Age Discrimination - Hewlett Packard Says Out With the Old, In With the New

Age discrimination has been charged against Hewlett-Packard in a recently filed lawsuit that proposes to be a nationwide class action for older employees fired since 2012 by the technology giant. A review of the complaint shows that it stems in large part from statements by CEO Meg Whitman regarding her goal to transform HP's labor force, getting rid of older employees and aggressively incorporating younger employees.

The statements by Ms. Whitman quoted in the complaint include the following:

So, as we think about our overall labor pyramid at Hewlett-Packard, we need to return to a labor pyramid that really looks like a triangle where you have a lot of early career people who bring a lot of knowledge who you're training to move up through your organization, and then people fall out either from a performance perspective or whatever.

And over the years, our labor pyramid doesn't look – has become not a triangle. It's become a bit more of a diamond. And we are working very hard to recalibrate and reshape our labor pyramid so that it looks like a more classical pyramid that you should have in any company and particularly in ES. If you don't have a whole host of young people who are learning how to do delivery or learning how to do these kinds of things, you will be in for real challenges.

In an interview in November 2015, Ms. Whitman was more explicit regarding HP's personnel policies:

Interviewer: You did announce significant job cuts about a month or so ago ... Is that going to be it for HP?

Ms. Whitman: That should be it. That will allow us to right-size our Enterprise Services business... to make sure that we've got a labor pyramid with lots of young people coming in right out of college and graduate school and early in their careers. That's an important part of the future of the company ....

The significance of Ms. Whitman's statements are as one court once put it: "When a major company executive speaks 'everybody listens' in the corporate hierarchy." Ezold v. Wolf Block Scherr & Solis Cohen, 983 F2d 509, 546 (3rd Cir. 1989). 

The complaint also alleges that HP managers were given personnel directives to do two things simultaneously: (1) specific numbers of employees to be permanently laid off; and (2) specific numbers of requisitions for new hires. This directive, the complaint alleges, would result in the following: "an upper-level manager would order the layoff of a designated number of experienced older employees and then also simultaneously authorize a similar number of new requisition orders calling for the hiring of 'college grads' or 'entry-level' employees to replace those whom HP just fired." This is a relatively straightforward out with the old, in with the new personnel policy.

In August 2013, according to the complaint, HP's human resources department issued guidelines requiring that 75% of all new hires be "graduate" or "early career" employees, a "graduate" being someone who was about to graduate or had graduated within the previous 12 months, while an "early career" hire was somebody who had just completed his or her degree and had worked not more than five years. The complaint cites numerous job postings stating such as "must have completed degree within the past 12 months" or "this position is for a recent university graduate."

Relative proportions are key to the case: No doubt there will be some evidence that HP has fired employees under the age of 40, and there will no doubt be evidence that it has hired employees over the age of 40. The complaint rest upon and alleges "a pattern and practice of discriminating against individuals age 40 and older by knowingly and intentionally firing a disproportionately large number of workers age 40 and older while simultaneously hiring a disproportionately large number of workers under the age of 40."

The complaint rests on a relatively typical amalgam of evidence: statements by a senior management person (in this instance, the senior management person) that reflect an intent to fire older employees, not necessarily based on skill but to achieve compliance with a pyramid model, personnel practices that disproportionately harm older employees while disproportionately benefitting younger employees and hiring practices that appear, at least on first blush, to strongly favor younger employees, although these surely will be countered by other job postings demanded substantial experience. Again, proportion is key here.