IBM Suit Against Former Diversity Chief Illustrates Growing Value of D&I

IBM Suit Against Former Diversity Chief Illustrates Growing Value of D&I

Microsoft announced on Sunday that it had hired Lindsay-Rae McIntyre as its next Chief Diversity Officer, reporting directly to Chief People Officer Kathleen Hogan and leading “a multitude of existing cross-company initiatives to further Microsoft’s progress in building a diverse and inclusive culture.” McIntyre comes to Microsoft after two decades at IBM, where her most recent titles included Chief Diversity Officer and Vice President of HR.

Not so fast, says IBM, which filed suit against McIntyre on Monday, claiming that her new position at Microsoft violates a year-long non-compete agreement and puts IBM’s trade secrets at risk, GeekWire’s Todd Bishop reported:

The suit, filed federal court in New York today, describes McIntyre as one of the company’s “most senior executives with knowledge of IBM’s most closely guarded and competitively sensitive strategic plans and recruitment initiatives,” including “confidential strategies to recruit, retain and promote diverse talent.”

In her new role at Microsoft, she would compete for the many of the same types of hires she previously recruited for IBM, the suit says. … IBM claims in its suit that it will be “inevitable” for McIntyre to use IBM’s trade secrets against the company.

In its complaint, IBM argues that Microsoft itself recognizes the competitive advantage of keeping diversity data and strategies private, pointing to an ongoing class-action lawsuit alleging that Microsoft discriminates against women, in which the tech giant has resisted efforts by plaintiffs to force it to hand over detailed diversity data: “As Microsoft has admitted, disclosure of the very type of confidential information that McIntyre possesses—non-public diversity data, strategies and initiatives—can cause real and immediate competitive harm.”

This argument is an interesting reversal of one the plaintiffs in the class action suit against Microsoft have made: that Microsoft should not be allowed to keep data from its internal pay equity study under wraps at the same time as it uses that study to advertise itself as a progressive employer.

While lawsuits are generally unwelcome news for the companies involved, this particular case is actually rather flattering to the practice of diversity and inclusion in general, as it “shines a light on the increasing role that diversity measures play in corporate America,” Chris Dolmetsch writes at Bloomberg:

Technology and financial companies have reserved those fights in the past to employees who possessed key technical or strategic knowledge, not those entrusted to make decisions on hiring and the makeup of the workforce. … McIntyre oversaw teams responsible for developing artificial intelligence-based tools and methods used to track career development, recommend growth and promotion opportunities and measure diversity metrics, IBM said.

More than just shining a light on D&I, the suit illustrates how companies like IBM are increasingly cognizant of its bottom-line importance—indeed, Steve Boese comments, it underscores the value of HR and talent acquisition more broadly in today’s economy:

It probably matters that IBM and Microsoft are highly likely to be competing for many of the same kinds of talented people across a wide spectrum of roles. And it also probably matters … that labor markets in general are really tight, and for certain ‘hard-to-find’ roles are incredibly tight. … The diversity angle here is interesting and timely, and probably contributed to why this was a story covered in the general tech press. But what would be more interesting to me is to see a major non-compete battle be launched over say a CHRO or a VP of Talent, or even a Global Leader of Talent Acquisition.

While this lawsuit certainly could raise the profile of HR and D&I practitioners, another thing to consider is that in our research at CEB, now Gartner, we’ve found that nearly two-thirds of CDOs are new to their organization. This is a group that moves across organizations frequently, so restricting them with non-competes could make it harder for companies to recruit new D&I leaders.