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Highlights—July 16, 2005
- Washington Post: Lobbyists and
The Law. By Marie Cocco. Full excerpt: In May, IBM employees
who've so far convinced the federal courts that their company's pension cutbacks illegally discriminate
against older workers struck a settlement deal under which the technology giant could pay out as
much as $1.7 billion.
In June, a House committee decided it would settle the long-running argument
over converting traditional pensions into less generous cash-balance plans differently: With the
stroke of a pen, the committee changed the definition of age discrimination.
And it put corporations on notice -- even those still facing challenges
in court -- that if they acted quickly to conform to the "new" discrimination rules, damages
against them could be capped. With friends in Congress, who needs to worry about losing a lawsuit?
Rep. John Boehner, R-Ohio, chairman of the House Committee on Education
and the Workforce, calls cash-balance plans "the future of the defined-benefit system." He
derides the lawsuits brought by middle-aged and older workers who've lost billions in promised
pension benefits because their companies converted to cash-balance systems. The suits, he says,
are creating too much uncertainty and "jeopardizing generous pension benefits for workers
across the country."
Certainly the lawsuits jeopardize one of corporate America's sharpest tools
for cutting its financial promises to longtime workers.
Under traditional defined-benefit pensions, a worker's benefit is based
on years of service and a financial formula that gives greater weight to pay earned during
an employee's final years of service. Under cash-balance plans, longevity isn't a factor and
pension accruals are spread out evenly over the years. The effect of converting to "cash balance"
plans on workers in their 40s and 50s is often severe. They lose the pension they'd been promised.
Yet unlike their younger co-workers, they do not have enough years left to work to make up
for their loss under the new system. The difference in the way older employees and younger
workers are treated in the conversions is the basis for the age discrimination suits.
Employers knew that the law governing pension plans has clear rules concerning
the treatment of older workers, says Eva Cantarella, a Michigan pension-law specialist who
has represented employees in cash-balance cases. They went ahead anyway. "Now they're saying
'help, come save our fannies,'" she says.
Boehner to the rescue. He tucked language into a larger pension-reform
bill that would, in essence, legalize future cash-balance plans by changing the rules on what
constitutes age discrimination. The measure has not come before the full House for a vote.
But if Boehner's legislation does pass, companies still tied up in court because of past conversions
could have their damages capped. Even if workers won they would somehow lose. "It indirectly
sanctions conduct that was previously considered illegal," says Cantarella.
Under this new and supposedly improved system, older workers who started
out covered by a traditional plan couldn't fight back. "Legal harassment of these retirement
plans needs to stop," Boehner says.
Just who's being harassed?
By and large, companies that converted their pensions weren't fretting
over the health of their traditional pension funds. They were figuring out how to boost the corporate
Documents that surfaced in the IBM suit show that executives there considered
the conversion a cost-cutting measure that would save $2 billion over a decade. But they simultaneously
worried about how the pension reductions would affect upper management. They plotted more generous
401(k)s and creation of a supplemental pension system for executives. The rich are (still) different
from you and me.
And different, too, in the audacity of the swagger they display on Capitol
Hill. Months ago, after hundreds of middle-class workers who had been affected by cash-balance
changes swarmed Congress demanding action to end what they consider the theft of their pensions,
a proposed Bush administration regulation that would have made the conversions legal was blocked.
Negotiations over administration-backed legislation didn't get far.
But there is nothing that focuses the lobbyist mind like a proposed $1.7
billion settlement. It could, after all, signal to all the other judges hearing all the other lawsuits
that people have indeed been wronged. Reparations, it would seem, might be in order.
Desiring to escape such a demand for accountability, business lobbyists
turned to those who know best how to avoid being called to account. If the facts and the law aren't
on their side, they can always find a lawmaker who is.
|Action Alert from Janet Krueger: Several of you have asked for an easier way to tell
how outrageous it is that they would consider legalizing cash
balance conversions by companies like IBM.
My friend, Janice Winston, one of the retirees pictured in the
article on pension theft in the last AARP bulletin, has just<
sponsored an on-line petition at:
We've checked out the site to ensure it fully protects privacy, but
also provides us with a list of names we can take to Washington.
One problem with the survey site is that it does NOT ask you for
your address. Because people in Washington listen hardest to their
own constituents, please either put your state and congressional
district in the comment field, or print off the petition after you
have signed it and send a copy to your Representative and Senators
with a note saying they should NOT legalize cash balance plans --
they need to be increasing the protections on pensions, NOT reducing
or eliminating them!
I, Janice Winston, the author of this petition do hereby ask that
all Americans who are concerned about the status of pension plans in
the America electronically sign this petition to stop Congress from
passing language in HR2830 relating to Cash Balance Plans.
We the undersigned, who cannot leave our homes to visit your offices
in person, need protection against the corporate lobbyists who roam
the halls of Congress preying on our inability to protect ourselves
and your willingness to go along with the lobbyists' sinister plans
to deny us our hard earned pension benefit.
It is simply immoral that companies can make promises that lure
employees to spend a career working for a specific pension benefit,
only to be told near the end of their career that the company is
taking advantage of loopholes in the laws to escape pension
It is without conscience or consequence that corporations are
significantly reducing pensions over 50% or canceling pension
benefits employees worked many years to earn.
Employees and their families expect Congress to protect the
reasonable retirement expectations of older workers.
- Congress must NOT support broken promises by corporations
- Congress must protect employees and remember that workers are the
constituents, not big business
- Congress must understand that retirement certainty must be
- Congress must understand that Cash Balance Plans are harmful to
- Congress must protect early retirement subsidies
- Congress must protect employees from the predatory practices of
Cash Balance Plan "wearaway" and "conversion"
We, the undersigned, are asking Congress NOT to pass any pension
legislation that supports pension wearaway, age discriminatory
practices, or pension conversions that harm older workers.
We, the undersigned, are asking Congress to reject all language
relating to Cash Balance Plans in HR2830 and stop passage of any
legislation that specifically relates to Cash Balance Plans until
all possible protections are included for older workers.
We, the undersigned, are asking Congress to appoint an independent
Advocate to protect and ensure the rights of employees and retirees.
- Yahoo! message board post by Janet Krueger: Alert
for Rochester, Minnesota people re: the Boehner bill. Full excerpt: Representative Sanders is proposing an amendment to the Boehner
that would neutralize some of the more egregious aspects of it. It is
my understanding that Representative Gutknecht has indicated that he
will decide whether to co-sponsor Representative Sanders' amendment to
protect workers against cash balance plans by Tuesday noon.
Obviously, having him on board as a co-sponsor would be very helpful.
PLEASE call Rep. Gutknecht's office Monday and Tuesday morning!!! The
staff person to call is Eric Keber (Tel. 202-225-2472). Tell him you
appreciate Rep. Gutknecht's past efforts to protect workers from age
discrimination due to conversions to cash balance plans and hope that
he will join Rep. Sanders and others in sponsoring another amendment
this year to continue that protection.
For background, the hope is that if we can get enough bi-partisan
support for the Sanders amendment it will make it more difficult for
Boehner to get his cash balance legislation passed. Thanks!
- Committee on Education and the Workforce, Democratic Staff: Democrats
Protest Insufficient Information on Effects of Pension Legislation.
Committee Republicans Reject Series of Democratic Amendments that Sought to Protect Workers, Retirees,
and Taxpayers. Excerpts: However, Miller also said that based on what is known about the bill, it clearly
contains numerous flaws, which Democrats sought to address through a series of amendments that
were ultimately rejected by Republicans. For example, Democratic amendments sought to:
- Prevent companies – like United Airlines – from dumping their employee pension
plans onto the federal government without first exhausting all other alternatives;
- Bring fairness to the private pension system by linking the fate of executives’ pension
benefits to that of rank-and-file workers’ pension benefits. United Airlines CEO Glenn
Tilton, for example, has held on to his own $4.5 million retirement nest egg even as he has
moved to terminate the pension plans of over 120,000 United workers and retirees;
- Address unfair benefit restrictions on workers imposed by the bill;
- Protect older workers against discrimination and benefit cuts in cash balance conversions;
Prevent conflicts of interest in the investment advice that workers receive.
