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    Highlights for week ending August 16, 2003
  • Los Angeles Times: Ruling Casts Doubt on Pension Change. Excerpts: The repercussions of her (Kathi Cooper's) case come as a bit of a shock to the widowed grandmother who started it all. Cooper says she's not a crusader. When she filed suit against IBM in 1999, she was just a middle-aged, mid-level worker who felt she was getting shafted by a company cost-cutting move. She sued her employer because she was too old to make up for pension benefits she was about to lose — and too good at math not to figure that out. "There comes a time in your life when you realize you are out of runway," she said. "You have no alternatives." ... Court filings in Cooper's case indicated that IBM expected to save $500 million a year by converting to a cash-balance plan. Cooper said she and other older IBM workers couldn't afford to have that savings come out of their pockets. Until the penalty phase of the trial is complete, Cooper won't disclose how much the cash-balance conversion cost her. But the loss was significant, she said, and was indicative of the huge toll such plans can take on older workers. If link is broken, view Adobe Acrobat version [PDF--37 KB].


  • Cincinnati Enquirer: IBM plaintiff asks for calm. Pension ruling's impact may be big. Excerpt: Both sides are exaggerating the impact of the recent federal court decision that overturned two pension plan changes IBM made in the 1990s, says the employee who served as lead plaintiff. "This wild speculation, whether it's on the defendants' part or the class's part, should stop," said Kathi Cooper, the 52-year-old Illinois woman whose pension benefits were dissected by lawyers during the court case. Cooper spoke by telephone from her mother's Illinois home, where she sought refuge late last week from the phone calls and e-mails that inundated her after the July 31 court ruling that IBM violated a federal age discrimination law that protects workers 40 and older.


  • New York Times: A Lump-Sum Threat to Pension Funds. Excerpt: When the government took over the pilots' ailing pension plan at US Airways earlier this year, some of them lost thousands of dollars of benefits and the ability to take their money as a single payment. So pilots at Delta Air Lines were already on edge about their pensions when they learned that their company was taking the precautionary step of putting aside tens of millions of dollars to fully fund a retirement trust for dozens of top executives. The Delta pilots have a pension fund, too, but theirs is now in the red. "One of my friends called me up and said: `We've got to think about retiring, don't we? These people could just bankrupt the company and leave us alone,' " recalled Capt. Dave Davis, who is 56. After thinking it over, he told Delta that he would retire on Sept. 1, a little more than three years early, and take as much of his pension as possible in cash immediately. If link is broken, view Adobe Acrobat version [PDF--38 KB].


  • The Congressional Research Service just put out a new report on cash balance plans. Excerpt: As more employers have converted their traditional pensions to cash-balance plans, two issues of particular concern to many pension plan participants have been (1) employer practices in disclosing the impact of the pension conversions and (2) the effect of conversions on older and long- service employees." Read report, courtesy of Benefits Link [PDF--27 pages].


  • Binghamton Press & Sun-Bulletin: EIT ordered to reinstate employee. Judge: Man had a reason to defend union in public . Excerpt: An Endicott Interconnect Technologies employee who was fired for making disparaging comments about the company on an Internet forum was ordered reinstated with back pay, interest and benefits by a National Labor Relations Board judge, who said the remarks were protected as part of his union organizing activities. ... Endicott Interconnect was also ordered to halt "discharging, warning, threatening or otherwise discriminating against its employees for engaging" in union activities. A representative of the union organizing effort, Alliance@IBM, said the ruling represents a complete victory for the union movement at IBM Corp. and Endicott Interconnect. "We always believed that Rick was fired for organizing activities at EIT and this ruling just reinforces that belief," said Lee Conrad, a former IBM-Endicott worker who now works full time trying to organize workers at IBM and Endicott Interconnect.


  • Reuters: Work Stress Taking Larger Financial Toll. Excerpt: In the 1999 movie "Office Space," stressed-out workers crammed in cubicles and belittled by incompetent bosses plot to break out of their bored existence. One smashes the permanently jammed photocopy machine and another finally loses it and burns down the office. ... The European Agency for Safety and Health at Work reports that more than half of the 550 million working days lost annually in the United States from absenteeism are stress-related and that one-in-five of all last minute no-shows are due to job stress. "We estimate it (stress) costs American industry $300 billion a year in terms of diminished productivity, employee turnover and insurance," the AIS's Rosch said. ... An International Labor Organization study showed that Americans worked the equivalent of an extra 40-hour week in 2000 than 10 years before. Americans work almost a month longer than the Japanese and three months more than Germans, it said.


  • Communications Workers of America: IBM Workers Hail Court Ruling on Pensions. Excerpts: "The pension plans were changed to boost the bottom line and increase executives' bonuses, while hurting loyal employees," said Linda Guyer, president of Alliance @IBM/CWA Local 1701. "We are now finally seeing some justice for employees who have worked hard in their long careers at IBM." ... "This significant victory is proof of the power of employees working together for justice and fairness,' (Kathi) Cooper said. "This is a great day for IBM employees. I want to thank everyone that supported this case, our attorneys, IBM employees, friends of the case and the Alliance @IBM. It makes me proud to be an Alliance member."


  • Daily Herald (Suburban Chicago): Lucent retirees fight to keep benefits. Excerpt: group representing thousands of retirees from Lucent Technologies claims a proposed rule by the Equal Employment Opportunity Commission would eliminate company-provided medical benefits for those eligible for Medicare. The Lucent Retirees Organization also claims the same federal agency designed to protect people is actually discriminating against those 65 and older. "The commission's proposed rule will ensure Medicare-eligible retirees, who currently have employer-sponsored health benefits, will lose such benefits. This is particularly egregious with respect to retirees who currently enjoy prescription drug benefits from the companies they helped build," Ken Raschke, president of the Lucent Retirees Organization, said Monday.


