On Tuesday February 13th, 2001, nine white-collar employees filed an age discrimination suit against the Ford Motor Company. They claim that Ford’s new evaluation policy that was instituted in January 2000 is being used to systematically weed out older workers.
The new evaluation policy, called the Performance Management Process, uses a bell curve approach in the grading of Ford’s managers and engineers. Under this system, 10% of employees would receive an “A“ grade, 80% would get a “B” and 10% receive “C’s”. Those in the lowest category would not receive a raise or bonus for that year and the repetition of a “C” grade would indicate a possible demotion or termination. The policy has been altered for 2001 so that only 5% of employees receive “C’s” and 85% “B’s”.
The nine plaintiffs who filed their suit in a Wayne County Court, range in age from 47–69 years of age and are claiming that their poor evaluations were unfair and have caused them economic loss and mental anguish. One of the plaintiffs who received a C grade said that he had been chosen last year to participate in Ford’s Six Sigma quality improvement program – a program for top performers. With the previous grading system, long-time loyal managers could count on a promotion – now the younger managers are the ones getting the promotions.
Age discrimination suits are on the rise as baby-boomers age, but as the next case shows they remain difficult to prove.
The U.S. Court of Appeals for the Second circuit ruled on February 12th, 2001, that former Pan Am pilots that were employed by Delta Air Lines after Delta had bought the bankrupt Pan American World Airways'' assets in July 1991 were not discriminated against on the basis of age.
Delta agreed to hire 700 of Pan Am''s 2,600 pilots to fly their newly purchased Pan Am airplanes. According to the collective agreement then in force between Delta and the Air Line Pilot''s Association (ALPA), any new hires would be placed at the bottom of the seniority list. High seniority Pan Am pilots would not accept positions with Delta if they were going to lose their seniority. Delta negotiated with the ALPA to spread the new pilots throughout the seniority list, but many experienced pilots were still placed lower than less experienced Delta pilots. In their suit against Delta the former Pan Am pilots said they should have been able to negotiate seniority with ALPA themselves.
Other company policies that the former Pan Am pilots found discriminatory were Delta''s post-retirement health insurance plan that Pan Am pilots failed to qualify for, the three years it took to reach wage parity with the Delta pilots and pension benefits lower than those for Delta pilots.
Judge Joseph M. McLaughlin found no misconduct by Delta but instead attributed Delta''s actions to business decisions "reflecting the grim economic realities affecting Delta and Pan Am at the time".
Troubled Daimler Chrysler announced the planned elimination of 26,000 jobs in North and South America two and a half weeks ago -- 12,300 of the cuts were expected to be U.S. hourly workers. On February 14th, 2001, the United Auto Workers and DaimlerChrysler reached an agreement on an incentive package that will encourage workers to retire.
To be eligible, employees must be 60 years of age with 10 years pension-credited service, or have a minimum of 30 years pension-credited service or whose combination of age and pension-credited service reaches a certain point level. The incentive is valued at $35,000 – half of the money is to be used to buy a Chrysler vehicle and the rest a lump sum payment.
On the following day DaimlerChrysler Canada Inc. and the Canadian Auto Workers also announced that an early retirement incentive deal had been reached. The Canadian workers who are eligible to take early retirement will get $26,000 cash, a $16,000 vehicle voucher and a $10,500 lump-sum payment to offset taxes. DaimlerChrysler is planing to eliminate 2,800 jobs in Canada, so even with this incentive package, about 1,800 layoffs are expected.