Dell Denies Charges in Age and Sex Discrimination Lawsuit

The layoffs were consistent with Dell's business needs and not targeted at particular employees, the company said in a court filing on March 18. Dell announced in May 2007 that it planned to lay off 8,800 workers, or about 10 percent of its workforce, as part of its efforts to cut costs.

The lawsuit was filed in October last year by four former human-resources executives who are seeking US$500 million for the alleged discrimination. The women charged that Dell and its "old-boy network" discriminated against women and employees over 40 in areas including pay, promotions and layoffs.

The complaint includes photographs from Dell's Web site of the 14 members of its executive management team, to illustrate that they were all male at the time. The team today includes a woman, Vice President and Chief Marketing Officer Erin Nelson.

The suit was filed in the U.S. District Court for the Northern District of California and later moved to the Western District of Texas, where the plaintiffs are seeking class-action status.

In its response, Dell said any losses or damages suffered by the plaintiffs were caused by their own actions or conduct. "Consistently and at all times, Dell acted in good faith and maintained, implemented and enforced a policy in its workplaces against discrimination, harassment and retaliation," the company said.

It argued that the plaintiffs failed to take advantage of the "preventative and corrective opportunities" that Dell provides for its workers. It also denied that the suit was eligible for class-action status and asked the court to dismiss the case.

The outcome of discrimination cases can vary depending on diversity laws at the federal and state levels, said Aaron Maduff, a senior partner at Maduff Law. Courts in Texas and Louisiana tend to be more conservative and favor employers, he said.

Employers who believe they have a strong case sometimes fight claims of discrimination for years, Maduff said. Other employers prefer to settle to avoid litigation costs. "I've seen companies that will turn down settlement demands and then win the case, but they spent four to five times as much," he said.

The lawsuit against Dell accused it of segregating women into lower-grade positions with less pay and promotion than men who performed comparably or less well. A former senior HR manager, Mildred Chapman, was denied promotions or pay increases even though her responsibilities were equal to, or greater than, younger male directors, the lawsuit alleged. Dell denied those charges in its response.