“Republicans chose to oppose our common-sense measures that would help prevent a future
United Airlines, create some equity between executives’ pensions and workers’ pensions,
and protect workers and taxpayers,” said Miller. “As a result, this bill does nothing
to prevent a future United Airlines.”
- Committee on Education and the Workforce, Democratic Staff: Representative
Miller Says PBGC Withheld Information on Pension Legislation Passed by House Committee Last
Committee Republicans Approved Major Legislation Despite Having No Information on Its Practical Effects.
Excerpts: The Pension Benefit Guaranty Corporation admitted last week – roughly one hour after
the House Education and the Workforce Committee approved legislation that makes dramatic changes
to the nation’s private pension system – that it has performed no analysis on the practical
effects of that legislation on the pension system in general or the PBGC’s finances in particular.
Miller also renewed his criticism of Republican leaders who introduced
the legislation on June 9 and rushed it through the committee without knowing what its real-world
impact would be.
“The 27 Republicans on our committee voted for a bill that will have serious implications
for the lives of 44 million Americans who rely on a defined benefit plan for their retirement,
and they did so despite having no information on what those implications are,” said Miller. “The
PBGC had an obligation to ask Congress for more time to do an analysis of the bill, but it
was silent until one hour after the bill passed. This is just like the Medicare prescription
drug bill fiasco, when Congress acted hastily on major legislation even though it lacked basic
information about the bill’s costs.”
message board post by Janet Krueger. Excerpt: The bill could potentially
expose those who have already retired,
depending on the final wording... One of the questions being discussed
in the back halls of congress is the question of why the PBGC has to
step in and take over a plan that is in a trouble before early
retirement subsidies can be taken away from those who have already left,
but whose subsidies are no longer 'affordable' or leave the company
'non-competitive'. Wouldn't it reduce the possibility of Congress
needing to step in and bail out the PBGC if they made it possible for
companies to 'restructure' their plans to match funded levels without a
THINK about it. As long as we continue to allow Congress to hold
hearings on pensions with only nominal input from employee groups, the
limited protections we have are exposed... Anybody thinking they don't
have to be screaming is kidding themselves! Just remember that the
screams have to be directed to Congress or they won't have any impact.
- In a Yahoo!
message board post, Janet Krueger responds to this comment: I
believe ERISA requires 45 days notice to participants of any changes in plan (or is it 15?).
In your case, you will have plenty of time to retire. You have reached safe harbor. Unless future
bills wipe out ERISA. Full excerpt: I don't think you fully understand what is happening
ERISA is NOT inviolate or unchangeable.
H.R.2830 is a bill to change, and substantially weaken,
ERISA. Unless you let your people in Washington know
that their jobs are in jeopardy (ie they could lose
your vote in the next election) if they reduce the
level of pension protection currently in ERISA, that
'safe harbor' you are relying on could become
extremely stormy. Key concepts to communicate to your representatives in
- Pension promises are important -- protections in
ERISA need to be strengthened, not weakened.
- Cash balance plans are nothing more than a scam to
take benefits away from longer term (ie older)
employees. They do NOT need to be legalized.
- Promised early retirement subsidies are important
and need just as much protection as the vested age-65
annuity, especially for people who already retired and
are collecting checks.
- It is currently very difficult for people relying
on pension plans to understand exactly what is being
promised and then force their employer to deliver --
anything that could be done in ERISA to force better,
clearer disclosure of pension information, both for
individuals and for the plan as a whole, would be a
- Pension promises become even more confusing when
a division is sold or acquired. Companies should be
forced to communicate to employees in writing at the
time of the transfer exactly what is happening to
their pension promises, their share of the pension
fund, their years of service, etc. These employees
often get a rude awakening several years later when
they get laid off, but by then it is too late to ask
Congress to intervene in a sale that allowed
executives to illicitly grab pension assets.
- Senator Harkin's proposal for a pension ombudsman
in Washington that would act as an advocate and
intervener for employees and retirees would also be a
good thing -- why isn't it getting more backing?
