jump to navigation

Supreme Court lets stand IBM victory on pension discrimination January 17, 2007

Posted by C.A.R.D in Age Discrimination, Card, Citizens Against Racism and Discrimination, Discriminate, Discrimination, IBM, Supreme Court.
trackback

The Supreme Court today refused to consider an appeal brought by a group of IBM employees who accused the company of age discrimination when it altered its pension plan. The lawsuit could have cost the company $1.4 billion.In the case, a former IBM employee named Kathi Cooper served as the lead plaintiff in a class-action suit brought on behalf of 250,000 current and former IBM workers. The suit argued that IBM’s “cash-balance” pension plan was discriminatory because it allowed younger workers to accrue benefits in the plan at a faster rate than older workers.

IBM switched to a cash balance plan in 1999. Such plans provide workers with individual accounts that can be cashed out when they leave the company and are intended to appeal to younger workers who are more likely to switch jobs.

The IBM case has been closely watched, as roughly 1,500 companies have adopted cash-balance plans. The company earlier agreed to settle the case for $1.4 billion if it lost in the courts.

But the 7th District Court of Appeals, based in Chicago, sided with IBM in August, ruling that the “terms of IBM’s plan are age-neutral.”

In addition, Congress passed legislation, also in August, that clarified that cash-balance plans complied with the age discrimination provisions of the Employee Retirement Income Security Act.

Cooper’s lawyers argued in court papers that the legislation applied only to future cash-balance plans, and did not affect existing cases such as IBM’s.

Shares of IBM rose 60 cents to $99.94 in early trading on the New York Stock Exchange.

C.a.r.d {Citizens Against Racism and Discrimination} Source: Seattle Times

Advertisements
%d bloggers like this: