I put this same question to my brother, an executive in a small business recently. His answer was lawsuits. Some people take dismissals hard even when they are done for the best of reasons. It just makes sense to offer a modest severance package that settles the matter up front rather than risking the time and expense of vindictive legal action.
It's a good time for the company to attach various nondisclosure, noncompete, non disparagement clause(s) and they mark the severance pay as consideration. These agreements typically only hold up if there is commensurate consideration attached to them. This of course varies by state and local laws if they hold up at all.
IBM has been repeatedly sued, sometimes successfully, for age discrimination, so you can bet that severance package requires agreeing not to sue for age discrimination.
Some American companies apparently have yet to figure out you can fuck over your employees even more by not paying severance. IBM's clearly behind the curve on this trend.
Very unfortunately not the case. I didn't know the following could happen until the story was related to me this week by someone I know.
Apparently a tactic used by companies acquiring other companies is to re-negotiate severance policies with employees. As in zero out time in the old company. This is difficult for average employees to detect in the dense legalese, and it is an extremely convenient way to rid the new owners of employees that fall on the wrong side of the most desired age bracket.
The person this happened to was with the original company for a little over 20 years, the new merged company for three, and only got credit for two years (one year "probationary" period before severance starts counting) when the axe fell last month (not IBM).
Jesus. When the company I worked for (here in Australia) was subsumed by another, all the contracts were renegotiated specifically to include our years spent at the old company. Going in the opposite direction is pretty awful.
Is that actually true? I've never heard of a IBM union for tech employees. Is Alliance for programmers? Are they officially unionized? It seems ambiguous from their about statement [1]:
> Alliance@IBM/CWA Local 1701 is an IBM employee organization that is dedicated to preserving and improving our rights and benefits at IBM. We also strive towards restoring management's respect for the individual and the value we bring to the company as employees. Our mission is to make our voice heard with IBM management, shareholders, government and the media. While our ultimate goal is collective bargaining rights with IBM, we will build our union now and challenge IBM on the many issues facing employees from off-shoring and job security to working conditions and company policy.
There is WARN to consider, which is why they can't just do mass layoffs without lots of notice.
Is the reason only lawsuits and good will?