Hartford Courant (Connecticut), October 5, 2009, Monday

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Hartford Courant (Connecticut)

October 5, 2009, Monday


HEADLINE: Heading Down a Slipper Slope?
DPUC's Unprecedented Move Questioned

BYLINE: ERIC GERSHON egershon@courant.com

BODY:

State utility regulators on Sept. 24 did something they had never tried before, something that lawyers of long experience said they have rarely, if ever, seen any government agency do. Regulators forbade private companies from laying off some of their own workers.

The temporary ban imposed on Connecticut Natural Gas and Southern Connecticut Gas will expire Oct. 14 if the companies, both owned by Energy East of Maine, sufficiently answer questions about their plans to maintain safe, reliable service in the event that 67 planned layoffs are carried out.

But the Department of Public Utility Control reserves the right to reinstate the prohibition, illustrating the new lengths to which government, prompted by political leaders, might go to preserve jobs in an economy where they remain painfully scarce.

In July, the same regulators rejected a similar request to block layoffs at AT&T by the same government officials - Attorney General Richard Blumenthal and state Consumer Counsel Mary Healey.

Blumenthal also said he intends to file a brief in support of the Machinists union, which is suing Pratt & Whitney in an effort to block 1,000 job cuts. That is a more common form of government intervention in private-company layoffs.

At a time when the nation's president is more aligned with labor unions than any predecessor in at least a generation, and many workers have pent up anger over layoffs and lagging pay, DPUC's bold move might suggest a controversial new way to restrain unemployment. But labor lawyers and scholars say deep government intervention in the day-to-day operations of private companies is unlikely to become commonplace.

"The corporate community would go ballistic at the mere proposal of widespread use of a mechanism like this to block layoffs," Lance Compa, a labor lawyer and senior lecturer at Cornell University's School of Industrial and Labor Relations, said of the DPUC's action. ". . . I don't think we have the political will to enact a broad policy of blocking private sector layoffs."

To the extent that other government agencies try to forcibly forestall layoffs by private firms, it is likely to be "intermittent and ad hoc," he said. The fact that at least one has tried "reflects the extent of the crisis that working people are facing these days."

Blumenthal agreed. "I am not predicting an avalanche of regulatory actions that ban layoffs," he said. "If it becomes more common, it will be only because the companies themselves fail to fulfill their public trust."

A UNIQUE CASE

So far, fallout from the DPUC's decision has been minimal. Since DPUC issued its ban, the companies have not challenged the commission's authority to issue it, and a company spokesman said Tuesday that the firms are cooperating as DPUC assesses whether the job cuts would compromise service and safety.

Between them, the companies want to eliminate 67 union and non-union workers, including some who respond to gas leaks and repair meters and their dispatchers.

Still, business interests bristled what they consider micromanagement by government and said it could discourage corporate investment here.

"To the extent that we are moving in a direction where legitimate business decisions are being second-guessed by government, then you're really going to create a barrier for investments in Connecticut," said John Rathgeber, president of the Connecticut Business and Industry Association. "Long term, that's a real problem for the state."

The tempered response appears because the order has been presented as temporary and was imposed on companies that are already subject to extensive regulation.

"It's a unique set of circumstances, because of the industry we're dealing with and the fact that CNG is in such a highly regulated industry," said Joshua Hawks-Ladds, a lawyer with Pullman & Comley, who is chair of the state bar association's section on labor and employment law.

DPUC's action is unlikely to set a precedent pertaining to all companies in all industries, he said: "I do not think it has the far-reaching effect that some people might think it has."

In forbidding CNG and SCG from laying off the workers, regulators relied on a broad state statute giving DPUC the authority to "keep fully informed" about "all public service companies" regarding their ability to carry out their duties safely.

Under the provision, "the department may order such reasonable improvements, repairs or alterations in such plant or equipment, or such changes in the manner of operation, as may be reasonably necessary in the public interest."

EMPLOYER BACKLASH

Through the National Labor Relations Board, the federal government has long forced companies to make specific personnel decisions. Those actions almost always come after the fact, however, and in specific workers' cases, as when a company wrongfully terminates employees for attempting to form a union, not as advance prohibitions.

Brian Clemow, a labor lawyer with Shipman & Goodwin who represents employers, said there may be scenarios in which a corporate action might raise legitimate concerns about the effect on public safety, and thus justify government review - if a gas company decided to have no employees available at night, for example.

However, he said, "If this were to become anything much more than a freak episode, you would see a pretty substantial backlash from employers and people saying, 'Hey look, I'm not going to be in this business if you're going to essentially prevent me from running my business in a way that we've run it for decades.' I would be surprised if this becomes common. Employers just aren't going to put up with it."

As it is, employers are beginning to question political leaders' traditional use of their bully pulpits to criticize companies for layoffs.

On Tuesday, Ramona Carlow, president of AT&T's Connecticut operations, sent Blumenthal a letter complaining about his "haste to once again publicly criticize AT&T," referring to a press release he issued the week before, criticizing the company's plans to lay off 75 workers in the state. In the release Blumenthal said his office would "consider next steps to fight AT&T's continued defiance of state service needs."

He also made misleading statements about AT&T's past, she said.

"Your repeated threats send a signal far and wide that some powerful Connecticut officials are hostile to business and will take any step they can to limit a business' flexibility to operate in a financially prudent manner," she wrote.

Blumenthal, who was planning to respond to Carlow by letter today, said Friday that he stands by the thrust of his release, "which is that service quality and reliability will be vitally affected by the layoffs, not just of the 75, but the cumulative effect of 1,000 job cuts over the past few years."

He also disputed Carlow's claim that he is hostile to business and said he has come to AT&T's assistance in "a number of critical endeavors."

NO REDUCTIONS

"The Department hereby orders that there shall be no workforce reductions by the Companies prior to more fully developing its workforce reduction plans and developing proposed operating procedures needing modification. . . . The Department does not believe that the Companies are harmed by this Department action."

DPUC order regarding Connecticut Natural Gas and Southern Connecticut Gas



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