Four leadership-level employees of Ford Motor Co. filed a class-action lawsuit, claiming that the Dearborn employees had been restructured out of their jobs just before becoming eligible for a jump in their retirement benefits.
An algorithm can discriminate too
According to the June 2019 lawsuit, an algorithm commissioned by Ford from a consulting firm made it more likely that older and higher-pension employees would be fired as part of the company’s “smart redesign.”
Had each of the four employees been allowed to work a relatively short time longer, they would have become eligible for increases in their retirement packages, in some cases meaning more than a doubling of the package’s value.
Firing employees for less than adequate performance is legal in many cases but letting them go due to their age or because doing so would limit the cost of their retirement packages is illegal.
Just in time to lower the company’s costs
One employee was let go about 10 months before the lump sum of her pension would have doubled to $1,144,000. She claims she even offered to stay with the company by taking a lower-paying job for which she was highly qualified. Her offer was rejected, she says, and she was told, “Your performance was not considered.”
The four employees joining the suit say that an exceptional retirement plan, which employees called the “golden handcuffs,” was a deliberate strategy with a business function. It was designed and intended to keep them at the company instead of leaving to pursue other opportunities. They stayed for nearly 30 years with the expectation that the transaction would be completed.
Company denies targeting older workers
The company denies any discrimination and vowed to fight the suit vigorously. Ford has been cutting costs dramatically, including eliminating 12,000 positions in Europe, six European plants, and 7,000 white-collar jobs worldwide.