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A failure to communicate

Stalled labor negotiations lead to public dispute, rally

By Lori Lindner
North Liberty Leader
NORTH LIBERTY– While workers have returned to their positions at South Slope Cooperative Communications, they have done so under a company-crafted contract that has not been adopted by the workers’ union.
The lack of a negotiated agreement has created mounting tensions between union bargaining representatives and management since the previous contract expired at midnight on Oct. 31, 2013.
Last Thursday, Jan. 23, employees organized a rally and press conference at the North Liberty Community Center, to bring public attention to the situation.
According to Kay Pence of the Communications Workers of America (CWA) union, bargaining representatives held a series of meetings to negotiate a contract, with the last session scheduled Oct. 22, 2013. At that time, Pence said, the company had not yet made an initial wage proposition, but their “regressive” proposals remained on the table.
Another meeting with a federal mediator occurred Oct. 28, at which time South Slope made its last, best and final offer. It included terms the union bargaining team found unacceptable.
“I asked if they wanted us to take it to a vote, and they said yes,” Pence said. “I said ‘you understand it’s going to be voted down?’ I asked them if they wanted to extend (the existing contract), but they were not willing to extend. I told them we were willing to work without a contract until it could get resolved, but they were unwilling.”
From that date, the earliest the union could organize a vote for bargaining unit employees was Nov. 3, two days after the contract expired.
With no contract in place, said CEO Justyn Miller, South Slope was forced to enact an employee lockout Friday, Nov. 1. After the ratification vote, employees were allowed to return to their positions on Monday, Nov. 4, and have been working under the new contract proposed by South Slope, which include a one percent wage increase for management and all employees represented by the union, in addition to added vacation based on years of service, an additional paid holiday and a fully-funded pension program.
At issue is a proposal for lower wages for new hires, and concern over pay cuts for employees who transfer to a different position in the company.
All aspects of the situation– the negotiation process, the terms of the contract, and the perceptions of communication between management and bargaining unit employees– have been fraught with discrepancies and public rebuttals from both sides.

Contract negotiations: who gave up first?
First, while Pence stated the CWA’s request to extend the contract was refused, South Slope maintains it never received a formal request from the CWA to extend the previous contract. When asked whether documentation of the request for a contract extension existed, Pence replied that it was a discussion between herself, the federal mediator and South Slope’s attorney.
“No written request was sent after the verbal rejection,” Pence said.
Second, CWA stated South Slope proposes a 30 percent wage reduction for new hires who would do equal work for less pay than their tenured counterparts. Opponents fear this would erode company morale and negatively affect retention.
“We are facing a future where new employees working alongside us never make what we do, yet will be expected to provide the same level of exceptional service we are so proud of,” said 13-year South Slope employee and bargaining representative Matt Holub.
What is not disputed is that South Slope did propose a second, lower tier of pay for future employees, based on a survey of wages for similar positions across the telecommunications industry at state and national levels. According to South Slope board of directors president Michael Schanz and data charts posted on the company’s website, South Slope bargaining unit employees are in the 90th percentile in their wage scale for similar positions around the state, and management employees fall somewhere around the 75th percentile. The board approved the decision to create a second wage tier in order to help keep the company financially viable in the future.
“We view the proposed changes as an opportunity to keep great jobs in the community by making sure South Slope continues to be competitive, while maintaining the excellent level of service our members deserve,” said Miller.
But in a press release last week, Pence stated the data presented by South Slope included no sources, and none were supplied upon request.
Last week, opponents of the proposal held up the company’s IRS 990 forms to support the position that the company is fiscally strong.
“Annual reports have been optimistic. We examined IRS 990s; we did not have access to any other company records,” Pence said. At the bargaining table, she added, CWA asked if the cooperative was proposing the lower wage scales and other changes because of financial difficulties or inability to pay.
“They said no,” Pence said.
However, the company’s fiscal strength is a bigger picture than can be encompassed by a single bottom line, said 15-year South Slope employee James Serbousek in an interview last week. Serbousek is also a bargaining unit employee– one who is equally represented by the CWA– and he has publicly expressed support of South Slope’s policies, management and climate.
“The industry is changing so quickly; when I started, over 80 percent of our revenue came from our long distance service,” said Serbousek. South Slope began offering Internet and wireless phone services to adapt to industry changes, which included the Federal Communications Commission practices allowing big long distance companies to use the cooperatives’ services without paying their fair share. Increased consumer use of cell phones over landlines and several changes in FCC regulations has impacted revenues. It’s also difficult to earn profits on television service after paying exorbitant fees to cable network channels for their programming.  All of these changes have taken a financial toll, Serbousek said.
Planning for the future, South Slope has been making extensive investments in infrastructure by installing fiber optic networks that provide faster, more reliable services to the communities it serves, a necessity for the company to remain competitive in today’s technology-saturated world.
“Unless you understand the industry and the complete financials of the company and future debt obligations, you can’t say there is excessive money on the books,” said Serbousek, an Internet Technology administrator. “We have customers who need the fiber and the company has to plan accordingly. Justyn has been looking at those investments in terms of the company’s future. I want customers to be happy with their service, and I also want me and my fellow employees to still have a job in 20 years.”

