Ethics Newsline®

LEXINGTON, Kentucky
IBM last week agreed to pay $15.5 million to settle charges that the computer giant misled a group of retiring workers into leaving IBM just months before improving the company’s benefits package.

The payout will go to roughly 340 workers formerly employed at IBM’s Lexington-based information services division. The workers, who retired in 1990, will receive between $2,000 and $150,000 each, the Associated Press reported.

The workers took early retirement in 1990 when IBM was trying to downsize its Lexington workforce.

IBM allegedly told the workers that taking leaves of absence prior to leaving the company would not increase their retirement benefits.

But months after they retired, the suit contended, IBM improved its benefits program and workers who took leaves would have benefited.

The workers filed suit in 1992, alleging that they had been deceived by IBM, and would have been eligible for the boost in benefits had they not followed IBM’s advice, AP reported.

IBM spokeswoman Jana Weatherbee called the settlement “reasonable,” saying that it was preferable to continuing to battle the charges in the courtroom.