No. of Recommendations: 4

Lucent Workers in Layoff Limbo

NJ Online/by Mary Sisson/August 16, 2001

HOPEWELL TOWNSHIP -- After 30 years of working for the company that is
now Lucent Technologies, George Williams could see the writing on the wall.

Lucent had laid off thousands of workers, and the Hopewell facility where
Williams worked as a senior technician was slated to close.

So while Williams had no plans to retire, he joined the estimated 8,500 Lucent
workers -- 2,500 of them in New Jersey -- who took a retirement package
offered in June that provided them with insurance and an early pension rather
than risk a layoff with less generous benefits.

"It was basically a force-out," he said. "And then we've got to go through all
this nonsense with unemployment."

The "nonsense" is delays and confusion about whether workers like Williams,
who left Lucent's employment rolls in mid-July, are eligible for unemployment

Williams and the other Lucent workers are making an unwelcome discovery:
According to state labor department spokesman Kevin Smith, people who
accept early retirement packages typically are not eligible for unemployment

And while there are exceptions to that rule -- and Lucent workers like
Williams may be among them -- accepting such packages is likely to
complicate and delay benefits.

Such packages might seem tempting in an environment where mass layoffs are
increasingly commonplace. Since January, the Murray Hill-based Lucent alone
has announced 16,000 job cuts -- not counting the people who took early
retirement -- and last month the company said up to 20,000 more job cuts are
in store.

But unemployment benefits, which can provide up to $446 a week for up to 26
weeks, are traditionally reserved for people who lose their jobs through no
action of their own.

"It has to be an involuntary action -- not something the employee initiated,
but something the employer initiated," said Barbara Lee, dean of the School of
Management and Labor Relations at Rutgers University.

To Williams, a Hamilton resident with two high-school-age children, the
specter of being laid off and losing benefits such as life insurance or health
insurance forced him to take retirement, even though he had planned to work
at Lucent many more years.

"It was under duress," he said.

But accepting a retirement package generally means a worker won't receive
unemployment benefits, unless the worker is explicitly told he will lose his
job otherwise.

"They have to know -- not suspect or be worried about -- they have to know
they would be fired if they didn't take the package," said Lewis Maltby of the
National Workrights Institute in Montgomery.

But things are hardly that cut and dried.

While Williams is not among them, some Lucent workers who took the
retirement package have recently begun receiving checks.

Pam Speranza, a former manager at Lucent's Hopewell facility, got her first
unemployment check yesterday -- a welcome surprise for the Ewing resident.

"I just talked to someone (in the unemployment office) earlier in the week,
and they said a determination (of eligibility) had not been made," she said.

The state labor department determines whether or not a worker can receive
unemployment benefits by looking at information provided both by the
employee and by the employer, according to Smith.

"If the company determines that this was basically the same as a layoff, that
would certainly weigh in the decision-making," Smith said.

That process can take much longer when thousands of people accept
retirement packages all at once. Lucent "dropped 2,500 people on top of a
normal workload," Smith said.

While the Lucent situation might be especially confusing, confusion about the
eligibility of people who take retirement packages in the face of layoffs is
the norm, according to labor experts.

"The question is, is (accepting such a package) really voluntary?" said Lee.
"And that's a very good question."

It's also a question with no clear answer.

"As far as I can tell, after 10 years of studying labor, it really is more than
little arbitrary," said Julie Whittaker, an assistant professor specializing in
labor and public policy at Rutgers University.

Such uncertainty is another source of frustration for Lucent workers like Gil

Phillips, a communications manager, was hardly ready to take the reduced
income that comes with retirement. The 48-year-old has seven years left on
the mortgage for his Hamilton home, and in September, he will have two
daughters in college.

So he thought long and hard about accepting the retirement package. "If I had
been 10 years older, boy, I would have been jumping up and down," he said.

But for now, the reduction in income while he looked for a new job was a
serious concern.

Phillips, his family's primary breadwinner, had worked for Lucent for a little
over 13 years, so his pension paid less than $15,000 a year -- a considerable
drop from the more than $50,000 a year he had been making.

So Phillips was more than a little curious to know if he was eligible for
unemployment benefits. He consulted an internal Web site Lucent set up for
people considering the retirement package, and he repeatedly asked people
from the human resources department if he would be eligible.

He got an answer: Maybe.

"We would have to really try to make the case," Phillips said. "It was not a
clear-cut (situation)."

Dave Nicol, a technician at Hopewell, also was curious, but the internal Web
sites and e-mails he received from Lucent gave him the feeling he had a good

"It sounded encouraging from our human resources (department)," he said. "It
wasn't until I started getting documents from unemployment that I started
having doubts."

Lucent spokesman John Skalko said the company had no say in whether such
workers would be eligible. "That's completely up to the state," he said.
not a Lucent issue, that's a state issue."

As of yesterday, Nicol had received no benefits, and while he has heard that
some have, he wonders if there hasn't been some kind of mistake. "I don't think
unemployment will come through," he said.

Phillips, in contrast, has begun receiving benefits, after four frustrating
weeks of calling unemployment and being told his eligibility had not been
determined -- and that no one could tell him when it would be determined.

"It was quite unexpected," he said about his first benefit check. "It's all so

Workers faced with the question of whether to accept an early retirement
package can take one lesson from the Lucent situation, said Cathryn Mitchell,
a Princeton Township attorney specializing in workplace issues.

"People should not sign separation or severance agreements without talking to
a lawyer," Mitchell said. "The company doesn't represent you. If you're signing
an agreement, you need someone who represents you."


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