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Forklift plant workers reject union

A group of workers at the Mitsubishi Caterpillar forklift plant in Houston voted Friday to no longer be represented by a union.

Members of the Sheet Metal Workers International Association voted 210 to 174 to sever their connection with the union.

This decision came after little more than a year of futile negotiations between workers at the Mitsubishi Caterpillar Forklift America plant and management.

Union officials said the company never bargained seriously with the union since it was approved by workers in May 2002.

"They just showed up and made some proposals they knew we wouldn't accept and successfully drug it for a year," said Linda Morales, project director of the Sheet Metal Workers union in Houston.

Morales said the company proposed to cut wages 8 percent and increase health insurance costs by 25 percent.

Michael Clark, the chief negotiator for the company, countered that those numbers were only from its initial proposal and the union's first proposal was "astronomical."

"We feel we were bargaining in good faith," Clark said.

The union will consider filing unfair labor practice charges with the National Labor Relations Board.

 Copyright 2003 Houston Chronicle

Former Enron employees welcome Labor suit

By ERIC BERGER

Former employees and lawyers already suing Enron and its former officers for the devastating losses in company retirement plans welcomed the filing of a lawsuit Thursday by the U.S. Department of Labor.

Although it has been more than 18 months since Enron's stock became worthless, former workers said the legal action was better late than never.

And lawyers for the former employees in a class-action suit said having a government agency endorse many of the same legal theories will only bolster their case.

"We think that it's helpful the Labor Department is asserting many of the same claims we are," said lawyer Robin Harrison, who is trying to get the suit certified as a class action.

The Labor action mirrors the lawsuit in charging that former Enron Chairman Ken Lay and former CEO Jeff Skilling misled employees about the value of Enron's stock and did not properly monitor the committee appointed to manage Enron's retirement plans.

The lawsuit also targets the administrative committee for imprudently investing two-thirds of plan assets in Enron stock and not heeding warning signs as the value plummeted. Finally, the lawsuit says Enron's board of directors failed to appoint a trustee independent of Enron to manage the retirement plans.

"We're delighted that the department has endorsed our suit with their own and look forward to their assistance in helping to recover as much as we can for the Enron workers," said Eli Gottesdiener, another plaintiffs' lawyer.

The Labor Department has been investigating Enron's retirement plans since Nov. 16, 2001, about two weeks before the energy company filed for bankruptcy.

At issue are Enron's 401(k) plan, which had more than 20,000 members, and an employee stock ownership plan with more than 7,600. The plans held $2.1 billion worth of Enron stock in early 2001. The stock's value was $10 million a year later. Worth more than $90 a share at its peak in August 2000, the stock now sells for about 5 cents.

The lawsuit seeks to recover cash from the officers and directors for allowing the retirement plans to continue investing in Enron stock although they knew it was overvalued.

"Mr. Lay went so far as to tout Enron stock as a good investment for employees even after he had information on the accounting scandals," said Labor Secretary Elaine Chao at a news conference Thursday.

Lay's lawyers say the government is trying to suggest that he was responsible for decisions by the plan committee even though that responsibility lay expressly with the committee.

"The Department of Labor, for the first time in its history, is requiring a company to apply a new standard for evaluation of its own stock when held in a retirement plan," said Michael Birrer, a Dallas-based lawyer for Lay.

And a lawyer for the former directors, W. Neil Eggleston, disputes the charge that the board failed to appoint a trustee, noting that Enron had entered into an agreement with Northern Trust Co. to act as trustee for the plan.

The government lawsuit was filed in U.S. district court in Houston, where class-action lawsuits by the former employees and shareholders are already pending before Judge Melinda Harmon.

Lawyers in those cases expect the Labor Department lawsuit to also fall to Harmon, and to be attached to the current schedule of litigation, which is moving glacially. If the former employees' class-action suit, which has also targeted the large investment banks that worked closely with Enron, goes to trial, it would not begin until late 2004 at the earliest.

The biggest pot of money available is probably $85 million in liability insurance Enron had purchased for those responsible for Enron's retirement plans.

Elisa Hollis, a former software manager for Enron who has found a new job with a startup company, said any money would be nice, both from a financial and justice standpoint.

"I tend to be an optimist in general," she said. "I do hope someday to recover something. I don't realistically think it will be anything soon or all that much. But anything would be welcome."

Others said the action by the Labor Department, while appreciated, was overdue.

"Everything's been slow," said Rod Jordan, chairman of the Severed Enron Employees Coalition. "Is there a political reason behind it coming now? There may be. But all in all it's a good thing."

The Labor Department was poised to sue Enron in March 2002 but held off when the company agreed to hire an independent manager, State Street, for its retirement funds. But at a bankruptcy hearing the next month, Enron's creditors objected to paying the firm's fees, saying it was not a legitimate business expense.

After a year of argument and failed negotiations, a judge ruled in March that Enron could not be held responsible for State Street's $4 million annual fee

In a statement, the AFL-CIO, which has supported former Enron workers, said the lawsuit should have been filed much earlier.

