The charge filed Wednesday by the Society of Professional Engineering Employees in Aerospace alleges that Boeing used a two-step scheme to shed older, higher-skilled engineers from its payrolls.
First, the company changed how it determines who gets laid off when work is cut, and then it created the need for layoffs by announcing plans to move jobs — but not necessarily employees — to non-union shops out of metro Puget Sound, according to the charge SPEEA filed with the state’s Human Rights Commission.
The union also filed an identical charge with the U.S. Equal Employment Opportunity Commission’s Seattle office.
At least 4,500 workers — and possibly more — are affected by the company’s actions, said Ray Goforth, SPEEA’s executive director, in an interview with The Daily Herald. “It dramatically shifts who is positioned for future layoffs.”
The company denies the charge.
“Boeing does not discriminate against its employees on any basis,” a Boeing spokesman said. “Diversifying our engineering workforce reflects changes in our business and is not related to the age of our employees. We’re disappointed that SPEEA filed this baseless complaint.”
Sometime before March, the company changed how it assigns what are called retention rankings, which determine the order by which employees are laid off if jobs are cut. The rating system puts each worker in one of three tiers — R1, R2 or R3 — with R1 being the best rating and last to be laid off, and R3 being the first group to go.
Previously, the company ranked employees relative to everyone doing the same job. So, for example, an electrical engineer would be ranked relative to every other electrical engineer at Boeing, Goforth said.
Since the system was meant to insulate the highest-value employees from layoffs, a highly skilled and experienced worker was much more likely to get an R1 ranking than a new hire fresh out of college.
But that changed when Boeing tweaked the system ahead of its annual update of retention rankings in March, he said.
This year, the Chicago-based company considered another factor, employees’ job levels, when determining retention rankings, according to the charge SPEEA filed.
Job levels are assigned based on a worker’s skills and experience. They are not based on seniority, Goforth said.
For example, Boeing’s jobs website Wednesday listed an opening for a Systems Engineer 1 or 2 in Huntington Beach, California. The job description explained that an applicant with just a bachelor’s degree qualified for hire as a Level 1, while a bachelor’s degree and two or more years real-world experience were needed to come on as a Level 2.
When Boeing updated its retention rankings earlier this year, it rated employees relative to co-workers doing the same job and with the same level. For example, a systems engineer 1 was ranked only against other level 1 systems engineers and not against more experienced workers, according to SPEEA’s charge.
“This illegal manipulation doubled, tripled, and quadrupled layoff vulnerability for older employees compared to previous years,” Goforth said in a news release from SPEEA.
In early April, the company announced plans to move several thousand engineering jobs — but not workers — out of metro Puget Sound.
Affected employees are effectively being laid off.
Publicly, company spokesmen have said most are expected to land in other positions with Boeing in the region, and that moving engineering work to a handful of so-called “centers of excellence” around the country is a business decision meant to maintain a competitive edge.
The moves could also help Boeing offset continued weak demand from the defense industry, said Scott Hamilton, an aerospace analyst with Issaquah-based Leeham Co.
Relocating jobs could help the company hold onto talent elsewhere, and keeping jobs in states with influential Congressional delegations, such as California, helps Boeing lobbyists in D.C., he said.
At the same time, the company has clearly worked to weaken SPEEA, Hamilton said.
Based on SPEEA’s calculations, layoffs tilted toward older workers could save Boeing $3 billion to $5 billion in vested benefit costs, such as pension payments and retiree health care, Goforth said.
SPEEA’s case is based on statistical analysis of Boeing data on its retention rankings. The union’s findings were verified by an independent third party not associated with labor, he said. “The data are a startling indictment of the company.”
In March, the union filed age discrimination charges against Spirit AeroSystems, Inc., in Wicita, Kansas. The company, which makes 737 fuselages, terminated hundreds of workers deemed to be too old, he said.
Goforth said he expects the state commission will defer to the federal EEOC’s decision to take the case or not.
Dan Catchpole: 425-339-3454; email@example.com; Twitter: @dcatchpole.
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