Best Buy hit with lawsuit over layoffs of IT workers

Richard Walstrom said this week that he sensed something was wrong during a job fair in May, when he saw some of his IT co-workers, who had also been told by Best Buy Co. Inc. that they were losing their jobs. “There were a high percentage of people with grey hair,” said Walstrom, who’s 57. “It was a lot of us. I didn’t really realize what had happened until you look around and say, ‘What’s wrong with this picture?’ ”

Walstrom is one of 44 former Best Buy IT workers who filed a class-action lawsuit on Wednesday claiming that the Richfield, Minn.-based electronics retailer engaged in a pattern of age discrimination in terminating their jobs. The plaintiffs range from 40 to 71 years old, and their average age is 51, according to the lawsuit filed in U.S. District Court in Minnesota.

The charges relate to layoffs that were announced in April, when Best Buy said it planned to outsource its IT operations to Accenture Ltd., as well as to a smaller round of cuts that took place in October 2003.

A spokeswoman for Best Buy said it hadn’t received the complaint as of Thursday. But the retailer issued a statement saying it was aware of the suit. “We believe these claims are without merit and intend to vigorously defend the action,” Best Buy said. It also stated that the average age of its 3,700 corporate employees is 35. When it announced the outsourcing contract with Accenture, Best Buy said that only 40 of its 820 IT employees would remain with the company. The retailer expected about 650 workers to receive comparable job offers from Accenture and continue working at Best Buy’s offices. The other employees were told that they would be let go.

According to the lawsuit, 126 IT workers were terminated in June. Stephen Snyder, the Minneapolis-based lead attorney for the plaintiffs, said that 82 of those workers were at least 40 years old — the minimum age required to file an age-discrimination claim. Thirty-one of the plaintiffs were among the workers who were dismissed in June.

The 13 other plaintiffs lost their jobs when Best Buy laid off a total of 25 IT workers last year, according to the lawsuit. Twenty of them were at least 40 years old, Snyder said. The lawsuit noted that another worker turned 40 the day after he was laid off.

Marshall Tanick, a Minneapolis-based employment lawyer who has handled at least 50 age discrimination complaints during the past 20 years, said the larger a group of plaintiffs is, the greater chance it has of success. The Best Buy suit is “an unusually large case, which makes it particularly potent,” he said.

Snyder said the Best Buy case involves the largest number of plaintiffs that his firm of Gray, Plant, Mooty, Mooty & Bennett PA has represented in an age-discrimination complaint. The previous high was 43 in a case against Monsanto Co. that was settled for US$18.25 million in 1996, he said.

“Computer industry employees are particularly vulnerable to age discrimination because of this commonly-held perception that older individuals can’t keep up with new technology,” Snyder said. “As with any stereotype, that may apply to some people, but it doesn’t apply to others.”

He added that the most recent performance reviews for each of the plaintiffs had indicated he or she was a “solid performer” or better.

“If you’re doing your job well, getting good reviews and merit bonuses, you don’t expect to get dumped,” Walstrom said of his termination. “In that respect, it was a surprise.”

Walstrom, who said he worked at Best Buy for almost seven years, was a technical consultant assigned to special projects when he was let go in April. But he said that until September 2003, he was the manager of the company’s database support group, which consisted of 21 employees and seven or eight contractors and was charged with ensuring the health of all corporate-level production databases.

Walstrom’s group was then shifted from operations to Best Buy’s database development team, he said, adding that he soon learned from his new boss that his job was going to someone else. “The guy picked to replace me had no experience managing databases,” Walstrom said. “He had been a project manager. But he was about 20 years my junior. You look at that in hindsight and start figuring things out.”

The plaintiffs asked for a jury trial and are seeking back pay and benefits, damages and an order that Best Buy either reinstate them to comparable jobs or give them salaries and benefits until they reach their expected retirement ages.

Not every former employee who was eligible to file an age-discrimination claim against Best Buy did so. Snyder said workers who accepted severance pay were required to sign a document releasing the company from all claims, including age-discrimination complaints.

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