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3M pays $3 million to nearly 300 employees to resolve age bias suit

ST. PAUL 3M Co. has agreed to pay $3 million to about 290 former employees and put in place preventive measures to resolve a nationwide age discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission. The agency asserted the ...

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ST. PAUL

3M Co. has agreed to pay $3 million to about 290 former employees and put in place preventive measures to resolve a nationwide age discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission.

The agency asserted the Maplewood, Minn.-based industrial conglomerate unlawfully laid off hundreds of employees over the age of 45 during a series of terminations from 2003 through 2006. 3M fired many highly paid older employees, among others, apparently to save money and cut workers in salaried positions up to the level of director, the EEOC said Monday.

The EEOC also charged that older employees were denied leadership training and were laid off to make way for younger leaders. The agency's investigation found an employee email describing then-CEO Jim McNerney's "vision for leadership development" as "We should be developing 30 year olds with General Manager potential" and "He wants us to tap into the youth as participants in the leadership development."

In settling the lawsuit, 3M admitted no wrongdoing.

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"The settlement is a compromise and allows the company to avoid ongoing investments in time and legal fees. It is not an admission of any liability," said Donna Runyon, a 3M spokeswoman. The company's human resources practices are fair and comply with federal and state laws, she said.

The case was developed together with the Washington, D.C., law firm Sprenger and Lang, which earlier filed age discrimination lawsuits in Minnesota state and federal courts. In March, a $12 million settlement was reached in the state case on behalf of about 7,000 current and former employees. That case took aim at the company's performance-appraisal system, saying older workers were disproportionately downgraded, with negative effects on promotion, pay and termination decisions. Earlier this year, a federal case filed on behalf of 135 people, most of whom are former employees, also was settled. Terms were confidential.

Age discrimination violates the federal Age Discrimination in Employment Act, which protects people ages 40 and older from employment discrimination. The EEOC filed both the lawsuit and proposed consent decree resolving the suit in U.S. District Court in Minneapolis on Monday. The investigation involved coordinated efforts by EEOC's San Francisco, Chicago and New York offices.

3M is a diversified manufacturer with $27 billion in annual sales and about 80,000 employees worldwide.

Pending court approval, 3M will pay $3 million to about 290 former employees who are not allowed to benefit from the other suits. In addition, 3M agreed to put in place a review process for termination decisions and training on how to prevent age bias.

The company also will post openings for positions it had not previously advertised to enable older employees to apply. 3M will report on its compliance, provide layoff information to the EEOC in the next three years, and post a notice about the settlement.

The first charge in the EEOC case was filed in 2004.

"We had some evidence from the top that there was some intent to discriminate against older employees," said David Offen-Brown, an EEOC trial attorney in San Francisco who negotiated the settlement. The EEOC conducted an analysis and found a statistically significant correlation between age and termination. The firings were heavily skewed to older workers.

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It's not illegal for a company to terminate the most expensive employees to save money. It is illegal, however, to cut employees based on age. "If you are saying [that] we want to get rid of the older people and not just because they make more money, also we want to get rid of them because we want to replace them with younger people, that's a problem," Offen-Brown said. "That's illegal."

In this case, the EEOC concluded that 3M favored younger workers over older workers just because the workers were young -- not because of their performance.

"The law requires employers to base employment decisions upon each person's strengths and talents instead of relying upon generalized assumptions calculated around an employee's age," said Michael Baldonado, district director for the EEOC's San Francisco office, which spearheaded the investigation, in a statement.

Distributed by McClatchy-Tribune Information Services.

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