Dive Brief:
- IBM must face a former worker’s charge that it discriminated against him for being a White male, a Michigan district court judge determined Wednesday (Dill v. International Business Machines Corp.).
- The former employee in IBM’s consulting division alleged that despite consistently positive reviews, the company suddenly placed him on a performance improvement plan in July 2023 and then terminated him in October. He contended the reasons used — that he was not bringing in work or meeting client demand — were a pretext to fire him in order to further IBM’s diversity goals.
- The pretext argument had merit, Judge Hala Jarbou determined, because the structure of IBM’s diversity program may have incentivized his managers to discriminate against White males, she said.
Dive Insight:
With DEI increasingly becoming a compliance issue for employers, the lawsuit against IBM shows how courts may consider certain kinds of programs to be potentially discriminatory. For example, Jarbou noted that IBM’s program went beyond a diversity aspiration or goal.
The plaintiff “allege[d] that IBM’s CEO set specific percentage targets for the racial and gender composition of IBM’s workforce and then IBM implemented a system of financial incentives to reward executives who worked to achieve those targets,” according to the lawsuit. “IBM’s CEO also suggested that executives who did not make progress could be penalized by being fired or having their pay reduced.”
While IBM argued that the incentive plan only applied to executive employees, Jarbou said the company’s corporate documents did not define “executive” and could potentially apply to 4,000 workers who fall within that designation.
Jarbou also noted that IBM’s reason for termination — having a “low-utilization rate” — was not unusual, with the same situation allegedly applying to more than half of employees in his division. In addition, the new expectations imposed on the worker in the performance improvement plan “were apparently unrealistic, as he could not control whether IBM signed a new client or whether one of its existing clients chose [him] as its consultant,” the judge said.
Even before the second Trump administration and the new target on DEI, attorneys have long warned that poorly structured diversity programs could put employers at risk for violating Title VII of the Civil Rights Act of 1964.
During a SHRM panel in June 2024, attorneys Jonathan Segal, Victoria Lipnic and Rae Vann discussed the types of legally questionable practices employers sometimes use. Quotas, set asides and preferences are all prohibited by Title VII, they said. They also highlighted a fourth problematic practice: tying management compensation to quantitative diversity goals.
The plaintiff in Dill v. IBM alleged that IBM tied executive compensation to DEI and set specific quotas, among other practices.
More recently, Segal explained how employers can re-evaluate their programs — and what other issues they should be aware of — in an op-ed for HR Dive.
IBM did not respond to a request for comment by press time.
