Kyndryl, IBM sued for age discrimination by former global software director

Lawyers claim separated IT giants are reading from the same page

IBM and its IT infrastructure spinoff Kyndryl were this week taken to court by an axed exec who had put decades of her life into the tech giant.

MaryKathryn Doheny, who served IBM for 23 years as a Certified Client Executive, transitioned to Kyndryl in September 2021 as Director of Global Software when it was carved from Big Blue.

In March this year, Kyndryl subjected her to a "Resource Action" – a euphemism for a layoff in IBM's world.

Doheny, age 64, sued both companies on Thursday for age discrimination, alleging that Kyndryl, though now an independent business, continues to execute IBM's strategy for getting rid of older workers, even down to using Big Blue's severance resources.

In February, 2022, IBM went to unusual lengths to distance itself from ProPublica's 2018 report that it discriminated against employees on the basis of age and from the US Equal Employment Opportunity Commission (EEOC)'s findings to that effect in 2020.

"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," said IBM's Chief Human Resources Officer Nickle LaMoreaux in a public statement posted to the company's website last year.

And yet IBM has been settling many of the age discrimination cases filed against the corporation following the ProPublica report, not to mention gender- and race-discrimination claims.

Doheny's complaint, filed by Boston-based Lichten & Liss-Riordan PC, contends that Kyndryl, as indicated by its use of terms like "Resource Action" and its reliance on IBM severance materials, has carried over IBM's alleged discriminatory layoff practices.

"Unfortunately, Kyndryl has continued IBM’s playbook of age discrimination," the complaint [PDF] says. "It has recently laid off hundreds of employees, a group which appears to have included a disproportionately high number of employees over the age of forty (40)."

Attorney Shannon Liss-Riordan, whose law firm represents Doheny, spoke to The Register by phone about the complaint.

"We have been taking on IBM for a number of years now for targeting older workers and an attempt to build a younger workforce," said Liss-Riordan. "And we've had cases in court, we've had many cases in arbitration. We uncovered pretty shocking evidence of explicit discriminatory bias by top executives, and one would have thought that after all of this scrutiny, IBM would have put this behind them."

"But unfortunately, we have reason to believe that it is continuing and it appears to be continuing with its new spin-off company Kyndryl."

Targeted

Liss-Riordan said that what's particularly troubling is that Kyndryl has now started a round of layoffs that seems to be replicating what IBM has done, where older workers bear the brunt of the job cuts.

"IBM appears to be trying to distance itself from this and act as though it has nothing to do with this latest round of layoffs because [Kyndryl] is a new company," she said. "But as we put forth in the complaint, IBM's fingerprints are all over this."

The complaint asserts that not only is Kyndryl using IBM terminology like "Resource Action," but it is providing affected employees with the same information resources to do so, right down to the letter.

"The severance package which Kyndryl has offered to laid off employees appears to be based on the severance packages that IBM had offered its laid off employees," the complaint states. "Indeed, they even include the same language, font, and spacing. The resources that Kyndryl has provided electronically to laid off employees were provided on IBM URLs."

And to sign in to the portal associated with those URLs, Doheny is said to have had to provide her IBM employee identification number rather than her Kyndryl number.

Last month, when The Register wrote about layoffs at IBM and Kyndryl, a spokesperson for the spinoff wrote in to take issue with our headline, "IBM, Kyndryl cut jobs even after cutting ties."

Kyndryl's spokesperson said, "You may already be aware that we are a separate company, but the headline could lead someone to think there is a connection between us and IBM. To be sure, our actions have nothing to do with IBM’s."

Kyndryl did not immediately respond to a request for comment about Doheny's complaint. Neither did IBM for that matter.

Liss-Riordan said, "[IBM's] attitude all along has been to deny, which is not unusual for a company accused of wrongdoing."

Strategy

Her firm's litigation efforts also involve a pending argument before the Second Circuit Court of Appeals (In Re: IBM Arbitration Agreement, No.

22-1728 (2d Cir.)) on May 22 to challenge IBM's practice of using arbitration agreements to prevent people from pursuing discrimination claims.

IBM has been partially successful in compartmentalizing former employees' complaints by preventing the sharing of evidence, she said.

"When we would obtain this very incriminating evidence, in one case, IBM attempted to block us from using it in another case, claiming that arbitrations were confidential," explained Liss-Riordan. "And we couldn't share evidence across cases."

IBM, she said, has often used arbitration clauses in severance agreements to prevent employee discrimination claims from ever being heard.

"So this is an extremely important question for the Second Circuit to address now: whether a company can use arbitration to take away rights that an employee would have in court," said Liss-Riordan.

"Unfortunately, after all of these years of litigation and the news coming out and the EEOC investigation, which reached the probable cause determination, it's just disappointing to see that IBM is still up to the same tricks.

"So we filed [this complaint on behalf of MaryKathryn Doheny] and we may be seeking a court order to get notice out quickly to laid-off Kyndryl employees who have a very important choice to make because they've been offered a severance agreement. And if they sign the severance agreement, they may be releasing their claims to pursue a discrimination charge." ®

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