UPI Suspends Severance Pay in 1991

Here's a March 27, 1991, story from The Associated Press about UPI suspending severance pay to former workers who were laid off:


WASHINGTON (AP) - United Press International said Wednesday it has suspended severance payments to some employees who lost their jobs because of cutbacks by the financially distressed news service.

Milt Capps, UPI senior vice president and spokesman, said the payments were not made during the last pay period and he did not know if they will be in the current pay period ending April 5.

"This is a situation that we review daily," Capps said. "Our priority, of course, is to pay our current employees."

Kevin Keane, president of the Wire Service Guild, said the action was a "blatant violation" of the union's contract with the news agency.

"The company does not disagree with our interpretation of the contract," Keane said. "They don't have the money."

The union official said he was told that the situation "would be reviewed at a later date" to see whether the payments could be resumed.

Capps declined to say how many employees are involved, and Keane said he did not know. He said he had heard from about 10.

"We told them we are very upset," he said. He said the union asked the company for a list of names of the affected former employes and was "expecting an immediate response."

Billy James, former United Press Bureau chief in Jackson, Miss., said he had received severance checks regularly since the Jackson bureau was closed in August, but his check did not come last Friday. He said the contract provided for payment for a year to employes whose bureaus were closed.

James, 57, had been with UPI and its predecessor, United Press, for 29 years and 3 months, including 25 years in Jackson. He said he was given no notice that the severance payments were being suspended.

"They are cutting our throats and they don't let anybody know anything about it," James said. "Somebody needs to know that it isn't a viable company as they keep claiming. We have been hearing about an impending sale ever since November."

UPI has been for sale since late last year. It has been owned since 1988 by Infotechnology Inc., which is currently under bankruptcy court protection.

Capps said the news service has not received financial support from Infotechnology for the past five or six months.

"Though we can not and will not at any point rule out any option, including bankruptcy, we are making progress and we are at this point very focused in terms of the deal that seems most likely ... and we have reasonable confidence that a workable sale agreement will result," Capps said.

UPI's executive vice president and chief executive officer, Pieter VanBennekom, said in a memo to the staff on March 7 that the field of prospective purchasers had been narrowed down since the previous month, when he said there were three or four.

Capps said VanBennekom "is traveling frequently, and all of his travels have... to do with the sale." He said that "at times" VanBennekom's travels take him abroad.

Capps said the company is also currently unable to make payments to some vendors. He said this has been true for many months.

UPI news workers represented by the guild, a unit of the American Newspaper Guild, have agreed twice to pay cuts. The company has restored 5 percent of a 35 percent cut, and is due to restore another 5 percent in mid-April.