Labor Union Invades Law Firm; ESOP Fables: Who's Distressing the Gary Post-Tribune? 

Labor Union Invades Law Firm

The American labor movement may be in general retreat, but not Augie Sallas. If just 17 percent of today's work force belongs to a union, what this tells an alert organizer like Sallas is that the woods are full of opportunities. "I've got a hot story for you," said Sallas on the telephone. "I'm sitting here with the Joan of Arc of Mayer Brown & Platt."

Sallas runs the Chicago Typographical Union--typesetters, that is, a vanishing trade. His biggest accomplishment as CTU president has been cutting his union's losses with the Tribune and ending a 40-month-long strike/walkout there. Now he's mired in talks with the Sun-Times that are going nowhere.

On the other hand, Agnes Zarkadas walked into his life.

"I was having dinner with a friend of mine shortly after getting a job at Mayer Brown & Platt," explains Zarkadas, who started there as a proofreader 14 months ago. "I started at 15 thousand a year, which breaks down to $8.24 an hour. He mentioned to me that he'd met some people at a party who were proofreaders and made $17 an hour. My original thought was that they were working for some medical or very technical publishing firm.

"Well, weeks after that, I was having lunch with a woman I worked with at Mayer Brown--we were complaining about the pay and other things--and she said, 'Oh, they must be union.' It hadn't even occurred to me there were people who did what I did under the auspices of any union."

Huge in dignity and influence--the new mayor's brother William Daley practices there, and so does Adlai Stevenson--Mayer Brown & Platt fields about 350 lawyers in its Chicago office, and there are other offices in New York, Washington, Denver, Houston, LA, London, and Tokyo. Justice, of course, is the holy grail of the legal profession. But the actual product, by Mayer Brown's own account, is paper. Think of LaSalle Street as a white-collar mill district, grinding it out.

The firm hired Agnes Zarkadas to peruse leases, briefs, memos, wills, and secured credit agreements and to pounce on lapses of form and spelling. "The leases are not exciting," she allows. Indeed, her major at the University of Chicago was in history, not codicils. "I would like to write and teach. In fact, the reason I was going to the union to begin with--I thought if I had a job that paid very well I'd be able to go back to graduate school sooner. That's how it started--self-interest and greed."

Zarkadas called the pressmen's union--"they were the only ones I could think of in printing other than the newspaper guild"--but no one called her back. "In the meantime, my father made a call to the typographers' union and talked to an organizer about my getting a job at a union shop."

The CTU actually does represent some proofreaders, although not at law firms. Augie Sallas asked her to come in. He told her he could put her on a waiting list for a union job, but he had a better idea. How would she like to organize the proofers at Mayer Brown & Platt?

"I really liked the idea," says Zarkadas. "I grew up in the 60s watching civil rights marches and here was my chance to save the world."

Her campaign began late last summer, covert "to the point of taking one person to lunch, swearing them to secrecy, and then asking them if they would be interested." But in time the secret bubbled out, and lately working conditions have changed noticeably.

"We've been deluged with office supplies--rulers, magnifying glasses," says Zarkadas. "Thursday or Friday an entire new set of Webster's Ninth and the Chicago Manual showed up. We'd previously had a few copies of the 12th edition, which was years out of date. Of course these are things we need to do our job and we should have had to begin with.

"Apparently someone complained our chairs had been broken for a long time and needed to be fixed. About two weeks ago they brought us an entire set of new chairs. The plastic was still on them. We walked in a week ago Monday and our air-conditioning was cranked all the way up, so much that we were freezing. So one of the women on the staff said 'Oh, I'm going to call office services and gosh, when they find out I'm a proofreader they'll be here in a second.' She put the phone down and hadn't even turned away from it when a man from the building was there saying 'Did somebody say it's cold in here?' It's like they were camped outside."

Last week, rival contingents from the CTU and the law firm marched into a National Labor Relations Board hearing room. CTU attorney Gilbert Cornfield came to argue that the 31 proofers constitute a legitimate bargaining unit, and Mayer Brown was just as ready to insist they don't. Unveiling their flow charts, the firm's legal team explained the manufacturing process to the NLRB hearing office. Lawyers create the paper, secretaries type it, word processors print it, proofreaders check it, and the mail room ships it out the door. It's a seamless process.

