Nolan v. International Business Machines Corporation

Background

Michael Nolan, Karla Bousquet, Jay Zeltzer, and Teresa Cook sued International Business Machines Corporation (IBM). Randall Blanchard also sued Kyndryl Holdings, Inc. The IBM plaintiffs asserted claims for age discrimination, retaliation, and wrongful termination under federal and state laws. Blanchard asserted age-discrimination claims against Kyndryl under the federal Age Discrimination in Employment Act and Alabama law.

The plaintiffs alleged that they were victims of an age-based plan created by IBM executives and carried into Kyndryl after IBM spun off Kyndryl as a separate company in 2021. IBM terminated the IBM plaintiffs in 2023, and Kyndryl terminated Blanchard that year.

Motion to Sever

IBM and Kyndryl jointly moved under Federal Rule of Civil Procedure 21 to sever the IBM plaintiffs’ six claims against IBM from Blanchard’s two claims against Kyndryl. Severance means separating claims or parties into separate lawsuits. The court evaluated whether the claims could properly be joined under Rule 20 and considered judicial economy, possible prejudice, and whether the claims involved different witnesses and evidence.

Court’s Analysis

The court concluded that the plaintiffs did not assert relief against IBM and Kyndryl jointly or separately based on the same transaction, occurrence, or series of occurrences. IBM and Kyndryl were separate companies when the terminations occurred. The complaint did not allege overlap between the companies’ boards or management, IBM control over Kyndryl’s personnel decisions, Kyndryl participation in IBM’s decisions, or other coordination between the companies.

The court rejected the plaintiffs’ argument that an alleged common scheme to fire older employees was enough to connect the claims. It found that the allegations did not plausibly show that IBM and Kyndryl coordinated their actions. The court also found no common question of law or fact sufficient for joinder, even though both sets of claims involved the federal age-discrimination statute.

The court further concluded that separating the claims would promote efficient case management because the cases would involve different decision-makers, witnesses, and evidence. A joint trial could confuse the jury by requiring repeated instructions about which evidence applied to which plaintiff or defendant. The court found that the plaintiffs had not shown comparable prejudice; the possible need to obtain some discovery through subpoenas was not enough to outweigh the defendants’ concerns.

Disposition

The court granted defendants’ motion to sever. Michael Nolan, Karla Bousquet, Jay Zeltzer, and Teresa Cook will proceed as the only plaintiffs against IBM in case 24-CV-04653 (PMH). They must file a second amended complaint within 14 days, limited to allegations relating to their claims against IBM, and IBM must respond within 14 days after that filing.

The Clerk was directed to open a new civil case naming Randall Blanchard as the only plaintiff and Kyndryl Holdings, Inc. as the only defendant. The existing amended complaint and Kyndryl’s answer will serve as the operative pleadings in that case. Blanchard must file an amended complaint limited to his claims against Kyndryl within 14 days after the new case is opened, and Kyndryl must respond within 14 days after that filing. Judge Halpern was assigned to the new case as well.