A Virginia law firm's age-discrimination lawsuit against Capital One Financial Corp. offers a glimpse, though slanted, into the credit card lender's corporate culture.
The lawsuit, filed March 14, says the Falls Church, Va., company uses the same "information-based strategy" in selecting employees that it uses in evaluating potential credit card borrowers. The lawsuit cited the company as saying that this method is "highly predictive of performance success at Capital One."
According to the complaint, which is seeking class action status in the U.S. District Court for the Eastern District of Virginia, Capital One fired "many hundreds" of employees over the past two years because they were over 40.
Ten former employees are named as plaintiffs. A lawyer with the Richmond law firm that filed the suit, Butler, Williams & Skilling PC, was quoted by the Associated Press as saying that another 60 former employees who were fired have joined the suit. AARP will provide assistance to the plaintiffs' legal team.
A lawyer who specializes in labor disputes but is not involved in the Capital One suit called the lawsuit noteworthy because of the number of employees claiming discrimination. "Usually it is a single plaintiff or perhaps two or three," said Gregory W. Homer, a partner with the Washington law firm Drinker Biddle & Reath LLP. "The potential exposure could add up very rapidly."
A Capital One spokeswoman said that the company does not comment on pending litigation but that it "has strict policies against age discrimination and intends to defend itself vigorously against these claims."
The suit offers a detailed look at Capital One's extensive training regimen, which it says singles out employees early in their careers as "high potential" and lavishes training and recognition on them in an almost scientific quest to develop the star performers of tomorrow. The lawsuit charges that Capital One considered older employees "blockers" who impeded the progress of talented younger workers.
According to the complaint, beginning in October 2001, middle managers over 40 who had a history of good performance reviews were suddenly judged to be below par in a new ranking system. The new reviews were used to jettison between 6% and 10% of the company's 20,000 employees.
"From the beginning of this campaign, age was considered a negative factor by senior management at Capital One in the decision of which employees were to be terminated," the complaint says.
It alleges a pattern of promoting only younger workers. According to the suit, managers referred to one older middle manager as "the old lady" and to another as "the old bag." The complaint quotes chairman and chief executive officer Richard D. Fairbank as saying "the future of the company is in its young MBAs."
So-called high potential employees were placed in special company-sponsored courses at the University of Virginia's Darden Business School and offered "executive coaching funded by the company to develop as managers," the lawsuit says.
The complaint says that Capital One's annual reports generally included pictures only of young people until 2001, when an older employee questioned the practice.
The allegations sound fairly standard for such suits, Mr. Homer said, but they could spell trouble for Capital One if the plaintiffs have any "smoking guns," such as statements senior executives expressing age.
"The conventional wisdom is that employers tend to settle those cases rather than go to trial," he said. "In general, age-discrimination plaintiffs are more likely to prevail, and the average jury verdict is likely to be higher" than in out-of-court settlements.