Says attorney Barry White, "You cannot, under NLRB case law, fragment out a part of an office staff for separate representation."

If the regional director of the NLRB buys this argument--a decision is weeks away--the CTU could be faced with having to organize the entire 650-person nonlegal staff of Mayer Brown. That daunting task didn't get any easier when the day after the hearing Agnes Zarkadas gave her two weeks' notice. She'd found an apprenticeship at a union shop for another $2 an hour.

"I almost didn't take it," says Zarkadas. "I thought it would be terrible to leave." But she set things up so she won't have to. Mayer Brown says she can still come in on weekends.

ESOP Fables: Who's Distressing the Gary Post-Tribune?

"We've had so many people say this is impossible that we just got tired of listening to them," said reporter Joe Conn. "We've been reading, studying, learning, organizing, talking, wheedling, cajoling, bleeding, and begging."

The payoff to all that humping and groveling was this: $60,000 in public funds, which financed the feasibility study that enabled the employees of Knight-Ridder's Post-Tribune in Gary, Indiana, to submit a formal bid this week to buy the newspaper.

The congressionally created apparatus that made the bid possible--an Employee Stock Ownership Plan, or ESOP--is lately the rage among big businesses maneuvering to avert hostile takeovers by putting more stock in loyal hands; for example, in Chicago the Tribune Company just parried a run on its stock by announcing it would buy up to eight million shares, increasing its ESOP's share of ownership from 1 to 10 percent.

But the Gary venture is far closer to the spirit of the law, which offers managements tax incentives to give the work force a cut of ownership. Some companies have been sold outright to ESOPs, and Conn hopes the Post-Tribune will be another. Knight-Ridder put the paper on the market in January; its annual profits of 10 percent might be half of what the chain's other properties bring, but that doesn't scare off the staff.

The employees' organization NWI/ESOP Publishing Inc. talked the Indiana Department of Commerce and the Lake County Economic Development Commission out of $25,000 each, and the Lake County Development Authority out of $10,000. These allocations did not sit well with the Hammond Times to the west, which has run a series of skeptical articles, such as the one that appeared April 2 under the headline "Analysts say ESOP proposal is risky deal."

"We're clearly talking high risk," David Binns, managing director of the Washington, D.C.-based Employees Stock Ownership Association, told business-labor editor Mylinda Cane. He called the paper "distressed" and wondered "Why has a company with all the resources of Knight-Ridder been unable to make a go of it?"

We asked Binns what he thinks is so distressed about the Post-Tribune and he said he'd simply been responding to the situation as Cane presented it. "The woman did sound to me very skeptical about it--[as if] it was a quixotic effort."

Binns said, "I emphasized over and over again I didn't know anything about the finances of the paper." The most storied of all employee buy-outs, he said, was of U.S. Steel's Weirton, West Virginia, mill in 1984. The mill has since piled up 20 straight profitable quarters, occasionally leading the industry. Its margin of profit before the buy-out, Binns mentioned, was just 1 or 2 percent. "A company earning 10 percent is not a distressed circumstance."

As many as half a dozen bids for the Post-Tribune were expected this week, and one of the likelier bidders was Howard Publications, Inc., which owns the Hammond Times. Obviously the Times, the lesser of the two papers in both circulation and quality, would benefit enormously from consuming the rival Post-Tribune; the clear disadvantages of that event to Lake County advertisers and to the reading public may have helped persuade those public agencies to put some money behind the ESOP campaign.

Hammond Times publisher Jack McCarthy has told anyone who'll listen that he hopes Howard Publications will buy the Post-Tribune. He's been so quoted everywhere but in his own paper. We asked him why not. "Maybe because I haven't been interviewed," he said helpfully. "I think communications within any newspaper stink."

Art accompanying story in printed newspaper (not available in this archive): photo/Bruce Powell.

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