Dell Denies Discrimination In Layoffs

The plaintiffs claim that Dell engineered layoffs of more than 8,000 employees, singling out women and employees over 40.

Antone Gonsalves, Contributor

November 3, 2008

3 Min Read

Dell, which has been undergoing a nearly two-year reorganization, denied Monday allegations that massive layoffs at the computer maker have unfairly targeted women and employees over 40.

The allegations stem from a class-action lawsuit filed Oct 29 in U.S. District Court in San Francisco by four women, all former senior employees in Dell's human resources department. In addition to discrimination in layoffs, the plaintiffs claim Dell systemically discriminates in blocking women across the company from entering the top ranks.

The suit seeks to change Dell's "discriminatory policies regarding pay, job placement, promotion, and termination," according to a statement released by the women's lawyers. In addition, the plaintiffs are seeking $500 million in damages for "a class of thousands of current and former Dell female managers and executives and older employees disproportionately affected by the company's mass layoffs in 2007 and 2008."

Dell on Monday denied the allegations.

"We believe the claims in the suit are without merit," a Dell spokesman told InformationWeek. "Dell does not tolerate discrimination in any aspect of employment and will vigorously defend any claim that we are not acting in accordance with the law or our policies."

The plaintiffs claim that Dell engineered layoffs of more than 8,000 employees, singling out women and older employees. As a result, Dell's upper-management ranks have swelled to about 80% male. One of the plaintiffs, Bethany Riches, a former senior HR manager, claims here supervisor, VP Michael Summers, described the top ranks as "one of the toughest old-boy networks in Dell" and later told Riches she had no prospects of advancement in the company.

"Ms. Riches and the other women routinely held the same positions and handled the same responsibilities as higher-ranking and better-compensated male executives, yet were repeatedly denied promotions promised to them by Dell," the lawyers said.

Another plaintiff, former senior HR manager Mildred "Jan" Chapman, claimed that even though her job carried responsibilities equal to or exceeding those of younger male HR directors, she was repeatedly denied a promotion to director or any pay increase. Chapman, 59, was laid off in April.

The suit claims each of the plaintiffs lost more than $1 million in projected salary increases, promotion grants, and short- and long-term incentive awards.

The suit alleges that chief executive Michael Dell, along with others on the 14-member executive leadership team and other senior male executives, carried out or assisted in the discriminatory acts described in the complaint. The plaintiffs are being represented by the law firm Sanford Wittels & Heisler, which has offices in San Francisco; Washington, D.C.; and New York.

Dell's ongoing reorganization began early last year with the return of founder Dell to the chief executive post. During his three-year absence, the company suffered a decline that led to its losing its status as the world's largest PC maker to Hewlett-Packard. The massive changes in the company have included a reduction in its workforce by 8,900 employees. Founder Dell has promised Wall Street that he will cut at least $3 billion in spending by the end of the fiscal year 2011.

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