Holding the Newhouses to ‘The Pledge’

A newspaper's ex-employees sue over an abandoned "no-layoffs" promise

Once upon a time, the Newhouse family issued its employees a written guarantee that came to be called “The Pledge”: a promise of lifetime job security in exchange for keeping unions out of the family’s newspapers. But as the industry’s 30-percent profit margins evaporated, The Pledge went the way of the pica pole, and employees were let go in droves without so much as a shop steward’s shoulder to cry on.

Now, some laid-off employees of the Newhouse-owned New Orleans Times-Picayune are telling their corporate owner and the newspaper “not so fast.” Eight longtime employees who lost their jobs in late 2012 when the Newhouse-controlled Advance Publications took its draconian “digital first” business strategy to the newspaper, filed suit recently against the Newhouse-controlled Advance Publications and the Times-Picayune.

The former employees allege their terminations violated federal age discrimination laws and the longstanding Pledge, which guaranteed job security at nearly two dozen daily newspapers owned by Advance. The former employees were 46-to-59 years old, with a combined tenure of more than 165 years, when they lost jobs ranging from reporter to warehouse worker. An analysis of documents the company supplied to all victims of the mass lay-off showed that the age group was both the newspaper’s pro-rata largest, and the hardest-hit by the workforce reductions. Overall, 30 percent of the newspaper’s total workforce was eliminated, including almost half the newsroom.

An individual familiar with the lawsuits said more are expected, but that the first ones filed were regarded as the legally strongest among employees willing to take on their former employer. Advance principal Steven Newhouse and Times-Picayune Publisher Ricky Mathews didn’t respond to requests for comment.

Often represented to employees as an extraordinary worker benefit, The Pledge, in fact, had its roots in the antipathy of the late Advance founder S.I. “Sam” Newhouse, Sr. toward organized labor. “I refuse to stand by passively and allow any union to ‘bust’ me,” he wrote in A Memo to My Children, a thin, self-published memoir that is apparently the only personally penned record of his life and career.

After acrimonious and sometimes violent contract negotiations and strikes at Advance-owned newspapers in New York, Oregon, Missouri, and Ohio in the 1930s through the mid-1960s, Sam Newhouse, apparently in consultation with his son, Donald, is believed to have crafted the Pledge. (The Newhouses have declined to talk to reporters and authors about the Pledge, including me when I was researching my recently released book about the “digital first” changes at the Times-Picayune and other Advance newspapers.)

Over the years, the Pledge became “so well-known throughout the newspaper industry that it was almost considered legendary,” according to a 2009 lawsuit by former Mobile, AL, Press-Register Publisher Howard Bronson, who sued after he was dismissed from his $745,000-a-year post at the Advance paper while The Pledge was still in force. (The suit was settled for an undisclosed amount in April 2011.)

When originally instituted in the mid-1960s, The Pledge explicitly promised employees that they would not lose their jobs “because of technological changes or economic conditions so long as the newspaper continues to publish and [employees] are willing to retrain for another job, if necessary.”

It was modified in 2008 to cover only permanent, non-union employees of Advance’s daily newspapers “published in newsprint form.” The addition of this fine print set the stage for the arrival of the digital initiative, which began in 2009 at the Newhouse-owned Ann Arbor News in Michigan. Layoffs were now technically permissible under the still-in-force Pledge because that newspaper went from daily to twice-weekly. And in July 2009, 214 jobs were eliminated at the Ann Arbor News.

Advance rescinded The Pledge altogether in February 2010, when the newspaper industry was deep into its long and ugly nosedive. “We felt that it was the right thing to communicate to people that we could no longer afford not having the flexibility to do something if the revenue challenges continue,” Steven Newhouse told The New York Times in August 2009. “I think the policy was meant for a time when the newspaper business had ups and downs, but was relatively stable. It was not meant for a time when our newspapers, like others, are struggling to survive.”

The “flexibility” would mean involuntarily layoffs, which, other than those in Ann Arbor, had never taken place at any Advance newspaper. However, they began in short order and on a staggering scale at company newspapers in Alabama, Michigan, Louisiana, New York, Ohio, Oregon, and Pennsylvania. By September 2013, “digital first” had claimed about 1,600 newspaper jobs from Portland, OR, to Mobile, AL.

To some employees, the revocation of The Pledge was the institutional equivalent of a sucker punch. “It was the end of the solemn promise,” a former Oregonian reporter told Portland’s alternative Willamette Week in June. “It was incredibly painful.”

