Stating the company’s financial situation is “difficult” and “needs to continue restructuring to reduce expenses and create sustainable businesses,” impreMedia sent a memo to El Diario employees saying it had to eliminate 7 Guild-represented positions at the paper.
In the memo dated December 2, the company offers a “voluntary resignation” package to Guild employees who willingly come forward to take the buyout before resorting to forced layoffs.
In an interview with Media Moves, CEO Francisco Seghezzo says this is a necessary measure to reduce overhead costs in the midst of a financial crisis.
“In the past year and a half impreMedia has laid off 100 employees. We still have a very heavy infrastructure. If we don’t make the necessary cuts, we won’t be able to continue operating,” he says. “We have no plans to shut down the company. We’re just trying to implement new business development strategies that will help us move the company forward.”
The “voluntary resignation” package, which was negotiated with support from the NY Guild, includes severance pay of one week of base salary for each six months of service and between 4 to 8 months of company-paid medical insurance benefits, based on how long each person worked at the company.
The deadline for the offer, which is limited to the editorial, sales and administration departments is December 16. The company reserves the right to reject any volunteer.
“We can’t have all the volunteers come from just one department,” Seghezzo points out.
If not enough volunteers come forward, the company will choose who they will let go by the end of the year. NY Newspaper Guild President Bill O’Meara negotiated the voluntary resignation offer with impreMedia management.
“It’s in nobody’s interest to have El Diario or impreMedia go out of business, but we have to protect the rights of our guild members,” says O’Meara. “We examined their books. We understand both El Diario and impreMedia as a whole are in a precarious financial position. We offered to work with them, but they haven’t been 100% cooperative, especially when they arbitrarily laid off guild members earlier this year.”
O’Meara refers to the 8 guild workers he claims were illegally terminated in June, violating a settlement agreement coordinated by the National Labor Relations Board after the union filed an unfair labor practice charge against ImpreMedia.
An NLRB regional director issued a letter on November 24 indicating it has found:
- “reasonable cause to believe that Employer, through Vice President Juan Varela… threatened employees with discharge for supporting the Union”
- impreMedia violated the union contract by firing 8 Guild employees and replacing them for non-unit employees “to perform essentially the same work”
- impreMedia is in default of the May 9, 2014 settlement agreement with the NLRB
The NLRB has given the company until December 9 to “remedy” its default, otherwise it will issue a complaint, which will then send the case before an administrative law judge for a ruling. That will probably happen sometime early next year.
The remedy, says O’Meara, is the reinstatement of the Guild employees fired in June, should they want to return to their jobs, or a monetary settlement.
“I don’t like to see anyone lose their jobs, but unfortunately, given the financial circumstances, the new people may have to be displaced.”
If the Guild employees opt out of returning to El Diario, O’Meara says the new workers will have to be included in the bargaining unit: “The company is trying to circumvent the Guild contract by making new hires through impreMedia. But if a reporter working for impreMedia is doing the same work Guild people do and that person’s work is showing up in El Diario, then they have to be covered in the union contract.”
Seghezzo insists the company has been abiding by the terms of the contract. He categorically denies the company is involved in any union-busting actions.
“We’re trying to build a future for the company in accordance with the contracts we have with all our employees in mind, including those in the Union.”
Seghezzo says their current business plan doesn’t call for further layoffs for the rest of the year, but admits he doesn’t know if there may be the need for more cuts in future months.
impreMedia currently has about 230 employees company-wide.
The Guild contract with El Diario expires in 2015. O’Meara says negotiations are set for early next year. “I’m sure they’re going to be very difficult.”
** Disclaimer: I worked for impreMedia Digital as the West Coast Web Editor until May of 2014 and was one the employees laid off by the company.