HPE, HP Sued for Elbowing Out Older Employees

Hewlett Packard Enterprise and HP are facing a potential class action lawsuit brought earlier this month by four former employees.

The companies engaged in widespread age discrimination during a restructuring of the legacy computer and printer manufacturer, according to their complaint, filed in U.S. District Court in San Jose, California.

HP from 2012 to 2015 made a series of discriminatory job cuts involving tens of thousands of workers, the suit alleges. Cuts made late last year, when the company split into two separate units, reflected a well-publicized effort to become “younger,” according to the complaint.

Diamonds and Pyramids

HPE CEO Meg Whitman (who was then CEO of the undivided HP) in 2013 told a group of securities analysts that the company needed to transform itself from a “labor diamond” into a “labor pyramid” or a “quite flat triangle” with young employees at its base, according to the complaint.

The plaintiffs are seeking to have the suit confirmed as a class action case for former HP and HPE employees who were 40 years old or older when they were cut — a class that potentially could number in the thousands.

The four plaintiffs are Donna Forsythe, who was laid off from HPE in May at age 62; Arun Vatturi, who lost his HP job in January at age 52; Dan Weiland, who was cut from HP in July 2015 at age 63; and Sydney Staton, who was cut in April 2015 at age 54.

HP and HPE officials denied the allegations and said their companies were committed to lawful employment practices.

“HP has long been committed to the principles of equal opportunity, diversity and inclusion,” said spokesperson Tom Suiter.

“Any decision to implement a workforce reduction is always difficult, but we take care to make tough decisions based on legitimate, nondiscriminatory reasons,” he added. “We are aware of the claims, deny them and plan to defend against them.”

HPE also denied the allegations.

“Hewlett Packard Enterprise has a longstanding commitment to the principles of equal employment opportunity and age inclusion is no exception,” said spokesperson Blair Hinderliter. “The decision to implement a workforce reduction is always difficult, but we are confident that our decisions were based on legitimate decisions unrelated to age.”

Industry-Wide Problem

The employment practices of Silicon Valley firms have been a subject of scrutiny for some time. The tech industry has developed a reputation not only of lacking racial and gender diversity, but also of blatantly favoring younger employees.

“This has been a problem that was well documented at Google and other software companies,” observed Kevin Krewell, principal analyst at Tirias Research.

“The rationale is that young people are more willing to work long hours and sacrifice work/life balance to deliver a product,” he told the E-Commerce Times.

The problem of age discrimination at Silicon Valley companies is compounded by the fact that industry leaders largely have been unapologetic about the practice, Laurie McCann, senior attorney at AARP Foundation Litigation, said this spring in testimony before the Equal Employment Opportunity Commission.

HP’s goal apparently was keep salaries down at the company, but the way it was executed may have crossed a line into discriminatory behavior, said Rob Enderle, principal analyst at the Enderle Group.

“Whitman has seemed excessively focused on salaries of late,” he told the E-Commerce Times.

“The nature of her compensation is that she makes more as expenses drop, showcasing a natural affinity for her own income over that of others,” Enderle said. “The intent wasn’t to discriminate by age, but that appears to be the result.”