I was a reporter at the Times-Picayune from the ages of 26 to 32, not exactly the years when most people worry—or even wonder—about what their employment prospects will look like much later in their lives. However, 19 years and three job losses later, I know The Pledge would have carried far more currency with me at 51. A number of my contemporaries who remained at the newspaper until last year’s layoffs had counted on it. Bronson’s suit underscored The Pledge’s importance to older workers and the consequence its revocation would have for them. Employees “in their 40s, 50s and 60s, would be most affected,” the suit stated. “The Newhouses would be taking away these employees’ ability to plan for their golden years, or forcing them to dramatically alter their life plans.”

What’s unclear is how—or even if—the latest lawsuits can get around what are thought to be bulletproof legal releases laid-off employees were required to sign to receive severance payments from Advance. The release, among other things, prohibit former employees who accepted severance from making “any materially disparaging statements” about the company, or making future legal claims against it.” Several of the former employees who filed suit told me last year that they had signed the release, but I was unable to determine if all had. If all eight signed the release, and no legal maneuver around it exists, these suits may be little more than a symbolic gesture, a modern-day version of Howard Beale not taking it anymore.

Whether the secretive Newhouse family is concerned about residual liability related to The Pledge is presumably known only by family members, a handful of trusted lieutenants and their attorneys. However, some have suggested there may be reason for concern. The attorney for the Press-Register’s former publisher contended in his suit that Advance feared the precedent that case could set for scores of employees who had been or would be laid off after The Pledge’s revocation.

“The ultimate question here is whether Advance thought it had a serious legal liability due to The Pledge,” as CJR’s Ryan Chittum wrote in June 2013. “Can you promise employees that ‘no full-time, non-represented, regular employee will ever be laid off because of economic conditions or because of the introduction of new technology’ and then unilaterally say ‘Oopsie! We don’t mean that anymore’? I don’t think so.”

The Pledge may very well have helped to keep Newhouse newspapers largely union-free during organized labor’s heyday in the United States. Today, only two Advance newspapers have unions, and those, it must be said, have offered only limited protections against layoffs. The chain’s largest, the Newark Star-Ledger, has three production and delivery unions representing between 200 and 250 of about 770 total employees. The newspaper has sustained significant job reductions in recent years. Publisher Richard Vezza went so far as to threaten to close the newspaper earlier this year if management did not secure substantial concessions in the latest contract negotiations, which concluded in early October. Employees there are despondent about the newspaper’s future. “Everybody is just waiting for the day when the Newhouses do with the Star-Ledger what they’ve done with the New Orleans and Michigan papers,” a source “close to the newsroom” told Capital New York last week.

The newsroom union at Advance’s second-largest newspaper, the Cleveland Plain Dealer, has dwindled to 110 from 350 a decade ago. Short of an unlikely reversal of fortune, the guild eventually will be driven to extinction by management-demanded changes ratified in late 2012 that now allow the print newspaper to be filled with copy produced by non-unionized cleveland.com employees, giving managers no reason to hire on the unionized newspaper side of the business. The symbolism of this victory may have resonated with the Newhouses. The Cleveland Press, a predecessor of The Plain Dealer, was “the birthplace of the [country’s Newspaper] Guild,” in 1934, its website boasted before being deactivated sometime in the past few months.

In New Orleans, there was never any question about the relationship between The Pledge and Advance’s anti-union position. Former and a few remaining Times-Picayune employees recall annual employee presentations by longtime Publisher Ashton Phelps, Jr. in which he usually ended with a declaration of the company’s dislike of unions followed by a recitation of The Pledge.

Last Sunday, in a year-end commentary to readers published in the newspaper and on NOLA Media’s Group’s corporate website, Phelps’ successor, Mathews, boasted that the company had more than 1,000 employees and contractors now working for it. But with a full-time newsroom of about 135 (down from 265 a decade ago) and production, advertising and support staffs totaling roughly 400, that means only about half of today’s Times-Picayune workforce is comprised of the employees that The Pledge once upon a time was put in place to protect.

Rebecca Theim was a reporter at the Times-Picayune from 1988-94. Her book, Hell and High Water: The Battle to Save the Daily New Orleans Times-Picayune, was published in October by Pelican Publishing Co. Follow her on Twitter @RebeccaTheim.