Contract Negotiations

Fellow Guild members:

We face a difficult situation.

On Monday, Dec. 21, Steve Kuchera, Dennis Comfort, Brandon Stahl, Darren Carroll (our International Guild rep) and I met with Ken Browall, Deb Williams, Carol Mossberger and Dominic Cicere (Forum’s labor attorney) to discuss the company’s request for concessions in 2010.

Forum has asked the Guild to relinquish the 1.5 percent pay raise its members were to receive in 2010 under the terms of the three-year contract we signed. The company also wants our union to give up the 401(k) match Guild employees are provided under the terms of the same contract. The pay freeze would save the company an estimated $45,750, and the 401(k) concession would save it another $31,000.

The package of proposed concessions would reduce your prospective total compensation next year by 3.5 percent.

We have been told that the Duluth News Tribune remains a profitable operation, but Forum has so far declined our requests to provide specifics on net income or to open its books.

Forum’s fiscal year began in October, and Publisher Ken Browall advised us that while the newspaper budgeted for a weaker performance than last year, the DNT earned 4 percent less than it had budgeted during the first two months of this fiscal year. He also said advertising revenues were down 21 percent during October and November 2009, as compared with the same two months last year.

Ken predicts 2010 will continue to be soft, prompting Forum to seek concessions from the Guild. Unrepresented staff members at the paper already have had their wages frozen and their 401(k) matches suspended. Ken said that if we agree to similar concessions, and raises subsequently are granted to non-union staff or 401(k) matches are reinstated, the Guild would see the same benefits return.

It should be noted that in September, when we learned of management’s plans to freeze the wages of supervisors, a team from the Guild stepped forward, approached Ken and said that if the company intended to seek concessions from us we were willing to talk. We let Ken know that we wanted to be actively involved in crafting any potential solution.

A couple weeks ago, the company advised us of the concessions it seeks. Both sides agreed to involve Darren Carroll and Dominic Cicere in the talks, as they had been useful players in putting together our current contract.

When we all met this past Monday, we were thanked for agreeing to talk about concessions and were told that the company remained open to hearing our ideas. We laid out some of our priorities – things we hoped to receive in return for the prospective concessions being requested or comparable cost reductions. These included:

• Protections against further layoffs for a period of one year.

• Language that would return our pay to prescribed 2010 contract levels on 1/1/2011.

• A one-year extension of the current contract through Dec. 2011.

• An agreement by the company to enter into non-binding discussions with the Guild to identify alternatives to staff reductions if any layoffs were deemed necessary outside of the defined period of job security.

• A provision that before involuntary layoffs could occur, staff in company-designated departments would be offered the opportunity to voluntarily step down and receive the severance package spelled out in our contract – one week of pay for every year of full-time service, up to 26 weeks.

After hearing our request, Ken, Dominic and their team asked to caucus privately to discuss our proposal. After an hour or so, we learned that Forum was not interested in entertaining any of our proposals. Management asked that we simply take their request for concessions directly to our membership, bypassing any negotiations between our two sides.

Guild leadership expressed its disappointment with this outcome but said the matter would be taken to the executive board for consideration.

Any modification of the existing contract would require a majority vote by our membership. This would be an unprecedented act in the history of our union. Never before has a contract been substantially modified midstream.

Forum offered nothing — not even a pledge to preserve jobs – in return for the concessions it requests.

However, as we’ve seen before, the company may resort to other means of cutting costs if its demands are not met.

What do you think should be done? We’ll be scheduling general membership meetings during the first full week of January to discuss the situation and plan a response.

The executive board would then take up the issue the following week. We welcome any and all dues-paying members to attend at that meeting, too.

We’ll have details to you shortly, and meeting times will be posted on the Guild bulletin boards.

Your voice is important. This is your union.

If you want to know more in the mean time, please direct your questions to me or to anyone else serving on the Guild executive board.

Thanks,

Peter

Colleagues:

The ballots have been counted, and our Guild membership has approved the proposed contract agreement, with more than 90 percent of votes in favor of the tentative agreement. I know this contract package leaves much to be desired, but I still believe that considering the current state of affairs, it's about as good of a deal as we could muster. I appreciate your support.

I also want to extend a special thanks to fellow members of the negotiation team -- Luke Donahue, Dennis Comfort, Dave Nevanen, and earlier in the process Gene Pelletier and Susan Bartz. Steve Kuchera, our lead negotiator, was instrumental in getting the company to move off its demands for two-tier pay and benefits, and for that, we all owe him a debt of gratititude. Darren Carroll, our regional TNG representative also deserves our sincere thanks for helping us put the company's proposals in perspective and for helping us form a prudent strategy.

We will continue our collections for the layoff relief fund through Friday (payday). We've had a generous response so far, but we've still not tapped out the Guild's pledge to match employee contributions dollar-for-dollar, up to $1,200. Thanks to those of you who have already reached out to help our six laid off sisters and brothers. For those of you who have yet to give, there are still a couple days left to go...

Appreciatively,

Peter Passi, President

The Guild and the company reached a tentative contract agreement April 29. While the agreement does not include everything we would have liked, it is better than a number of contracts we’ve seen recently at other papers around the country.

* Raises of 1.5 percent each year of the contract. The raise for this year is retroactive to Jan. 1.

* A new compensation plan for future Classification A sales reps where their base pay will top out at the fourth-year step. The plan, however, spells out in greater detail their goals and incentives. Current sales reps would remain under the current compensation plan.

* Future circulation district managers will be placed in Classification E. Current DMs will remain in Classification A.