- Health care coverage is also critical. Why doesn't
ERISA protect retiree health care promises, force
companies making these promises to fund them in advance,
and attach some level of vesting to them? (See
http://www.nrln.org/ for a proposal to do just that!)
These are just some suggestions... Maybe what we need
to build is a pensioner's bill of rights!
message board post by "west_coast_retired_guy". Excerpts: In a few years
you'll have younger employees telling you how lucky
you are to have FHA since they'll have no medical coverage to look
forward to after leaving IBM. It's all relative.
But at least new employees should now understand that they get only
what IBM compensates them now and there are no promises for the
future. We early retirees spent our careers getting less than
industry standard compensation and were satisfied with it in the
belief that our "total compensation" included lifetime free medical
care and retirement income with cost of living adjustments. IBM
constantly sent material to employees indicating how they had
incrementally improved benefits for retirees and had passed cost of
living adjustment to them. But those things went away after I'd been
there 30 years and was retired; that is, the Gerstner years.
To get a feeling how good the old medical plan used to be for
retirement, consider the following. Prior to my leaving in 1991,
retirees were getting the current employee plan for life at no cost.
IBM paid 80% of the copayment you had to make after your new employer
(or medicare) paid the initial typical 80%. Effectively, you only
paid 4%. And the drug plan had a maximum $10 copay. It was clearly
something worth sticking around for, even if one had job offers for a
lot more outside of the company.
- Workforce Management: IBM
Optimizes Its Workforce to Address New Business Goals.
By David Creelman. Excerpts: In order to accomplish its new goals, the company invests heavily
in tools for deploying people. Among the executives pushing these systems forward is Garrett
Walker, director of the global resource project office, HR strategy, in Armonk, New York. His
responsibilities include workforce optimization, an HR process essential for IBM’s on-demand
IBM’s new business strategy relies on considerably more cross-IBM
collaboration than ever before. This in turn requires more and better workforce management
systems. We need to be able to assemble workforce capabilities to meet client needs wherever
they may be in the world, and we need to be able to do it quickly.
The challenge in doing this is that 49 percent of our workforce has less than five years’ experience
with the firm, and more than one-third of our workforce does not work out of a traditional
IBM building, but are considered mobile workers.
- Wall Street Journal: IBM
Tool Deploys Employees Efficiently --- Program Aims to Find People With the Right Skills, Pay
Level and Location for the Job. By Charles Forelle. Excerpts:
Inside its giant services arm, International Business Machines has begun an ambitious project
to catalog employees and sort them into a finely woven glossary of technical skills. The project's
most visible facet is Professional Marketplace, a pilot program launched this year, through which
about 6,000 IBM consultants have access to the database of IBM employees, about 22,000 so far,
who are available to work on the jobs they have landed. [...]
The theory of the new IBM project is that personnel, like parts, can be
optimally deployed. If a customer in Rochester, Minn., needs a team of software technicians
to install a new application, no need to fly in people from Texas if there is a group in Minneapolis
that is available to do the job. Likewise, better to use a $10-an-hour employee in India for
a routine task, rather than an expensive programmer in Dallas, for example, who costs several
times as much.
The system also can maximize the amount of time an employee is billing hours to a customer --
and hence bringing in revenue -- and minimize the days and hours that employees sit around
collecting a paycheck while waiting for an assignment.
Using Marketplace, IBM consultants working for customers can search through 100 job classifications
and 10,000 skills, figuring out who inside IBM is available, where they are located and roughly
how much it costs the company to use them.
"If they can find a way to use a lower-cost resource of the same skill to deliver the same
thing to the customer, they've hit it on profitability," says Bob Moffat, a senior vice
president in charge of IBM's supply chain.
By making it easy for consultants in the U.S. to pick and choose workers from around the world,
Marketplace is helping lubricate the flow of technical jobs to lower-cost locales. While
cutting back in Western Europe, IBM is hiring in such places as India, Brazil and Eastern Europe.
