Union-Tribune fights unemployment claims

The Union-Tribune’s Christmas Massacre of December 2007 is still producing bloodshed. The Copley Press, aided by a high-powered consulting firm, is contesting unemployment claims filed by a small group of ex-employees who took a buyout after concluding they would be fired.

There is mayhem throughout the newspaper industry, but there seem to be few precedents for what the U-T is doing. “I have not been made aware of other employers fighting unemployment claims,” says Linda Foley, president of the Newspaper Guild in Washington, D.C. What Copley is doing is “unusual, and it’s unusually cruel. This is not a worker-friendly industry, especially at the moment. This is a new level of cruelty. It’s just mean.”

Bernard Lunzer, secretary-treasurer of the national guild, says, “This is the first I have heard of this issue. I am not aware of companies hiring outside firms to resist unemployment [claims], but it could be happening. It is certainly wrong.”

Copley’s motivation is most likely economic. Employers pay into unemployment pools, but a company tapping the system more frequently has to pay more, rather like the way a person responsible for an auto accident has to pay higher insurance premiums. However, the ex-employees are puzzled, because there are probably fewer than 20 who are still trying to get unemployment compensation that they feel is owed them. Possibly the company is planning more buyouts and layoffs. That would hardly be surprising. It may be another indication that ownership is trying to slash costs to sell the company. Also, since the Copley Press has been known for its hostile employee relations, some think spite may be a motivation.

To help contest the unemployment claims, Copley hired TALX UC eXpress, a major unemployment cost management firm. “In 2003, we removed over $6 billion in unemployment claim liability and recovered $240 million in erroneous charges for our clients,” the firm boasts on its website. The company, which is a unit of Equifax, says that it is expert in saving companies money in insurance related to unemployment claims. Neither Copley nor UC eXpress responded to requests for comment.

The warfare began December 3, 2007, when the company suddenly announced a “Voluntary Separation Program,” warning that it needed to cut costs and this was just one step in the process. The company listed the number of jobs it wanted to eliminate (for example, nine news reporters would be axed) and said that if enough volunteers didn’t take buyouts, there would be layoffs, which there ultimately were. There was this verbiage in a “frequently asked questions” sheet: “Will I be eligible for Unemployment Insurance through the State?” Answer: “Unemployment is between you and the state. However, in our past experience with a ‘voluntary’ separation, people have not received Unemployment.”

Employees knew that that statement was at best only partly true. At year-end 2006, employees with 30 years of service had taken voluntary buyouts; there had been no target list, as there was in 2007. Several who were too young to take retirement packages took their buyout packages and months of unemployment compensation without the company complaining. “A personnel official even showed them how to file for unemployment online. The blank for ‘Reason for Leaving the Company’ read ‘Workforce Reduction,’ ” recalls a former employee. When the Union and Tribune merged in the early 1990s and there were buyouts, “the company repeatedly said it would not stand in the way of unemployment benefits,” says an ex-employee.

When pondering the 2007 buyout offer and whether they would qualify for unemployment compensation, employees did their homework. One found in the State’s regulations that for a termination to be deemed voluntary, the unemployment claimant must be the “moving party, or the person who places into motion the chain of events that is responsible for the termination.” That was hardly true of employees who were handed the Hobson’s choice December 3. Still, the Employment Development Department kept telling this employee loudly and rudely that the termination was a “voluntary quit.” But “I don’t believe it’s a voluntary quit when the company walks you to the edge of the gangplank and says, ‘Here is your choice: jump or be pushed,’ ” says this former employee, who received some unemployment payments and was forced to return them and pay a 30 percent fine. (A young, low-level employee, who got a pittance for a buyout, allegedly got three checks for $450 each, then was told to return them along with a 30 percent fine. I wasn’t able to reach that person.)

Because the company specified how many heads it wanted chopped, “Clearly we were targeted; it was clearly a forced workforce reduction, but that was not satisfactory to the [Employment Development Department],” says another, who didn’t fight after being turned down by the State.

Craig Rose, an excellent business reporter, had been on a 2004 list of 48 employees who might be laid off if the economy worsened. (The list was supposed to be secret, but few secrets are kept from newspaper people.) “I felt I was targeted,” he says. “This was a forced layoff; when you preannounce that you are eliminating people, how is that not a layoff?” Rose, filing a one-week claim, was told that his was a voluntary departure. He has not heard on his appeal. He has landed a good job with the City Attorney’s Office and says the appeal is mainly a matter of principle. Rose refuses to discuss his severance package.

“I worked my heart out for that newspaper, and now they’re persuading the State to deny us unemployment compensation,” says a longtime reporter. “I’ll never wear my Union-Tribune watch again.”

Peter Zschiesche, director of San Diego’s Employee Rights Center, says the State normally looks at a buyout as a voluntary quit, “but there is a precedent decision that basically lays out that this has to be looked at on a case-by-case basis. Nothing fits all. You can get unemployment under a voluntary quit if there is a compelling reason.” On behalf of former employees, Zschiesche presents that compelling reason to an administrative law judge. The Employee Rights Center now represents a handful of ex-Copley employees and may take on more.

Chet Barfield, who covered Native American affairs and casinos extremely well for many years, is one that Zschiesche thinks has a good case. A year before the December Massacre, Barfield was reassigned to cover neighborhood stories. “They certainly didn’t need somebody with my experience or expertise to do these stories,” says Barfield. “I was a senior person near the top of my pay scale” and in a job for which he was overqualified. “A year earlier, when I was Indian affairs specialist and knew more about the tribes and casinos than others, I would have been less vulnerable,” he says. But in the December Massacre, “The company had made it clear that it was trying to save money,” so he figured he had more than a 50 percent chance of having his head lopped off. He is unemployed and has applied for jobs with no offers. He appeared before an administrative law judge on Tuesday, April 8. There has been no decision, but he is not optimistic. UC eXpress was not at the hearing, although it was listed as a party. Barfield’s impression was that he was fighting the Employment Development Department more than he was fighting the Copley representative.

The explanation for the fierce battling of unemployment claims may be that Copley and the State of California are both on the financial ropes. But so, too, are those who took the buyouts with a gun to their heads. Even those who got a year’s pay did not reap a windfall. Rose notes that newspapers “were a lucrative industry for the better part of a century; they should share a piece of the proceeds.” But Copley has never seen things that way.