Those suing are mostly middle- level managers who are not protected by union contracts but have sufficient funds to bring a case. Their number is small compared with the blue-collar lay-offs, but their actions are having an effect.
Looking after the victims of the lay-off and buy-out binge has itself become big business. To meet the demand for lawsuits, a whole new breed of age discrimination lawyers has emerged. Faced with demoralised workers, companies now have psychologists and therapists who tend not only those who lose their jobs but also those who keep them. These experts have identified a troublesome 'survivor syndrome' in the workers still employed. Recent studies show they have become the walking wounded of the workplace. They are overworked, distrustful of their employers, and so insecure about their future that they do not perform well. They are prone to panic attacks, high blood pressure and marital strife.
In one survey of 531 companies, only 46 per cent saw profits rise within two years, and only 34 per cent attained higher productivity. While lay-offs reduce costs, those workers who survive are less productive because morale is lower. The experts who track the data tell the story of a bank which hired a corporate 'turnaround expert' who was nicknamed 'gunslinger' and started firing people without understanding what functions they performed. The company suffered, and he became known as 'No Toes' for shooting himself in the foot.
Just to recap on what has happened in the American workplace: 2 million jobs were eliminated in the Eighties, 1 million of them in middle management. Half of the top 500 companies listed by Fortune magazine in 1980 were missing from the 1990 list. The trend continues. More than 85 per cent of the Fortune 1,000 companies 'down-sized' their white-collar workforces between 1987 and 1991. About a million American managers with salaries exceeding dollars 40,000 lost their jobs in 1990. There were 20 per cent more lay- offs in the first half of last year than in the first nine months of 1991, at the height of the recession.
In the aftermath of this bloodletting, pictures of out-of-work executives bonding together in their front parlours keep appearing. The New York Times recently showed three IBM executives and their wives holding hands and praying over hot spiced apple juice. 'When I can define myself as a child of God, I feel OK. When I define myself as unemployed, then I don't feel so good about myself,' one of the men said.
They are apparently doing better than some of their colleagues who are succumbing to drink, despair and violence. An increasing number of employees in 'down- sized' companies are stealing company property, vandalising company cars and office furniture. The number of disgruntled workers who have killed bosses and co- workers is on the rise. In one area of New York state, with two hard- hit IBM plants, social services officials attribute the 11 per cent rise in mental health problems to local lay-offs at IBM. The company posted losses of dollars 5bn in 1992.
Prayer may help the soul, but a lawyer is more useful in dealing with earthly problems. At IBM, thousands of jobs are at stake; but where only a few managers have been squeezed out of the corporate structure, the lawsuit has become an effective weapon.
Since 1967, arbitrary dismissal of workers between 40 and 65 on the basis of age has been illegal, but the mandatory retirement age of 65 has been progressively pushed higher. In 1978 it was 70, and in 1987 it was eliminated. Anyone of any age could sue. One recent case involved a 78-year-old Manhattan woman who was dismissed from her job as an office manager for a textile manufacturer. She sued for age discrimination, complaining she was not yet ready to sit down all day in the suburbs. She won dollars 99,000.
Most litigants are younger, in their forties and fifties. In one of the biggest awards, a 57-year-old electrical engineer from Long Island won dollars 2m. This has put companies on the alert that massive lay-offs must be seen to be fair, with as many workers under 40 as over 40 being dismissed.
One case that uses this argument concerns the takeover of a division of an American household goods company by Reckitt and Colman, the British enterprise. In a united action, 60 or so American employees aged over 40 have claimed they were unfairly singled out for dismissal because of their age. Only one of the American company's employees over 40 was given a job, while half of those under 40 were kept on.
The woman leading the fight is Sheila Rosen, who was 57 at the time of the takeover three years ago and had planned to stay on as a market research manager until she was 65. She had been with the US company for 15 years and says there was never any question of incompetence raised by the new employers. 'The law was broken here and I want to stand up and say: 'You can't do this to me',' she said.
Rosen is 60 now. The post-war baby boomers are nudging 50, and they have never been shy about demanding their rights. Corporate America has been warned that tomorrow's most troublesome worker will probably be wearing a pinstripe suit and carrying a briefcase.Reuse content