Dive Brief:
- Since 2010, a string of 20 discrimination lawsuits has been filed against Vanguard, the $3.4 trillion investment giant based in Malvern, PA, according to the Philadelphia Inquirer.
- The article says that the litigation "indicates a trend that Vanguard pushes out older workers who don't get promoted, who take family leave, or who raise workplace complaints involving racial and age discrimination."
- Of the 20 cases, the Inquirer reports that the company settled 14, won three in court and still have another three pending. Additionally, Vanguard forked over $300,000 in 2010 and $500,000 in 2008 to settle cases filed by the Equal Employment Opportunity Commission "alleging racial bias," according to the article.
Dive Insight:
While being sued by employees is hardly rare in today's world, the one employment law attorney interviewed by the Inquierer wondered why Vanguard "continues to litigate, rather than address the underlying problems."
According to an ex-employee, Vanguard uses a controversial system called "forced ranking," famously first used by General Electric in the 1980s (where it was dubbed "rank and yank" as a way to determine who loses their jobs due to low performance). However, forced ranking lost favor after being the cause of legal problems for employers like Microsoft, Ford, 3M and Capital One, says the Inquirer. A 2014 Wall Street Journal article also declared forcedranking "dead."
For its part, Vanguard said in an email to the Inquirer that that it did not use a Forced Ranking system and denied workplace discrimination was happening at the company. Spokeswoman Arianna Sherlock's email also said that "none of the claims you reference have resulted in any finding, award, or verdict against Vanguard."