Estle v. International Business Machines Corp., No. 20-3372 (2d Cir. 2022)Annotate this Case
Plaintiffs, former IBM employees who entered into severance agreements in which they agreed not to join any collective actions against IBM, filed suit challenging the validity of those collective-action waivers, alleging claims under the Age Discrimination in Employment Act of 1967 (ADEA). The district court granted IBM's motion to dismiss for failure to state a claim. In 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), the Supreme Court held that section 626(f)(1) of the ADEA applied to substantive rights, like the statutory right to be free from workplace age discrimination, but not procedural ones, like the right to seek relief from a court in the first instance.
The Second Circuit concluded that collective-action waivers, like arbitration clauses, address procedural, not substantive rights, and thus do not require special disclosures under section 626(f)(1) of the ADEA for their acceptance to be knowing and voluntary. Therefore, the district court correctly held that 14 Penn Plaza governs this case and granted IBM's motion to dismiss.