AARP Foundation Litigation attorneys and two private law firms in Minnesota (Bertelson Law Offices and Dorene Sarnoski Law Office) represented 63 older workers who lost their jobs at plants in California, Minnesota and other states. The case raised two key questions: (1) Were the RIF-ed workers targeted by age, and (2) were workers who were offered a special incentive retirement package (“SIRP”) to induce them to resign prior to the RIF misled. A federal court allowed the RIF-ed workers to proceed with their suit together in a “collective action,” but ordered the special incentive retirees to pursue their age bias claims individually. In early 2012, the parties reached agreement on a confidential settlement.
After James Peterson worked for Seagate for 27 years, the company terminated him in July 2004 as part of a reduction in force (RIF) that included several hundred workers in Seagate’s facilities nationwide. RIF-ed workers challenged the manner in which they were selected, noting the age of RIF-ed employees (a disproportionate number were over age 41), that older workers had to train younger replacements before they were RIF’d and that younger employees were hired shortly before and after the RIF.
A second group of plaintiffs, age 60 and over, received materials from Seagate proposing a “voluntary” early retirement (the “Special Incentive Retirement Plan” or “SIRP”). These former employees charged that their early retirement was not a matter of informed, free choice. Rather, they alleged, managers told them that if they did not accept the package, they would be terminated in the RIF. Workers also alleged that the early retirement offers were written in a manner that could not be understood by the average individual eligible to participate, misrepresented the number of employees selected for termination, and failed to disclose selection criteria and eligibility factors as required by the Older Workers Benefit Protection Act (OWBPA), which Congress enacted in 1990 as an amendment to the Age Discrimination in Employment Act of 1967 (ADEA).
Peterson filed a claim on behalf of all former Seagate workers terminated in 2004 in connection with both the RIF and the SIRP. The U.S. Equal Employment Opportunity Commission (EEOC), the federal agency charged with overseeing workplace civil rights compliance, found after investigation that there was reasonable cause to believe that age discrimination laws were violated. The case moved to court.
Seagate tried to have the case limited to a few individuals and to have it dismissed altogether. Seagate persuaded the court to treat RIF and SIRP employees differently, and to dismiss the RIF plaintiffs’ “disparate impact” claim (challenging certain age-neutral Seagate RIF policies as having an illegal discriminatory effects). But the court declined to dismiss the RIF plaintiffs’ intentional age bias claims. Following this mixed decision, the parties settled the case. While the terms of the agreement are confidential, the prior rulings by the court will help plaintiffs in other age discrimination cases.
What’s at Stake
The issues raised in the Seagate case are important to older workers, particularly in difficult economic times, because employer reductions in force, layoffs and/or large-scale terminations should not, and under the law may not, discriminate against workers by age.
Peterson v. Seagate US LLC was before federal district court in Minnesota.