IBM, Oracle under the scanner again for questionable hiring and firing policies

4 min read

The Guardian has come forward with reports of Oracle coming under the scanner for payscale discrimination between male and female employees. On the very same day, The Register reported an affidavit has been filed against IBM for hiding the age of employees being laid off from the company from the Department of Labour.

Pay scale discrimination at Oracle

“Women are getting paid less across the board. These are some of the strongest statistics I’ve ever seen – amazingly powerful numbers.”
-Jim Finberg, attorney for the plaintiffs

On 18th January, a motion was filed against Oracle in California that alleged the company’s female employees were paid (on average) $13,000 less per year than men doing similar work, The Guardian reports. More than 4,200 women will be represented in this motion after an analysis of payroll data found that women made 3.8% less in base salaries on average, 13.2% less in bonuses, and 33.1% less in stock value as compared to male employees. The analysis also found that the payment disparities exist even for women and men with the same tenure and performance review score in the same job categories!

The complaint outlines several instances from Oracle female plaintiffs who noticed the discrepancies in payment either accidentally or by chance. One of the plaintiffs saw a pay stub from a male employee that drew her attention to the wage gap between them, especially since she was the male employee’s trainer.

This is not the first time that Oracle is involved in a case like this. The Guardian reports that in 2017, the US Department of Labor (DoL) filed a suit against Oracle alleging that the firm had a “systemic practice” of paying white male workers more than their counterparts in the same job titles. This led to a pay discrimination against women and black and Asian employees. Oracle dismissed these allegations and called them “without merit” stating that its pay decisions were “non-discriminatory and made based on legitimate business factors including experience and merit”. Jim Finberg, the attorney for this suite, said that none of the named plaintiffs worked at Oracle any more. Some of them left due to their frustrations over discriminatory pay.

The suite also mentions that disparities in pay scale were caused because Oracle used the prior salaries of new hires to determine their compensation at the company, leading to inequalities in pay. The suit claims that Oracle was aware of its discriminatory pay and “had failed to close the gap even after the US government alleged specific problems.”

The IBM Layoff

Along similar lines, a former senior executive at IBM alleges in an affidavit filed on Thursday in the Southern District of New York, that her superiors directed her to hide information about the older staff being laid off by the company from the US Department of Labor.

Catherine Rodgers, formerly IBM’s vice president in its Global Engagement Office was terminated after nearly four decades with IBM. The Register reports that Rodgers said she believes she was fired for raising concerns that IBM was engaged in systematic age discrimination against employees over the age of 40. IBM has previously been involved in controversies of laying off older workers right after the ProPublica report of March 2018 that highlighted this fact.

Rodgers, who served as VP in IBM’s global engagement office and senior state executive for Nevada had access to all the people to be laid off in her group. She noticed a lot of unsettling statistics like:
1. All of the employees to be laid off from her group were over the age of 50

2. In April 2017, two employees over age 50 who had been included in the layoff, filed a request for financial assistance from the Department of Labor under the Trade Assistance Act. The DoL sent over a form asking Rodgers to state all of the employees within her group who had been laid off in the last three years along with what their ages were. This list was then reviewed with the IBM HR, and Rodgers alleges she was “directed to delete all but one name before I submitted the form to the Department of Labor.

3. Rodgers said that IBM began insisting that older staff came into the office daily.

4. Older workers were more likely to face relocation to new locations across the US.

Rodgers says that after she began raising questions she got her first ever negative performance review, in spite of meeting all her targets for the year. Her workload increased without a pay rise.

The plaintiffs’ memorandum that accompanied the affidavit requests the court to authorize the notification of former IBM employees around the US over 40 years and lost their jobs since 2017 that they can join the legal proceedings against the company.

It is bothersome to see some big names of the tech industry displaying such poor leadership morales, should these allegations prove to be true. The outcome of these lawsuits will have a significant impact on the decisions taken by other companies for employee welfare in the coming years.

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