CEO’s wages in dispute
Union representatives also stated last week that CEO Miller increased his own salary by 20 percent in one year, going from $187,372 in 2011 to earning $225,463 in 2012.
North Liberty attorney Paul McAndrew, who specializes in workers’ compensation law, addressed the crowd at last week’s rally on the issue.
“I am proud to be part of the co-op,” said McAndrew. “Because it’s a non-profit, it is expected that profits would be reinvested in this co-op, returned to members as dividends, or used to compensate their skilled workers. We’ve had good service, but I did not expect that profits would go to the CEO or to compensate board members.”
However, those numbers represent just part of the picture, Miller said, and are creating misperceptions. Miller does not negotiate his own salary or benefits package, as they are set by board action and follow the same rural broadband guidelines as all other South Slope employees. Further, he was CEO for only nine months in 2011; therefore, the comparison is between nine months of CEO salary and 12 months, artificially inflating the percentage of increase.

Wage protection for current employees
Also debated is the proposed contract language regarding employees who transfer to new positions within the company.
CWA representatives say there is no pay security for workers who transfer.
“Justyn Miller has refused to meet with us face to face at bargaining even once, instead directing outside legal counsel to take extreme and unacceptable positions on his behalf,” said Holub. “These positions include proposals to cut future hires wages by 30 percent, and no guarantee that current employees would not face these same cuts if they were to move to a new position.” He added that working under the new contract, employees are now “going backward as a result, losing our Monday through Friday regular work week, losing minimum call-out pay that was traditionally used to compensate employees who sacrifice time off to quickly respond to service emergencies that occur day or night, and facing insecurity where all of us are at risk of a 30 percent pay cut any time we are transferred to a new position.”
Miller has refuted that concern more than once, stating in letters to employees and members and on the company’s website that South Slope specifically wrote pay protection into the contract to ensure existing employees would not have a reduction in pay, as did board member Schanz.
“Only new employees or those who (voluntarily) bid to a lower paying position (e.g., janitorial position) would receive lower wages in the new tier,” Schanz wrote.
Miller concurred.
“South Slope wrote pay protection into the contract for our current employees. We asked the union to provide alternate language if the current pay protection language was not acceptable,” Miller said. “We have not received a response regarding contract language changes since Nov. 8. South Slope was always willing to discuss the contract with a federal mediator present, but the CWA and outside unions chose to run a smear campaign against the company instead of working toward a mutually beneficial solution.”
Information obtained by the Leader last week shows the contract does include pay protection language– at least four times– for employees hired before Nov. 1, 2013: employees selected for involuntary transfer will retain their current wage rate plus any future step or contract wage increases; employees temporarily transferred to a lower paying job will retain current wages; employees transferred to a higher paying job previously held will be paid based on the old tier plus months of service; and employees will be pay-protected if bidding to a higher paying job.

An ironic breakdown in communication
The most recurrent complaint heard at last week’s rally by union representatives and employees was that of deteriorating communication between South Slope’s management, board members, and workers.
“Management has thoroughly failed to establish a productive working relationship with those of us who act as elected bargaining representatives in our workplace,” Holub told the crowd of about 65 “For the first time in the 11 years that I’ve been involved with contract bargaining, we’ve encountered stalling, obstacles and refusals to share information in our attempts to negotiate a new labor agreement. ” After the meeting, Holub elaborated.
“In the last couple years, management has separated themselves from the working guy in the company. They brought in a consultant under the pretense of morale building, which is actually a union busting consultant,” said Holub. He said when Miller first came to the North Liberty location, Holub encouraged him to be a strong leader.
“I told him he had a great opportunity to do something wonderful with this company and bring morale up, and we have not seen that. This negotiation process has really driven a wedge between us,” Holub said. “During our biweekly meetings, management gets a soapbox to speak their minds and the rest of us don’t get to say anything.”
That’s a perception Serbousek adamantly disagrees with.
“I find it hard to believe when employees say they don’t have a voice,” he said. “That is the exactly opposite of the truth; employees have a larger voice than ever. We have been encouraged from management to share all feelings– good, bad, and indifferent.”
Serbousek said in March 2012, employees participated in a company-wide survey that was used to determine the strengths and weakness of South Slope. “This was the first time all employees were given a chance to really share how they felt. This was a vision of the CEO and his senior management team.”
The surveys helped to create action teams to focus on three key areas for improvement: increased efficiency, performance management, and team communication. All employees were allowed to be part of an action team, and at least four bargaining unit employees were included on each team.
The company has since implemented such measures as increased employee empowerment for decision-making, additional paid training opportunities, a new employee review process, quarterly staff recognition breakfasts, an internal Internet page with company-wide updates, and small group sessions that bring together employees from all parts of the company to have lunch with Miller and an opportunity to discuss the company in a unique way.
“I would say that is pretty good input in the company’s direction that we never had before,” Serbousek said.
As for being available for contract negotiations, Miller said he is not part of the bargaining team; most CEOs are not, as their presence in that process would be frowned upon.
“We have offered to meet, but there are various rules put in place by the CWA,” said Miller. “The CWA does not like management to address employees represented by the union, because they feel we would be bargaining with members directly.”
Similarly, Miller’s presence at the rally was deemed unwelcome last week, although Miller said the meeting was advertised as being open to South Slope members, employees, and community members, and not specifically a union-organized event, so he attended with the intent of making himself and other management employees available for questions and conversation.
Tracy Leone of the Iowa Federation of Labor, AFL-CIO, was not impressed.
“Management’s presence at this union-sponsored event constitutes illegal surveillance and intimidation of employees engaged in legally protected concerted activity,” Leone stated. “On behalf of affected South Slope employees, the CWA is pursuing additional unfair labor practices charges against South Slope and the managers present.”

