Reject Your Elders
Beverly Beuster thought she was set for life. Transferred by Martin Marietta Corp.--now Lockheed Martin--from her hometown of New Orleans to Colorado in 1984, "I planned to be with them until I decided to retire at sixty-five or seventy years of age," Beuster says. That was another twenty years or so down the road.
But in 1992, Beuster abruptly reached the end of the line at Martin: "I was downsized, off-loaded, fired or whatever you want to call it."
Legally, it's called "discriminated against"--on the basis of age. Beuster is not yet fifty, but the Age Discrimination in Employment Act applies to individuals forty and over. And when Martin was busily downsizing in the early Nineties, laying off 3,300 workers, most of them from Colorado, a disproportionate number turned out to be over forty. That's what netted the company several private legal actions, as well as a class-action lawsuit filed in May 1994 by the Equal Employment Opportunity Commission against one of the state's largest employers.
A proposed settlement of that suit was released last Thursday, but it is hardly cause for thanksgiving. More than 2,000 of those who were laid off will split $13 million--which averages out to about a month of a salary they may never see again. Because although some of the workers will get their jobs back, most will not.
Beuster knew that the end of the Cold War would change the defense-contracting industry. She just never thought she'd be one of the people left out in the cold.
"We could retire there--that's what they told us in staff meetings," she recalls. "I was one of those people who said it would never happen to me, because of my clearance level, because of all the years I had been there."
But those years wound up weighing against her. Beuster was in the middle of an approved, six-week medical leave when she was called into the office and given her pink slip. "It was devastating, totally devastating," she remembers. In honor of her thirteen and a half years of loyal service to Martin, the company gave her two weeks' severance. Total. Three other people in her Contracts Administration unit were also laid off; all of them were over forty.
Today Martin's business has bounced back, and that unit is twice as large as it was four years ago. Beuster's job has been filled by a younger woman--a manager's wife transferred to Colorado from New Mexico. Downsizing is not always on the up-and-up.
Beuster's story is echoed by hundreds of former Martin workers here in Colorado, many of whom have not met with her success in finding a job--if you can call temporary paralegal work at a third of her old salary "success." In addition to signing on to the class-action suit, in 1993 Beuster also became a plaintiff in a private lawsuit against Martin, joining other workers who say their age, rather than their job performance, was the reason they were terminated. "I'm one of the younger ones in the group," Beuster says. "The 'young one,' they call me."
In March, Beuster was one of six laid-off workers from across the country who testified before Congress on the perils of downsizing; she'd been chosen after her husband, who's worked under the threat of layoffs at Martin's Waterton facility since 1990, wrote to the chair of the Progressive Caucus and suggested they listen to his wife. And she had plenty to say. Four years after the majority of Martin's layoffs, the company had "more profits than before, large back orders, and future orders that are more than adequate to keep their workers," she told the caucus. "The large bonuses, promotions and benefits given to these CEOs/top managers as 'rewards' for their normal duties are being given while employees do not receive raises, promotions, and the older workers are thrown out on the street like yesterday's trash."
And if that trash heap is as gray as the ashes of charred dreams, it's no accident.
"We want to make sure we are protecting against a continually graying organization," one Martin exec testified during an EEOC deposition. "From a business point of view, the grayer the organization the higher the salaries, the higher the salaries the more overhead costs you have, the more overhead costs you have the less opportunity there is to compete against competitors whose overhead costs and direct costs are less than yours because their salaries are less."
That deposition, like other evidence accumulated during the two years the EEOC pursued its case against Martin, is now sealed. By this summer, the EEOC and Martin were mediating a settlement, occasionally meeting in courtrooms off-limits to the public. The most recent hearing was held in U.S. District Judge Wiley Daniel's courtroom at 2 p.m. last Thursday--exactly half an hour before the EEOC had called a press conference to announce the settlement.
Such close--and closed-door--dealings have marked much of the EEOC's handling of the Martin case. At one point, Martin's attorneys told managers "their potential liability--assuming everything went poorly for them--could be as high as 600 to 800 million dollars," says Mark Brennan, the EEOC's lead attorney on the case from its filing in May 1994. Instead, outgunned and outstaffed, the agency settled for a fraction of that. "The agency's litigation program was treated as a poor stepchild," Brennan adds. "We were a platoon to an army, a flea on the elephant's ass." Although Brennan left the agency last February, "my criticisms of the settlement would be the same were I still there," he says. "I would never have lauded it as a great victory."
Rather than the $200 million award it's been billed as, the settlement really requires only that Martin pay out $13 million to 2,000 people laid off between 1990 and 1994. By comparison, a few days before the EEOC announced the Martin deal, Texaco agreed to pay $176 million to settle a suit brought by black plaintiffs who alleged they were discriminated against and denied promotions--not terminated altogether.
And while Martin has agreed to rehire at least 450 of those older workers--at a cost estimated at $171 million at the EEOC announcement--they will fill slots the company would have to fill anyway. Unless, of course, Martin hadn't laid off the older workers in the first place.
"All I see about me is a sea of gray hair," Peter Teets, president of the aerospace division, told a meeting attended by a soon-to-be-laid-off exec who later testified in the class-action case. "This has got to change." And it did.
The company was not without options. At one point Martin considered "severance enhancements" that would soften the impact of the layoffs on an age group the company knew was protected under the ADEA. The savings from lower salaries would have covered the larger severance packages, one official testified in a deposition Brennan remembers as the "highlight of my career at the EEOC." But instead, the company cut its older workers off cold.
The EEOC's settlement with Martin "shall not be construed as an admission by MMC that it violated the ADEA," according to the terms of the deal. "MMC has asserted that declining demands of MMC's customers required MMC to reduce its workforce, which MMC asserts it did using age-neutral measures."
The EEOC, eager for a win, was apparently willing to accept that. Attorneys pushing other claims against Martin may not prove so amenable. The suit in which Beuster is a plaintiff is scheduled for trial next October.
"What they're doing is lining their pockets," she says of Martin. "Those are our tax dollars at work there."
And in her case, they did not work very well.
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