- New York Times: A
Passage From India. By Suketa Mehta. Excerpts: According to a confidential
memorandum, I.B.M. is cutting 13,000 jobs in the United States and in Europe and creating 14,000
jobs in India. From 2000 to 2015, an estimated three million American jobs will have been outsourced;
one in 10 technology jobs will leave these shores by the end of this year. Stories like these
have aroused a primal fear in the Western public: that they might soon need to line up outside
the Indian Embassy for work visas and their children will have to learn Hindi.
- Goodkind Labaton Rudoff & Sucharow LLP Press Release: Shareholders
Seek to Recover Damages from IBM for Stock Purchases Between April 5, 2005 and April 15, 2005. Excerpts: The complaint
alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants failed
to disclose, despite having a duty to do so, that:
- At the time of its analyst conference call on April 5, 2005, which was purportedly to discuss
the impact of expensing options under SFAS 123R, the Company was experiencing significant operational
issues in multiple areas of its business. In particular, the Company had been unable to close
significant transactions late in the first quarter, it was experiencing elongated sales cycles,
and was having product-transition problems in its hardware segment.
- The Company intentionally accelerated the adoption of SFAS 123R, despite having an additional
two quarters to implement it, in order to sufficiently lower analyst expectations so that when
it later disclosed the operational issues and reported earnings from continuing operations of
$0.85 per share for the first quarter 2005, it would have the effect of cushioning the blow of
the significant earnings miss.
- The Company intentionally misrepresented the impact from expensing options, indicating an earnings
impact of $0.14 per share on April 5, 2005 (versus the actual impact of $0.10 per share reported
on April 14, 2005), in order to disguise a significant and material operating miss.
- New York Times: Few
Wealthy Farmers Owe Estate Taxes, Report Says. By David Cay Johnston. Excerpts:
The number of farms on which estate tax is owed when the owners die has fallen by 82 percent
since 2000, to just 300 farms, as Congress has more than doubled the threshold at which the tax
applies, the Congressional Budget Office said in a report released last week. All but 27 farmers
left enough liquid assets to pay taxes owed, the budget office found, although it hinted that
the actual number might be zero. The study examined how much in cash, stocks and bonds these
farmers left to pay estate taxes, but the report noted that no data existed on how much life
insurance the farmers had put into trusts. Virtually all wealthy farmers own life insurance in
trusts, say estate tax lawyers who specialize in working with farmers. [...]
The estate tax raised an estimated $23.4 billion last year. Repeal would
shift part of the burden of taxes off the fortunes left by the richest 1 percent of Americans,
some of whose fortunes were never taxed, onto the general population. The lost revenue could
be made up in three ways: through higher income taxes; reduced government services; or more borrowing,
which would pass the burden of current government spending to future generations.
Neil E. Harl, an economics professor at Iowa State University whose expertise
in estate tax planning for farmers has made him a household name in the grain belt, said many
Americans had a false impression that the estate tax was destroying family farming.
He said the Congressional study "adds to the weight of the evidence that this is a myth
that has been well spun."
"Farms, in particular," Mr. Harl said, "are not in jeopardy because of estate
Michael J. Graetz, a professor at Yale Law School who was a tax policy official in the administration
of President George Bush, said repeal was primarily a benefit to people with large estates
held in stocks and other securities, not to farmers.
- New York Times: Using
Farmers as Bait. Excerpts: In the arguments about taxes
on inheritance, no one tugs at the national heartstrings more urgently than the family farmer.
Anti-tax forces and big family businesses like to conjure up a field of dreams' turning into
condos - a young family inherits their birthright and then has to sell it to pay the taxes. That
all-American nightmare turns out to be mostly myth. If Congress and the White House repeal the
estate taxes for the very rich, family farmers largely won't benefit, and some may actually owe
more tax. Meanwhile, the deficit will grow by almost $70 billion a year, and the rest of us will
have to make up the difference. [...]
The tax on estates now exempts the first $1.5 million in assets, and even
more for most farms. Last year that tax raised an estimated $23.4 billion. That's a lot of
armor for the troops in Iraq. That's a lot of teachers to reduce class sizes in urban schools.
That's a lot of extra security for chemical plants or ports or subways.
