Fired IBM manager’s lawsuit over racial bias at the company heads to court
A federal judge has allowed a lawsuit to proceed from a former IBM manager who claims he was unfairly fired after complaining that racism kept a Black sales representative from landing a large commission payment.
Earlier this month, U.S. District Judge Marsha Pechman denied IBM’s request for a summary judgment in the lawsuit that former IBM manager Scott Kingston filed against the corporation.
The summary judgment would have prevented the case from going to a full trial, but now one is expected to be held via Zoom next month in the U.S. District Court for the Western District of Washington.
At the heart of the trial is a dispute about how IBM pays its sales representatives, particularly with commissions on large software deals. Sales representatives have claimed that IBM has unfairly capped many of these commissions — sometimes reducing potential payments by hundreds of thousands of dollars — when company policy said commissions were uncapped.
This has led to numerous lawsuits in the past few years. Raleigh lawyer Matthew Lee, who works for the law firm Whitfield Bryson, has represented the plaintiffs in many of these cases, including Kingston.
In Kingston’s case, the former IBM manager said he was unfairly fired for protesting the capping of commission payments, specifically to one Black sales rep named Jerome Beard.
In a statement to The N&O, IBM defended its firing of Kingston.
“Mr. Kingston’s termination by IBM was lawful. IBM does not condone race or age discrimination, or any other forms of discrimination,” the company said. “The allegations in this complaint are false and have no foundation in facts, and IBM will defend itself vigorously against these claims.”
The claims could ultimately be decided by a jury.
Case background
Kingston, who worked at IBM for 18 years, was a second-line manager who supervised Beard and another sales rep, who is white.
In 2017, the sales rep was part of a team that completed an $18.3 million sale to SAS Institute, the Cary-based analytics company. After the completion of the deal, and some wrangling back and forth about compensation, the sales rep received a commission check worth $1.6 million, the suit says.
Around that time period, however, Beard had two would-be commissions of $1.5 million capped at 15% — a “multimillion-dollar reduction,” according to court filings.
After learning of Beard’s payment cap, Kingston told his superiors at IBM that capping those commissions was against company policy and “pointed out the possibility of racial discrimination and the fact that it was an appearance that would be hard to overlook, given that the other sales rep was white and Jerome Beard was Black.”
(Beard filed his own lawsuit against IBM. Last year, Beard, who was also represented by Lee, settled out of court with IBM. The terms were not disclosed.)
Kingston, who is white, says he was fired for protesting the capping of the commissions. IBM said Kingston was fired for not limiting the commission for the other rep, according to the lawsuit.
But Pechman, the judge, did not seem to buy IBM’s claim, noting that IBM’s practices stopped managers from capping commissions.
She said IBM has yet to “articulate a reason” for firing Kingston who was acting consistently with the company’s own policies.
“This was a confused process where (Kingston) — who followed IBM’s written policies to the letter — was terminated for failing to violate those policies,” she wrote in her judgment.
“Under these circumstances, a reasonable fact-finder could determine that IBM’s proffered reasons for terminating Plaintiff are pretextual,” she added.
Kingston also claims that age bias played a role in his termination. At the time of his firing, he was 58.
Pechman has let Kingston’s age claim stand as well.
Past legal actions against IBM
In the past decade, IBM has been criticized for firing many of its older employees. Last year, the U.S. Equal Employment Opportunity Commission, a federal agency that enforces civil rights laws in workplace discrimination cases, determined that IBM exhibited a pattern of age discrimination in its layoff practices between 2013 and 2018, The News & Observer previously reported.
Locally, three Triangle sales reps also have sued IBM for capping commissions in recent years. Those sales reps — Bobby Choplin, Tom Stephenson and Paul Vinson — all saw commissions reduced by hundreds of thousands of dollars. IBM has a large presence in Research Triangle Park, with more than 1,000 employees based there.
According to Lee, the cases brought by Choplin and Vinson have been resolved out of court. Stephenson’s case is headed to trial in July in the U.S. District Court for the Middle District of North Carolina.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
