statute of limitations purposes.” IBM took a contrary position, asserting that the arbitration agreement does not allow for “piggybacking,” and thus bars the plaintiff’s untimely ADEA claim. The plaintiff countered that the piggybacking provision is unenforceable as an “an improper waiver of substantive rights.”
Because of another clause in the agreement requiring Article III courts to review enforceability disputes in such cases, the arbitrator declined to adjudge the matter, leading to the instant complaints. The filings thus request a declaration that IBM’s enforcement of the no-piggybacking rule has impermissibly and significantly shortened the plaintiffs’ ADEA limitations period and that its confidentiality provision is unenforceable.
The plaintiffs are represented by Lichten & Liss-Riordan P.C.
