Lamberton Law Blog

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IBM collective action waivers and private arbitration

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Is IBM ingenious or has it shot itself in the head? Time and the Supreme Court will soon tell. As those following IBM's force reductions over the last few years already know, IBM stopped asking its terminated older workers for releases of their federal age discrimination claims in 2014. By not asking for federal age waivers, IBM placed itself outside a law that would ordinarily require it to disclose the job titles and ages of people selected for termination and people not selected for termination. So what is the catch? Although it does not request waivers of federal age claims, IBM does require anyone who accepts severance pay to privately arbitrate their federal age claims and to waive their right to proceed in arbitration on a class or collective action basis. This move could be a stroke of genius or it could be one of the costliest legal mistakes IBM has made in a long time.

Later this year the Supreme Court will decide whether “an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration, and waive class and collective proceedings, is enforceable under the Federal Arbitration Act, notwithstanding the provisions of the NLRA.” If the Supreme Court says no, IBM will have a lot to worry about. Stay tuned.

Pittsburgh employment lawyer Charles A. Lamberton. Representing executives, managers and professional employees in discrimination, retaliation, sexual harassment and wrongful termination cases for 20 years. High end representation for high end cases and clients. Contact us today.