Who represents whom?
Other speakers maintained that co-op members who contact board members to ask questions are getting stiff-armed at those attempts as well.
“After learning the truth about what management has been up to at this co-op, many customers like me have contacted board members to tell our concerns,” said attorney McAndrew. “Many have asked where the board would meet next, and we’ve been told it’s none of our business. Many have asked when the next elections for board members are, and we’ve been told nothing.”
As a practice across most industries, company board meetings are held in private; South Slope’s board of directors has always met without members present except for the required annual meeting, Miller said.
The date for that meeting has not been set, Miller noted, because the company’s 2013 financial statements have not been completed. A change in South Slope’s billing system has brought delays, but as soon as the information is prepared, notice of the annual members’ meeting with the board will be sent as usual, including information on the next election date, expiring board members’ terms, and the nomination and election process to fill those seats.
McAndrew also noted that provision in the company by-laws allow for a board of up to 15 members.
“Maybe it would be time to expand that board to take in a broader perspective, perhaps one more oriented to the common people who make up this co-op,” McAndrew added.
His declaration and others against South Slope’s management practices brought rounds of applause from the audience, but Serbousek and fellow employee Amy Crock are equally displeased with the way CWA has represented them as bargaining unit employees.
Serbousek said many of the claims made by CWA representatives in the media recently are misleading or factually incorrect; statements that the lockout occurred after the contract was voted on, and that employees could be forced into lower-paying jobs, for example.
Crock’s concerns are even more troubling to her. Crock, with 19 years of experience in the telecommunications industry, said she was shocked to learn that a complaint had been lodged by the CWA on her behalf– a claim she had no knowledge of, nor concerns about.
“The CWA union had reported that I was working extra hours against my will and without pay or compensation. This was a complete surprise to me, as any overtime I worked was approved by management and I was punched in. It was my choice,” said Crock. “Furthermore, this concern was not discussed with me, or my next two levels of management by the individual who made the report, or by the CWA before going to South Slope.”
Crock said she felt the action was a slap against her and her direct management, who has always supported her.
“I was hurt, angry and confused– how did this get all this way without talking with me?”
Pence said she had no knowledge of any complaint filed on behalf of a union member without their knowledge, but said she is always available should employees have concerns. “The local has monthly union meetings where people can raise concerns. Or employees can contact a steward or officer outside of work; they are not allowed to discuss union issues during work hours,” Pence said.
It is just another sidebar in the increasingly complex story that has unfolded in the last two and a half months between a company and a union; a sad story at that, Crock indicated.
“When the CWA held the press conference and was not even taking questions from those assembled, or allowing those accused to publically answer in that setting… that was hard to see,” Crock said. Crock finds it ironic that while discussion is everyone’s stated goal, nobody’s really listening anymore.
“Repeatedly, I heard statements from fellow co-workers and CWA members that their concerns were not being heard. There was the perfect opportunity, but they shut the entire discussion down after they made their rally statements. They didn’t even give Justyn or fellow employees the chance to ask questions or answer accusations.
“It’s been a hard atmosphere to get footing in on the conversation,” Crock concluded.
Another bargaining meeting was held Monday, Jan. 27. Pence said she was optimistic afterward.
“I think the company is beginning to understand how existing employees could be harmed by the new two tier wages,” Pence said in an email Monday. “We made some progress and agreed to recess. We expect to continue discussions but do not have a date set.”
South Slope representatives said that at Monday’s meeting, the company worked with the union to better define pay protection for current employees and address non-paid time off, employee recall, and various other issues.
“South Slope remains confident that a solution can be negotiated and hopes the union will continue to make efforts to negotiate in a timely manner,” Miller stated.