"The delay points out the inadequacies of a system that fails to seek immediate remedies for working families who are the victims of corporate abuse," AFL-CIO President John Sweeney said.

The Labor Department maintains evidence for a lawsuit has only now become "compelling."

The agency said it is the result of a review of more than 2.5 million pages of documents and interviews with 110 witnesses.

 Copyright 2003 Houston Chronicle

Ironies rich in overtime brouhaha Federal employees seeking back pay

 By L.M. SIXEL

Employees who work for the federal agency that enforces the nation's overtime law are waiting for overtime pay they've got coming for working the cleanup of the World Trade Center.

It's not the first time the Labor Department has fouled up the time cards of its workers.

In November, the department was forced to pay $160,000 in back wages to 1,332 of its employees, including wage and hour investigators in Houston and other cities, after union officials discovered they had been shorted.

The department also promised in November to square up with the Occupational Safety and Health Administration investigators who worked around the clock monitoring the cleanup after the terrorist attacks.

But so far, most of the workers have not received all of their pay.

"Hey, you go out and tell employers how to pay overtime, yet you didn't pay your own people overtime," said Jeff Darby, vice president of the National Council of Field Labor Locals in Beaumont.

His union, which represents 8,000 Labor Department employees in offices outside Washington, D.C., uncovered the shortage and pushed for the payments

"They're so cavalier," said Scott Wilkinson, vice president of the National Council of Field Labor Locals in Manchester, N.H., who estimates about 100 OSHA employees worked at the site in the weeks after the terrorist attacks.

"What kind of example is this for the rest of employers who get caught owing back pay? When private sector employers don't pay, the Labor Department sues and gets double the wages."

Wilkinson said he intends to file a grievance next week if the money doesn't arrive, because the two-year statute of limitations in the overtime law will prevent the employees from receiving everything they have coming. And if a grievance is filed and upheld, the Labor Department will have to pay double in damages, he said.

Ed Frank, director of media relations, said the Labor Department is trying to calculate the unpaid overtime as fast as it can.

It has to be recalculated manually, he said, and he isn't sure about the amount owed or the number of employees involved.

Labor Secretary Elaine Chao is committed to paying "every penny" of overtime employees have coming to them, Frank said.

The Fair Labor Standards Act requires companies to include in their calculations of a worker's overtime pay the special wage rate offered for working odd hours or unusual days. It is sometimes called premium pay or shift differential.

If a worker is paid $10 an hour but is offered a $1 an hour shift differential, his overtime pay should be calculated using the $11 figure for those overtime hours worked during the premium shift.

At the Labor Department, investigators get a 10 percent premium an hour when they work between 6 p.m. and 6 a.m. and a 25 percent an hour premium when they work Sunday.

Wilkinson, a wage and hour investigator himself, knew the rules on overtime in the private sector.

So when he was working on an overtime arbitration case, he checked the rules of the Office of Personnel Management -- the agency that administers the wage and hour laws for federal government employees -- and discovered that the premium pay rules were identical to those enforced in the private sector.

"I'm not surprised, but it's extraordinarily ironic that the agency in charge of enforcing the overtime laws and calculating the correct amount for violations can't get it right themselves," said Joe Ahmad, an employment lawyer with Ahmad, Zavitsanos & Anaipakos in Houston. "This is the most fundamental law they enforce. If they can't get this one right, what can they get right?"

The case of the OSHA workers would be the third time in the last decade that the Labor Department has run afoul of the law on overtime.

A decade ago, Wilkinson said the agency paid $6 million in back wages to 4,100 investigators across the nation after an arbitrator ruled the agency had misclassified a group of wage and hour investigators as "administrative" and exempt from overtime pay.

The agency argued that the investigators, including employees who looked into complaints over wages, workplace safety, pension benefits and federal contract compliance, were exempt because they set policy and used a lot of independent discretion and judgment, recalled Wilkinson.

But the union argued and the arbitrator agreed, that the department didn't want its investigators making discretionary decisions about workplace violations.

They want everyone to use the same rules so the agency treats every employer the same way, said Wilkinson.

Frank said he did not want to comment on that award of back wages.

Ellen Kearns, an employment lawyer who specializes in wage and hour laws with Epstein Becker & Green in Boston, laughed when she heard about the exemptions that the department tried to claim in 1993.

That same year, the department under former Secretary Robert Reich took "great delight" when it sued the state of New York and argued -- successfully, as it turned out -- that the state police were not exempt from overtime laws The state ended up paying back wages to the investigators, she said.

"It sounds like the Department of Labor is being hoisted on its own petard," said Kearns, who is also editor in chief of the Bureau of National Affairs' publication, Fair Labor Standards Act.

"They didn't seem to have any qualms going after the state of New York," she said.

Darby, who is on leave as a wage and hour investigator while he handles union business from his basement office of the federal building in Beaumont, said he sometimes can't believe that he has to fight overtime issues at his own agency.

"I keep thinking how ironic life is."

 Copyright 2003 Houston Chronicle