Employees sue Penn, Trammell Crow over deal

The suit alleges that Penn and Trammell Crow illegally worked the outsourcing deal in order to pay fewer benefits. and Tammy Reiss The plan to turn facilities management over to an outside firm ended up in court yesterday, as expected, when a group of University employees sued Penn and Trammell Crow Co., alleging that the deal's goal was to avoid paying benefits to the workers. The University signed a letter of intent October 8 to outsource management of all on- and off-campus buildings to Trammell Crow. The suit, which seeks class-action status for the approximately 175 employees affected by the deal, was filed in U.S. District Court in Philadelphia, according to Stephen Pennington, an attorney for the plaintiffs. "In our view, there is a substantial difference in the benefits that Penn employees receive now and that employees hired by Trammell Crow will receive," he said. University spokesperson Ken Wildes and Associate General Counsel Brenda Fraser declined to comment. Trammell Crow officials did not return phone calls. Trammell Crow Corporate Services Inc. and Trammell Crow Higher Education Services Inc., the units that would provide the services to the University, are also named as defendants in the lawsuit. To maintain their positions once the Dallas-based company takes over, University employees will have to interview with Trammell Crow next month. Officials expect the company to hire about 75 percent of the affected workers for 110 to 150 positions. "Those 'outsourced' employees who are offered employment by TCCS/TCHES will receive substantially fewer pension and welfare benefits than those to which they would be entitled under the current University plan," the complaint states. Pennington wouldn't say how much the plaintiffs thought the benefits plans would differ. Employees' spouses will lose tuition benefits after next spring, Executive Vice President John Fry said earlier this week. Children's benefits will be extended indefinitely -- past the 2001 cutoff date set when the deal was announced -- at a cost of $4 million to $5 million to the University, Fry said. Also, the University and Trammell Crow will increase hired employees' base salaries to make up for any differences in medical and dental benefits after the transition, Fry said. Attorneys for the group claim the defendants violated the Employee Retirement Income Security Act of 1974, a federal law governing employment benefits, by conspiring to reduce the employees' pension, medical and tuition benefits. The law is commonly known as ERISA. The plaintiffs seek a declaration that "the policy and practice of defendants violates ERISA," in addition to unspecified damages. The plaintiffs' attorneys said the case is similar to one that came before the U.S. Supreme Court last May. In that case, Inter-Modal Rail Employees Association v. Atchison, Topeka and Santa Fe Rail Co., the court unanimously ruled that employers couldn't fire workers in order to lower the cost of their benefit plans. But employment-law experts said the plaintiffs have the burden of proving that the defendants signed the agreement specifically to decrease benefits and for no other reason. "If you have the right facts, [the Supreme Court decision] gives employees a new weapon in their arsenal, or the ability to put the brakes on employers," said Jane Rigler, a professor at the Pennsylvania State University's Dickinson School of Law in Carlisle. In a guest column in yesterday's Daily Pennsylvanian, Fry stressed that the outsourcing deal will streamline operations and increase the "quality and efficiency" of facilities management services. Rigler said those reasons sounded "entirely legitimate" to her. "Well-counseled employers are going to be careful about how they characterize what they're doing," Rigler said. Susan Hoffman, a Philadelphia attorney who defends ERISA litigation, said Inter-Modal was a "limited" decision that has nevertheless spawned "all sorts of lawsuits." "There's a big difference between stating a claim and proving a case," Hoffman said. "The Inter-Modal case is so new that it's too soon to tell whether anyone [who files a similar lawsuit] will succeed." Employees affected by the outsourcing protested the decision in an open College Green rally yesterday afternoon, where they also circulated petitions in support of the lawsuit. About 50 people attended the rally, and protesters tried to flag down passing students on Locust Walk to sign the petitions. The employees will hold at least one more rally prior to the November 7 Board of Trustees meeting, when members are expected to approve the final version of the agreement, according to John Hogan, an officer in the University's support-staff organization, the A-3 Assembly. Members of the "Save Our Jobs Committee" -- formed Monday -- said they hope their protest efforts will cause trustees to turn down the deal. The petitions protest both the contract with Trammell Crow and the University's failure to consult with campus and community groups before signing the letter of intent. "We're going to get these names to the trustees to show them how we feel about this deal," said Rashida Abdu, a Housing and Residence Life employee whose job is affected by the deal. Plans for the rally originally included a visit from Pennington, who was going to share information about the lawsuit with the employees. But Pennington was unable to attend, Hogan said. Employees said the outsourcing would affect the entire campus community, and that students and other staff members should consider its implications. "We're concerned about the next wave," said James Gray, co-chairperson of the African-American Association, a group of faculty members and staff. "There are moral issues involved here." And Engineering graduate student Jason Eisner said he's "concerned about cases where the University acts without consultation." Members of student groups, including the Undergraduate Assembly and the Graduate and Professional Student Assembly, have expressed support for the employees and have said they will help in the protest efforts. Fry has scheduled a pair of open two-hour information sessions on the agreement. The first will take place Monday at 2 p.m. in the Steinberg Conference Center's second-floor Sweetbaum room. The second is scheduled for the following Monday at 4 p.m. in the building's second-floor Hattersly room. The plaintiffs named as class representatives in the suit are University employees Richard Cipollone Sr. of Swarthmore, Donald Calcagni of Levittown and Lisa Karnincic of Philadelphia. Calcagni's wife, Linda, is also named as a plaintiff because she receives benefits including tuition reimbursement as a result of her husband's job, the complaint states.

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