If the president and the Republican majority in Congress wipe out the estate tax altogether,
that money will go instead to a lot of extremely wealthy people.If Congress does that, it
may force farms and small business to pay even larger tax bills. John Buckley, the chief tax lawyer
for the Democrats at the House Ways and Means Committee, wrote in Tax Notes magazine that these family-farm
and business estates might have to pay substantial capital gains taxes instead on properties that might
have been purchased many decades ago.
- Washington Post: Business
Pushes Its Own Brand Of Justice. Tough Lobbying For Court Seat. By Jeffrey H. Birnbaum and Thomas B. Edsall. Excerpts: Setting
up a potential clash with religious conservatives, the national business lobby for the first
time is marshaling its forces to persuade the White House to pick an industry-friendly Supreme
Usually, corporations duck Supreme Court fights. This time, with vital interests at stake,
business advocates are raising millions of dollars, plotting major lobbying campaigns, and
quietly working to influence the president as he ponders a replacement for Justice Sandra Day
Companies believe that they have to get involved because a large portion
of the Supreme Court's docket is filled not with social issues such as abortion rights and affirmative
action but with issues that they care about deeply such as pensions and federal preemption of state
laws that companies tend to prefer. About 40 percent of the cases considered by the Supreme Court
in the past two years have involved business-related matters, the chamber said.
- Yahoo! message board: "IBM
Executives Pensions and Health Plan" by "aignog".
Excerpt: Last week I met the wife of a retired IBM executive and she was
telling me how great IBM benefits are. She married him about three
years ago. He recently had a heart attack, stroke and 5-way
bypass--and has been in hospital for weeks. According to her IBM is
paying all. She said she will get 80% of his retirement when he dies.
Looks like I should have married a retired IBM executive. I don't
fault her for getting benefits, but I worked for 30 years and got
about 28% of my final salary.
- Computerworld: IBM
posts funeral notice for OS/2. By Stacy Cowley. Excerpts:
IBM is measuring OS/2 for its coffin. The company reaffirmed its intent to soon end support for
the storied operating system, releasing an official road map for the software's demise.
|Vault Message Board Posts
- "Yup" by "Blue_or_Not_Blue". Full excerpt: This board does have a lot of disgruntled IBMers.
I have been with IBM for a couple of years. I joined IBM BCS from another Big Five consulting
firm. Here is what I see going on:
- A Lot of Bad Projects. This is due to a couple of different issues. Partners sell work at
an extremely discounted rate just to meet the Qtr goals. The typical thing you see
at every Public Company. The other reason is the pressure to include off-shore rates in projects
while we aren't completely ready with the offshore model. We still work like 2 different companies
between IGSI and IBM BCS US. The worse a project gets financially the more the project
team gets squeezed!
- Lack of raises & bonuses - discussed numerous times on this board
- Short Sighted Leadership - Things like "No Supply Orders in Q2", "No Training
- Osmosis Effect. The Legacy PWC folks are upset the new hires who work with them hear about
the good times and how it sucks now.
The bottom line is there are a lot of disgruntled folks at IBM. I have worked with a few
IBMers in the last couple of years and the percentage of disgruntled employees is HIGH!
Off - be careful" by "goldengoose2". Full excerpt: Be advised that you
may be told many untruths as you depart. Get any important communication in writing.
I looked for a position internally for a month as requested. Took another position and
worked it for over a week, before being told that HR did not approve the transfer and would
not approve any transfer.
Also I was told that I would receive six months medical coverage, after I was laid off
I found out that my benefits were not bridged and that it was only three months medical
coverage.. etc. etc.
Be careful and verify in writing everything that is communicated to you.
Do not be thrown off track, start today to find a new direction.
My advise I learned the hard way is to not try to hang on and don't look back except to
sell the skills/experience you have acquired while you are there. Also make sure you take
advantage of everything they offer, they will not remind you that it is up to you to pursue
it. The severance document states that you will be contacted (e.g. outplacement), do not
wait on anything because I can testify they do not call. You need to pursue it ASAP.
