IDS Financial Opts to Settle Age Bias Suit : Litigation: Thirty-two former managers over 40 will divide $35 million.

IDS Financial Services Inc. will pay $35 million to settle a lawsuit accusing it of a nationwide pattern of age discrimination against division managers over 40, attorneys said Thursday.

“This prominent case, with nationwide scope and vigorously litigated issues, brings to the fore the strong national interest in eliminating age discrimination,” said Donald R. Livingston, general counsel for the U.S. Equal Employment Opportunity Commission.

The EEOC had intervened in the suit on the side of the plaintiffs. Livingston said the case showcases the federal Age Discrimination in Employment Act “as a meaningful statute to protect the rights of older workers.”

The out-of-court settlement involved Minneapolis-based IDS, the EEOC and 32 former IDS division managers who worked in offices around the country. The $35 million will be paid to the 32 plaintiffs in varying amounts, said one of their attorneys, David P. Pearson.

IDS admitted no wrongdoing in the settlement but agreed to monitor its treatment of division managers over 40. It will internally audit its personnel procedures and practices, train its managers, and send annual messages emphasizing its commitment to fair employment practices.

IDS also must report to EEOC about its monitoring efforts for four years.

The class-action suit, filed in January, 1989, said that, in the 1980s, the 32 managers were replaced by less experienced managers as part of a plan to reduce the average age of middle managers.

IDS said that it had “legitimate, non-discriminatory business reasons for terminating” the managers and added that some of the plaintiffs voluntarily retired or resigned.

“This settlement has been arrived at by a process of negotiations, without a long trial or lengthy appeal process,” said Karl J. Breyer, senior vice president and general counsel for IDS. “Moreover, settlement allows IDS to put the case behind us.”

IDS said it doesn’t expect the payment to hurt its third-quarter earnings because its business is good and because it set aside reserves for the case.

Plaintiffs lawyer Stephen J. Snyder said the settlement resolves all aspects of the litigation.

“We are very pleased that the parties were able to reach agreement and resolve this matter,” he said.

IDS, which offers such financial services as personal financial planning and life insurance, has been owned by New York-based American Express Co. since 1984. American Express was not named in the suit.

IDS employs 4,300 at its home office in Minneapolis, and has 7,000 financial planners around the country who work as independent contractors selling only IDS products. It has about 175 division offices, at least one in every state.