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Supreme Court Lets Stand Key IBM Legal Victories

The lawsuits, if they had been reinstated, could have cost the computing company a total of more than $1 billion in damages and penalties.
Silence was golden for IBM as the Supreme Court on Tuesday let stand without comment two lower court decisions dismissing lawsuits that could have cost the computing company a total of more than $1 billion in damages and penalties.

In one case, the justices declined to hear an appeal of a ruling by the 7th District Court of Appeals in Chicago that IBM's decision to convert its retirement benefit from a traditional plan to a cash-balance plan was not age discriminatory.

A former IBM employee, Kathi Cooper, led a class action suit alleging that the move penalized older workers because cash-balance plans allow younger employees to accrue balances over a longer period of time. IBM already had agreed to pay $1.4 billion to the plaintiffs if it lost the case.

An organization of former and current IBM employees responded to the court defeat by pledging a more aggressive push to unionize workers at the company. "We went all the way to the Supreme Court, and we lost our chance to argue age discrimination any further. We need a union contract. We need one now," said a statement posted Tuesday on a Web site maintained by [email protected]

In the second case, which the Supreme Court also let stand without comment, plaintiffs' attorneys were appealing a June 2006 ruling by the 10th Circuit Court of Appeals in Utah that IBM did not violate the Fair Labor Standards Act when it accepted an early retirement notice from former employee Michael Saville.

Saville sued IBM in August 2000, arguing that the company pressured him to resign after he complained about IBM's overtime policy. The Utah court ruled that Saville left IBM voluntarily.