Cost" by "Dose of reality". Full excerpt: I can't think of a single
business model where a pure low cost play can work without considering the dimension of
product quality. This is even true of Walmart. If you want an extreme example, think parachutes!
Even relatively uneducated consumers will evaluate the quality of their purchase before and
after the decision.
Now we are in an industry where we are selling services that are expected to bring a significant
business benefit, beyond that which could be produced by the client's internal capabilities.
If we have costs in the lower quartile, we are dead. This is even true for "commodity" services.
We could round up anyone willing to work for 50K per year and cream
the competition on cost. We would be out of business within a year. This business can never
be about low cost – it has to be driven by “right cost”. That means not only
paying the right baseline and staying away from the compensation cellar, but “paying for
performance” to give employees a vested interest in delivery and sales success. We are
failing on both counts. We are playing a long term game of bait and switch, and we are running
out of clients who can be fooled.
on the Alliance@IBM Site:
- Alliance@IBM: Attention IBM employees: IBM
is blocking e-mail to and from the Alliance@IBM e-mail address firstname.lastname@example.org from
inside the company. Please send your job cut information and other correspondence from
your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax
607 658 9283.
- IBM Pension
Lawsuit FAQ about Cooper v IBM,
Updated 6-21-05. Excerpt: Below is a list of frequently asked questions about the class
action lawsuit against IBM's 1995 and 1999 pension plans. The answers are my personal
opinions, have not been verified with either IBM or plaintiffs’ counsel, and
should not be construed as legal advice.
On July 31, 2003, a federal district court judge ruled in favor of the employees in
this case. IBM will appeal portions of the ruling.
On September 28, 2004, IBM and the legal team on Cooper v IBM announced that an agreement
had been negotiated that settles some of the claims and set the amount of damages that
IBM will pay to the class if IBM's appeal of the district court's age discrimination
rulings is unsuccessful.
Click on any question to jump to the answer. Or scroll down and read them all.
Action Tool Kit. Along with the CWA
Job Survival Kit, here are
some resources you can use
when challenging or questioning a company policy, procedure or practice.
- Reduction in Workforce actions (RIF)...
- Escalations, Appeals and Skip level meetings...
- Implied contracts vs. Employees at Will...
- In General...
- Communications Workers of America (CWA): Family
and Medical Leave Act Joins GOP Hit List. Excerpts: After attacking overtime, Social Security and an array of
workers' rights, the Bush administration has now moved the Family and Medical Leave Act
near the top of its hit list.
The White House and its GOP allies in Congress want to water down, if not undo entirely,
the law pushed and signed by President Bill Clinton that has allowed more than 50 million
people since 1993 to take unpaid leave to deal with their own or a family member's
serious illness or care for a newborn or newly adopted children.
Cuts Status & Comments
Page. Excerpts: Job cuts are coming. Information needed:
What is Your location?
How many job cuts at your location?
What locations are cutting jobs?
Name of Division and Business Unit?
Some sample submissions follow:
- Comment 07/07/05: Typically when a company employs an axeman, like Gerstner,
he does his dirty work then is quickly let go to show the employees and investors
that the problems have been identified and rectified. A new executive takes over, provides
a vision and moves the company on. That the axemen are still around after 13 years tells
me that the company has not identified the problems, has no direction and can't move on.
- Comment 07/08/05: Just to let you know, ibm.com (under Stephen J. Zakur)
is letting go of a large number of contractors and a few full-time employees and
moving those jobs to Sao Paulo, Brazil. -Anonymous-
- Comment 07/11/05: I can't believe this. After 3 (count em 3) Resource
Actions in as many months in AMS, I've just been sent a request to fill out an Employee
Satisfaction Survey. In reading the first paragraph, I read, 'We want you to be
completely open and honest when sharing your thoughts about your job at IBM and
highlight what's working and what needs changing. Your participation and feedback
in this survey are extremely important and will be used to better understand and
address employee satisfaction issues.' I figure I have two choices:
1) I can be totally 'open and honest' AS THEY REQUEST and possibly lose my job.
2) I can lie and say I'm sooo happy and keep my job. -Anonymous-
- Comment 07/11/05: Cuts need to come from the top, NOT the workers
who built IBM. Time for a new CEO...Sam you're a disgrace to all!
