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The Union Label: Electric Restructuring's Hidden Side

Fortnightly Magazine - September 15 1997

"What it's looking for there is to maintain the same terms and conditions of employment. And you may have to look to a collective bargaining agreement, but it doesn't necessarily require you to do that. There does appear to be some case law supporting the fact that when it's not tied to collective bargaining like that, it's not pre-empted."

He admits the legislation could be legally challenged. "But it certainly presents a much different picture than what was presented to Judge Andersen."

The bill made it through the state Assembly, but got stymied in the Senate. It will be revisited in the fall (see sidebar). It could include securitization money for the employee buyouts. The IBEW will lobby hard for the bill.

Massachusetts. Massachusetts has no employee protection legislation, but the Department of Public Utilities' restructuring order (Order No. 96-25) calls for "reasonable" employee costs of divestiture and restructuring to be recoverable. The department left it up to the utilities and unions to hammer out actual language (em subject to DPU approval.

According to Joanne F. Goldstein, UWUA general counsel, New England Electric System has agreed with workers on restructuring protections. Other companies in the state (em Eastern Utilities Associates, Commonwealth Electric Co., and Boston Edison (em were progressing along the same lines. Some utilities have yet to file, Goldstein says.

The UWUA attorney says "private agreements" prevent the pitfalls of an Illinois scenario.

"If a utility company and a new owner and the union all agree, then there's absolutely no legal issues," she says. "If utility X tells new owner Y that part of the condition of sale is you need to assume the collective bargaining agreement, it's a private deal. And I don't see that there's any legal issue. The NLRA only becomes a potential problem (em I'm not conceding that it is a problem (em if the state ordered it."

She says she is concerned that new owners, such as those that buy generating plants, won't be receptive to unions. "But we think that new owners generally will value the existing workforces and the union structure. ... We're cautiously confident," she adds.

The NEES agreement, with the DPU's stamp, may help bolster that confidence. NEES has 3,200 union employees and 1,700 non-union employees. One hundred employees work in New Hampshire and about 950 in Rhode Island. The balance work in Massachusetts.

Simultaneous with the employee demands of the DPU restructuring docket, NEES sold its 18 non-nuclear generating plants in early August to a Pacific Gas & Electric Co. affiliate, U.S. Generating Co.

It is just this sort of ownership uncertainty that makes worker protections more desired by organized labor.

William F. Dowd, NEES labor relations/compensation director, places the worker protection package at $85 million, although the company has no idea how many workers will take early retirements or enhanced severance packages; no surveys have been done. The union piece of that package is $46 million.

"We have said the total stranded investment the company has sought for recovery is $4 billion," he says. "It's clear enough that $85 million