After a seven-year legal battle, technology industry icon HP and its spinoff Hewlett Packard Enterprises have agreed to pay $18 million to settle a class-action lawsuit accusing them of purging older workers, according to a court filing.
The lawsuit went on so long that lead plaintiff Donna Forsyth, a manager laid off at age 62 after 17 years with the companies, did not survive to see its resolution, a court motion for the plaintiffs said.
Claims in the case date back to 2012, before the legendary Palo Alto electronics firm Hewlett-Packard in 2015 divided into HP for hardware, such as computers and printers, and Hewlett Packard Enterprise for business software and services.
Three years before the split, the company “began implementing a company-wide initiative to replace thousands of existing, older workers with new, younger employees,” the lawsuit claimed. Then-CEO Meg Whitman, the lawsuit alleged, “repeatedly admitted that her goal was to make the entire organization younger.”
The purported “workforce reduction plan” continued at least until 2020, the lawsuit in U.S. District Court in San Jose claimed. The settlement was revealed Thursday in a court filing.
Silicon Valley continues to operate under an employment model described in the lawsuit as a “labor pyramid,” with the bulk of workforces made up of young people, UC Davis computer science professor Norman Matloff said in an interview. “No university computer science program warns its students about this scary but true fact about the industry,” Matloff said.
The companies, Matloff believed, probably settled to avoid a trial that would have brought embarrassment and “a likely decision in favor of the plaintiffs.”
Hewlett Packard Enterprise declined to comment on industry practices or the settlement. HP did not respond to a request for comment.
Mountain View digital advertising giant Google in 2019 agreed to pay $11 million to settle a similar class-action lawsuit accusing it of failing to hire hundreds of older workers because of their age. The workers argued in the lawsuit filed in 2015 in U.S. District Court in San Jose that the company denied equal hiring, employment and compensation opportunities to people 40 and older as its workforce ballooned between 2007 and 2013. Google, in settling with 227 plaintiffs, denied committing age discrimination but agreed to train managers and workers on age-based bias, and set up a committee in its recruiting department to focus on age diversity in software engineering, systems-reliability engineering and systems engineering.
In the HP and Hewlett Packard Enterprise case, about 350 former and current workers are to share in the $18 million award. The group includes people terminated at 40 or older, allegedly under the “reduction plan,” between 2012 and 2022. On average, each will receive about $50,000, minus legal and administration fees and other costs, according to a court filing Thursday.
The agreement requires approval from the court. A hearing on that matter is expected to take place in late October.
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