- Comment 07/11/05: IBM is big, powerful and very arrogant. It needs
to get some lessons from GM and Ford. It is only a matter of time... its demise
has been written. It keeps on letting good people go while keeping only those who
are close to management. Layoff decisions are subjective and not objective. Three
years ago IBM acquired PWC with 15K new employees. It laid off 18K people then.
Every 2 to 3 years IBM will layoff until some one with the right vision comes along.
This management is not visionary nor does it have any clue where the technology
is heading and how to compete globally. Gerstner was nothing but an MBA thief from
Harvard who engineered profit by raising interest rates from 8.5 to 11.5 on $77B
pension fund so he and his management team could get bonuses. That is not leadership.
- Comment 07/11/05: I calculated about 64% of the employees selected
in our org were over 45 years. Of the employees they DID NOT select that were over
45 or so, I wonder how many do you think already had enough years to fully retire?
IBM would not have much to lose keeping those people on board. And also, what %
of those people were managers? While I'm sure there were some with enough years
to fully retire selected, but it would be interesting to know just the same. -Anonymous-
- Comment 07/11/05: I just want to know,,Is it LEGAL? to Lay you
off, and as your manager gives you your severance check,, asks if you want to come
back to work for him?......(as a Supplemental) For way LESS than you were making!!!!
I have a wife and family to feed,and bills to pay I had no choice but to take the
offer. If they see they can get away with that, what will prevent them from doing
the same thing to more people? Should I consider myself lucky, at least now I will
still get paid something, while I'm looking for a Real Job. -Anonymous-
- Comment 07/11/05: I lost my job June 8 2005, along with 400 other,
Canadian IBMers. -Anonymous-
- Comment 07/12/05: In the couple of months leading up to the last
mass layoffs, about $21 million in stock was sold by our execs at the low price
the stock has been at lately. Did they suspect that the layoffs were not going to
improve the market's view of the company? Looks like investors are tired of our
one trick ponies. -Anonymous-
- Comment 07/12/05: Critical Request: Any employees who has taken
a personal Leave of Absence, Educational Leave, pregnancy leave and you were fired
or demoted when you returned from leave, I would like to hear your story.
Especially in the RTP area, The Editors at the Alliance will forward your
name, number or email address to me, so I can make contact. Please send a note to
- Comment 07/13/05: There is an IBM communication strategy to sell
the prospect of out-sourcing to US employees. Included in this strategy was an attempt
to get current US employees not only to buy into out-sourcing, but to also (unwittingly)
train their overseas counterparts to take over their jobs. -Anonymous-
- Comment 07/16/05: I'm a former first line manager in IBM R&D
Canada. I left my management role at the first opportunity because of what I considered
to be unethical employment practices. In the round of "resource actions" I
was involved with in late 2004, I was asked to identify bottom performers, tell
those employees that their performance was unacceptable, and give them 30 to 60
days to improve performance or be terminated. Unfortunately, once you reach this
point, it is extremely unlikely that you can save your job, regardless of how hard
you work. Termination is all but inevitable.
The 30-60 day period is simply to cover IBM's butt from a legal
perspective. In many cases, targeted employees are not terrible performers - IBM just prefers
to reduce staff for "performance" reasons rather than through legitimate lay-offs
because it is less expensive and doesn't look so bad in the press. IBM's typical response
to challenges is "performance is relative" .. "what you did last year is
not necessarily competitive this year" .. "you have to keep improving every year".
The dishonesty in this practice was appalling. HR was not and is
not an advocate for employees or first line managers in cases such as this. HR's
role is to make sure staff reduction targets are met and to avoid litigation. Employees
who find themselves in this situation will find no friends at any level in IBM. Get yourself
a lawyer. At least, the threat of litigation might get you a severance package.
- Comment 07/16/05: The last wave of the Resource Action affecting
S&D just ended (30 days from 6/16/2005). The next phase is expected to be announced
by Wednesday, 7/20/2005. Keep your eyes and ears open and be ready, as it may not
be nice. -Anonymous-