* A limit on the number of interns the company may employee a year without Guild approval

* A health insurance plan where the employee-paid portion of premiums will not increase this year. In 2009, employees could pay up to 28 percent of the total premium cost for employee-only coverage; up to 37 percent of the total premium cost of employee-plus-dependent; and up to 42 percent of total premium cost of family coverage. For 2010, the maximum employee percentages are 30 percent of single; 40 for employee-plus-dependent; and 45 percent for family coverage. While these are greater increases than we would have liked, they are not out of line with what is happening elsewhere.

* The vacation and sick pay benefits will remain the same for new hires as what we currently have. This is a major victory. The contract proposal the company presented Tuesday morning included proposals to eliminate the bottom and top steps from Classification A for new hires. It also would have placed new hires on Forum’s old vacation and sick leave plans: meaning their vacation would be capped at three weeks (rather than the current four) and their sick banks would have been capped at 160 hours (rather than the current 720 hours). Stopping the implementation of a two-tier system of pay and benefits for so many Guild-covered employees is a big win. Protecting the interests of the people we represent – both now and in the future – is what the Guild is all about.

* A sideletter agreement that the Guild and company will work together to apply for a state training grant.

First, an update on what the company told us about the voluntary buyouts it will offer:

-- The company is still working out the details, but hopes to be done Tuesday or Wednesday.

-- The buyout will be offered to people whose age and years of service, when added together, equal at least 68.

-- Once the packages are offered, eligible employees will have between two and two-and-a-half weeks to consider the offer. The company is looking at a deadline of April 15 by which people will have to decide whether to accept a buyout.

-- People who accept a buyout will have 15 days in which they can change their mind.

-- People who accept a buyout will sign away their rights to file any other claim against the company. The only exception is worker comp claims.

-- People who accept a buyout will receive their money over a period of time, rather than in a lump sum.

-- The company still intends to reduce the workforce by 10 to 15 percent. Depending upon how many people accept buyouts, layoffs could begin in April.

-- There are 29 Guild-covered employees who meet the rule of 68 requirement; there are 57 employees building -wide who qualify.

Second, the company presented a conceptual contract offer – one spelling out in broad strokes what it wants, but lacking many important details. Under the company’s proposal:

-- Current Class A sales reps would continue to be paid as they are now, but future sales reps would be paid under a base-plus-commission system similar to what Fargo has.

-- Current employees would remain under the current vacation and sick leave plans.

-- Future employees would go under Forum’s old vacation and sick leave plans (not the PTO plan).

-- Employees would pay a higher percentage of the health insurance premium costs.

The company stressed that it wants to reach a settlement quickly and that it views two-tiers of pay and benefits as necessary to the company’s long-term financial health. Because of the lack of details in the company proposal, we were unable to respond to in any detail. We did tell the company that two-tier systems are divisive, bad for morale and will actually hurt the company by making it more difficult to recruit and retain qualified workers. We reiterated the Guild’s willingness to be flexible and work with the company to address valid business concerns. We concluded by asking the company to develop its ideas into a complete, detailed proposal. Our original proposal remains on the table.

We also asked the company to provide us with copies of the wage and commission plan it wants for future Class A sales reps so we can discuss it with our members before the next meeting of the company/Guild advertising subcommittee. We did not schedule another meeting but will after the subcommittee meets when the company's attorney and Darren Carroll, our TNG rep, are both available.

The troubles we have seen at other papers across the nation are about to hit home.

The company began on-the-records talks Wednesday by telling the Guild that, because of falling revenue, it is going to reduce the workforce by 10 to 15 percent – not just of Guild-covered employees, but throughout the building. Within perhaps as soon as two weeks, the company will offer a limited number of voluntary buyouts to Guild-covered employees (we don’t know what their plan is for other employees). There will be a fairly short time in which people can accept the buyouts. If the company is unsuccessful in achieving its staff-reduction goals through voluntary buyouts, management said it will resort to layoffs.

While the company hasn’t worked out the details of the buyout offer, it doesn’t expect to offer much more economically than what is called for in the contract – which is one week’s pay for each year of service. The contract sets a cap at 26 weeks of pay. It’s not clear if the buyouts will be capped.

In an effort to minimize layoffs, the Guild suggested the company consider offering larger severance packages. If the company determines it needs to lay off Guild-covered employees, the cuts will occur by classifications (not job title) within a department, in reverse order of seniority.

The same revenue numbers that prompted the company to cut its workforce also caused it to put a new proposal on the table Wednesday. The new proposal is more narrowly focused than its past proposal, but still lacks some specific details. Its main points are:

* Annual pay increases, if any, less than the 2.5, 2.5, and 2.75 percent the mailers received last fall.

* Current employees would remain under the current vacation and sick leave policy; new employees would go under Forum’s Paid Time Off policy.

* Having Guild-covered employees pay a greater amount of health care premiums, similar to the percentages the mailers accepted. The maximum percentages the mailers can pay in 2008 are: for single coverage, 25 percent; for employee-plus-one coverage, 34 percent; for family coverage, 37 percent. In 2009, the maximum employee share of premiums for mailers are 28, 37 and 42 percent (for the same three respective types of coverage). Guild-covered employees now pay 22 percent for single coverage and 30 percent for both employee-plus-one and family coverage.

* Continuing talks on changing the wage and commission plans for advertising account sales reps.

The company said it presented the narrower contract proposal in the hope of reaching agreement quickly. The Guild has several concerns with the proposal, including how PTO would affect employees, the insurance proposal, two-tier wages, and the advertising reimbursement issues. We spent much of the day discussing the proposal, and made several requests for more information. Our original proposal remains on the table.

We are entering some stressful times -- in my 15 years with the paper, I have only seen layoffs on a couple occasions. If you have questions or concerns, contact me, your Guild officers, or other members of the bargaining team. We are planning to schedule a membership meeting in the near future. We are also planning a meeting for advertising sales reps to discuss the bargaining issues that would affect them.