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Over the years, it has been called rank and yank, dead man’s curve, vitality curve, dog-eat-dog. Paul “Pete” Jones of Ohio and Shirley Williams of Kansas call it age discrimination. Jones, 60, had been a senior engineer at Goodyear Tire & Rubber Co. for 35 1/2 years. He received good performance reviews annually until 2001, when the company introduced a new review program. He was fired in January 2003. Williams was 61 when her job was eliminated in 2002 by Sprint Corp. as part of a reduction in force which, she has alleged, was based on a performance review similar to one used by Goodyear. “They knew what they were doing,” said Jones. “They had an overall goal and plan to get rid of older people.” Forced ranking systems are performance evaluation programs used by managers to rate employee performance from best to worst and to determine which employees get raises or promotions and, sometimes, fired. Although forced rankings have been around since the 1960s — Dow Chemical Co. used the program for nearly 30 years before scrapping it in the mid-1990s — they continue to be controversial and have triggered a new round of litigation stemming from company layoffs in the most recent economic downturn. Attorneys from AARP, a group representing retired people, recently joined private plaintiffs’ lawyers in their age discrimination class action against Sprint — AARP’s fifth corporate forced-ranking lawsuit in three years. Two of those cases have settled, and a federal judge in the Sprint suit recently granted provisional certification of a collective action, which may be joined by up to 6,800 former Sprint workers older than 40 who were laid off between October 2001 and March 2003. “I cannot imagine that anyone would continue to use this system given the history of what has happened with litigation,” said Steven D. Bell of The Simon Law Firm in Cleveland, Ohio, one of Jones’ attorneys in the Goodyear suit. “There is not just discrimination on the basis of age but discrimination in terms of minorities as well.” RANKING EMPLOYEES Despite Bell’s view, some version of the system, by some reports, is used by one-third of all employers today — more than double the number in 1997 — and by about 25 percent of Fortune 500 employers, including General Electric Co. The system generally involves “forcing” a predetermined percentage of employees into categories on a performance scale. The categories are often designated As, Bs and Cs, or have numerical designations. The distribution on the scale usually follows a bell-shaped curve (hence the nicknames “dead man’s curve” or former GE President Jack Welch’s favored “vitality curve”) with 10 percent in the top rank, 80 percent in the middle and 10 percent at the bottom. Employees don’t want to be a “C” because companies will typically warn the first-time “C” earner that he or she must improve, and typically fire the second-time “C” earner. At GE, the bottom 10 percent is terminated each year. Proponents of forced ranking, such as Welch, who introduced it at GE in the 1980s, contend it helps to raise a company’s performance level. Critics counter that it is arbitrary, hurts employee morale and encourages deal-making among managers who know someone has to be in the bottom 10 percent. And, they add, there is the risk of litigation: Just ask Ford, GE, Capital One, Conoco, Microsoft, Caterpillar, Goodyear and Sprint. Forced ranking systems are not inherently discriminatory, said AARP attorney Thomas Osborne, who is working on the Sprint and Goodyear lawsuits. “If you’re going to do this bell curve — there are other versions, but the bell curve is sort of the model — you don’t have to stick the largest percentage of your workers who are older workers in the lower end of it,” Osborne explained. James K. Fett of Fett, Roumel & Fields in Pinckney, Mich., who represented workers in the Ford Motor Co. suit and is also working on the Goodyear Co. case, agreed, adding: “Theoretically, forced ranking is an age — neutral way of determining who the top and bottom performers are as well as those in between. For some reason though, we find that when these systems are implemented, there usually are claims of age discrimination.” What often prompts claims, Fett said further, is when an employer who never used forced rankings “shocks” the work culture by introducing these rankings without proper orientation. “The other aspect of it is you’ve got managers looking at who they are potentially going to get rid of,” he said. “Because of budgeting and the economy, they’re looking at higher-cost employees, and, disproportionately, that will be older employees with the company the longest.” Of the five suits that AARP has joined, two have settled. Two years ago in Siegel v. Ford Motor Co., a Michigan state judge approved a $10.6 million settlement of age discrimination claims against Ford, which applied an A-B-C grading system to the top 20 percent of its executives, about 18,000 employees. The settlement benefited more than 425 managers who were over 40 and received a low rating on their performance appraisal. In the other case that settled, Feltman v. Capital One Services Inc., a class of several hundred employees older than 50 sought damages for their terminations based on forced rankings and despite having had prior superb job evaluations. The ratings allegedly were carried out by younger managers seeking to fulfill Capital One’s vision of a company led by young, high-potential employees. A federal district court approved the settlement in June 2003, but the parties agreed to keep the terms confidential. Goodyear’s performance review system — which was abandoned shortly before the filing of Jones v. Goodyear Tire & Rubber Co. — was very similar to Ford’s program, according to Jones’ lawyer, Bell. “Once we get discovery, I’m pretty confident we’re going to find the program substantially reduced the number of older workers,” said Bell, adding that he expects his class of white-collar workers in Ohio — to which the court has limited the action — to number about 700. Bell said the suit was filed in state court because of the uncertainty in the federal circuits about whether disparate impact claims can be brought under the federal Age Discrimination in Employment Act. The U.S. Supreme Court is expected to answer that question in its new term. EIGHT HUNDRED JOIN In Williams v. Sprint, about 800 older workers have already opted into the class, said Dennis Egan of Kansas City, Mo.’s The Popham Law Firm, which is working with the AARP lawyers. “I think forced ranking programs are inherently subjective and the caselaw for many years has been very skeptical and willing to scrutinize very closely subjectivity in employment decisions,” Egan said. Goodyear and Sprint have vigorously denied the allegations that the programs targeted older workers. “During the period of time in question (the 2001-2003 reduction in force), the median and average ages at Sprint actually increased,” said Sprint spokeswoman Jennifer Walsh. Sprint’s current performance review program is a “modification” of what was in place during the layoffs, she said. Jones said he had expected to work at Goodyear until he was at least 62, “and then see how things went.” “I think we’ll be vindicated,” he said. “It’s just so very slow.”

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