  • Corporate Board Member: How to Tell if Your Company’s Pension Plan Is Sinking.


  • Janet Krueger answers the question "Can anyone explain what the ruling does for subclass 3 and people who were hired before 1999 but left (in my case laid off) before they reached their 5 years? (I was only weeks days from eligibility for the bridge to vesting the 5 years)." Ms. Krueger's answer (full excerpt): One of the charges made in the case is that because IBM changed the plan so drastically in 1999, they did a partial plan termination. Under ERISA, all employees become immediately vested when a plan is terminated, in whole or in part. This would mean that you were vested when you left, and you should have received a payout for the 4+ years you worked for the company. Please note that this is one of the charges that Judge Murphy said needed to go to trial -- he did not rule on it yet.

    The number of employees IBM has laid off just short of the 5 year vesting mark is astounding -- clearly, IBM is doing everything in their power to minimize pension payments. (Plus it makes the average age on lay-offs look better, but you were averaged in with all the people who were laid off just short of reaching full retirement eligibility under the old plan). Does that explain things?

Coverage on H1-B and L1 Visa and Outsourcing Issues

  • Palm Beach Post: U.S. exporting 'good' jobs to India. Excerpt: A decade ago, a wag famously warned of the giant sucking sound from Mexico, which threatened to steal America's working-class jobs. Today, the giant sucking sound comes from a different spot on the globe, and it menaces a different type of worker. India increasingly is landing high-skilled, highly paid positions for engineers, accountants and financial analysts formerly employed in the United States. ... No CEOs or CFOs have outsourced their own positions to lower-paid executives in India. But this job shift is striking because it reaches so high up the corporate ladder, hitting the formerly cushy ranks of white-collar corner offices. Your job could be next. Among the outsourced are computer programmers, engineers, accountants and financial analysts, not to mention thousands of less-skilled workers who answer phones at call centers.


  • Kansas City Star: U.S. workers forced to train foreign replacements. Excerpt: Scott Kirwin clung to his job at a large investment bank through several rounds of layoffs last year. Friends marveled at the computer programmer's ability to dodge pink slips during the worst technology downturn in a decade. But it was tough for Kirwin, 36, to relish his final assignment: training a group of programmers from India who would replace him within a year. ... Tech bellwethers including IBM, Hewlett-Packard, Cisco Systems, Oracle and Microsoft use L-1 workers but won't disclose how many they import. Many bring in workers through consulting firms, usually Indian companies such as Tata Consultancy Services, Infosys Technologies and Wipro Technologies.


  • BusinessWeek: Commentary: Outsourcing Jobs: Is It Bad? An accelerating pace is raising concerns over its effects. Two BusinessWeek economists debate whether that's good or bad. Excerpt: These are anxious times for U.S. workers. Sure, the recovery seems to be getting under way. Yet hardly a week goes by without another report of a batch of high-paying, white-collar jobs getting exported to far cheaper locales such as India, China, or the Philippines. In mid-July, IBM set off a firestorm when news of its plans to move more white-collar jobs overseas was leaked to The New York Times. And news service Reuters announced on July 28 that it will move 600 or so jobs from New York, as well as dozens of other slots in England, Scotland, and Singapore, to its operations in India.


  • WashTech News: AFL-CIO blasts employer abuses of tech visa programs. Excerpts: Calling employer abuse of federal visa programs for foreign workers "intolerable," the AFL-CIO is demanding that Congress reform the programs and increase federal regulation of companies that use them. The resolution, approved at the Executive Council meeting in Chicago on August 5, focuses on two visas, H-1B and L-1, that employers use to import more than 1 million so-called "guest workers" into the U.S. each year. ... "Employers, especially in high tech, are abusing temporary visa programs to allow hundreds of thousands of guest workers with no rights and no job security to take job opportunities in the U.S.," the AFL-CIO said. That occurs even as their U.S. counterparts in high-tech firms "are unemployed and even being laid off." The unions point out that firms such as IBM bring the foreign workers in, or plan to do so. They have U.S. workers train them for managerial or administrative jobs over years, and then return the foreign workers to their home countries, taking the U.S. jobs with them, and firing U.S. workers.


  • Economic Times (of India): Big time IT recruitment in the offing in Kolkata. Excerpt: IBM, which plans to add 10,000 more professionals to its India staff, has identified Kolkata, along with Bangalore, as expansion points. The company now has about 800 people working at its software facility in the city. IBM Global Services (IBMGS) inherited the Kolkata centre after its global acquisition of PricewaterhouseCoopers (PwC). The Indian operations of PwC are being integrated into IBMGS. Though IBM's official spokesperson in the country refused to comment industry sources said the company may hike its staff strength by around 250 per cent in the next 18 months. According to WDC Ltd executive director Rahul Sharma, a company which currently contracts out as many as fifty such professionals to the likes of IBM Global, Kolkata is fast becoming a hub of highly talented IT professionals ready to be engaged by the top IT companies. Sharma said that the skill levels have also started growing which augurs well for the IT sector in Kolkata. Also the presence of global majors like IBM, IGS, PWC, Wipro, etc. is a clear indication of the winds of change blowing in this part of the country.

"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
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