Controversies
In 1987 Unisys was sued with Rockwell Shuttle Operations Company for $5.2 million by two former employees of the Unisys Corporation, one a subcontractor responsible for the computer programs for the space shuttle. The suit filed by Sylvia Robins, a former Unisys engineer, and Ria Solomon, who worked for Ms. Robins, charges that the two were forced from their jobs and harassed after complaining about safety violations and inflated costs.
In the early 1990s, Unisys overcharged the US government and in 1998 was found guilty of failure to supply adequate equipment. In 1998, Unisys Corporation agreed to pay the government $2.25 million to settle allegations that it supplied refurbished, rather than new, computer materials to several federal agencies in violation of the terms of its contract. Unisys admitted to supplying re-worked or refurbished computer components to various civilian and military agencies in the early 1990s, when the contract required the company to provide new equipment. The market price for the refurbished material was less than the price for new material which the government paid.
In 1998, Unisys was found guilty of price inflation and Government Contract Fraud with the company settling to avoid further prosecution. Lockheed Martin and Unisys paid the government $3.15 million to settle allegations that Unisys inflated the prices of spare parts sold to the Department of Commerce for its NEXRAD Doppler Radar System, in violation of the False Claims Act, 31 U.S.C. § 3729, et seq. "he settlement resolves allegations that Unisys knew that prices it paid Concurrent Computer Corporation for the spare parts were inflated when it passed on those prices to the government. Unisys had obtained price discounts from Concurrent on other items Unisys was purchasing from Concurrent at Unisys' own expense in exchange for agreeing to pay Concurrent the inflated prices.”
Prior to 1993 Unisys paid Senator D'Amato's brother, Armand P. D'Amato for access to the senator. Armand P. D'Amato was convicted for mail fraud in connection with $120,500 he received from Unisys to lobby the Senator.
Unisys attracted attention in 1994 after announcing its patent on the LZW data compression algorithm, which is used in the common GIF image file format. For a more complete discussion of this issue, see Graphics Interchange Format#Unisys and LZW patent enforcement.
Unisys was the target of "Operation Ill Wind", a major corruption investigation in the mid-to-late-1980s. As part of the settlement, all Unisys employees were required to receive ethics training each year, a practice that continues today.
In 2003 and 2004, Unisys retained the influential lobbyist Jack Abramoff, paying his firm $640,000 for his services in those two years. In January 2006, Abramoff pleaded guilty to five felony counts for various crimes related to his federal lobbying activities, though none of his crimes involved work on behalf of Unisys. The lobbying activities of Abramoff and his associates are now the subject of a large federal investigation.
In October 2005, the Washington Post reported that the company had allegedly overbilled on the $1-to-3-billion Transportation Security Administration contract for almost 171,000 hours of labor and overtime at up to the maximum rate of $131.13 per hour, including 24,983 hours not allowed by the contract. Unisys denied wrongdoing.
In 2006, the Washington Post reported that the FBI was investigating Unisys for alleged cybersecurity lapses under the company's contract with the United States Department of Homeland Security. A number of security lapses supposedly occurred during the contract, including incidents in which data was transmitted to Chinese servers. Unisys denies all charges and said it has documentation disproving the allegations.
In 2007 Unisys was found guilty of Misrepresentation of Retiree Benefits. A federal judge in Pennsylvania ordered Unisys Corp. to reinstate within 60 days free lifetime retiree medical benefits to 12 former employees who were employed by a Unisys predecessor, the Burroughs Corporation. The judge ruled that Unisys "misrepresented the cost and duration of retiree medical benefits" at a time "trial plaintiffs were making retirement decisions and while it was advising them about the benefits the company would provide during retirement.
Also in 2007, Unisys was found guilty of willful trademark infringement in Visible Systems v. Unisys (Trademark Infringement). Computer company Visible Systems prevailed over Unisys Corp. in a trademark infringement lawsuit filed in Massachusetts federal court. In November 2007, the court entered an injunction and final judgment ordering Unisys to discontinue its use of the “Visible” trademark, upholding the jury’s award to Visible Systems of $250,000 in damages, and awarding an additional $17,555 in interest. Visible Systems claimed Unisys wrongfully used of the name "Visible" in marketing its software and services. The jury found the infringement by Unisys was willful. Visible Systems appealed the final judgment, believing the court wrongly excluded the issues of bad faith and disgorgement of an estimated $17 billion in unjust profits from the consideration of the jury.
In 2008 Joe McGrath stepped down after a no confidence vote from the board, and was replaced by J. Edward Coleman, former CEO of Gateway Incorporated. The president of the Federal sector Greg Baroni was also fired. Unisys announced on June 30, 2008 that the Transportation Security Administration (TSA) had not selected the company for Phase 2 of procurement for the Information Technology Infrastructure Program. In July, Unisys announced its plans to file a formal protest of the TSA decision with the Government Accountability Office (GAO). On August 20, the TSA announced it was allowing bidding from all competitors including Unisys and Northrop Grumman, who both filed formal protests with the GAO and protested TSA's decision to the Federal Aviation Administration's Office of Dispute Resolution, after not initially being selected.
2009: Unisys boasts about firing American workers; "We were able to eliminate a whole bunch of actually U.S.-based jobs and kind of replace them with two folks out of India" (Richard Marcello, president of technology, consulting, and integration solutions) The company completed a one-for-ten reverse stock split in October 2009, in an attempt to prop up stock prices and fend off delisting.
2010: Unisys jettisons Medicare processing Health Information Management service to Molina Healthcare for $135 million.
2012: Unisys Netherlands was reported to be censoring an employee for giving a presentation at Last H.O.P.E Number Nine. The presentation topic was concerning on-line censorship. The employee was threatened with termination for the presentation. Unisys responded to the new story by quoting a non-existent policy.
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