Axel Springer’s 401 (k) mistake reinforced the political union’s efforts

Politico and E&E News journalists had been pushing for the union for several months when their new owner, German media company Axel Springer, inadvertently spurred organizational efforts.

Oct. 19, a few hours after Axel Springer officially obtained Robert Allbritton’s $ 1 billion news site, Politico chief of staff Traci Schweikert emailed employees about a “significant update” of their benefits. At the top of the note, it was clarified that their paid leave and medical care would remain unchanged, but the third point was what journalists call “buried ice”: their 401 (k) plan would be halted for at least a few months.

We anticipate that the new plan will be available in early 2022, ”she wrote.

The loss of Plan 401 (k), even temporarily, would mean a reduction in compensation, as employees received a match from Politico worth up to 3% of their salary. Schweikert goes on to say that Axel Springer is “committed to finding a solution that will replace 401 (k) participants for the temporary gap.”

Employees wondered why the retirement plan was not followed when the deal was completed. The private Signal for Employees group, full of worries and anger, said more.

“It blew up a lot more than it did because of Ben Smith’s contribution to the New York Times,” said one reporter, referring to Smith’s investigation with details of complaints of sexual harassment from a German publisher.

Speaking on condition of anonymity, the journalist said the company’s misconduct on the 401 (k) undoubtedly gave the union campaign an extra boost. Last Friday, a week and a half after Schweikert’s inaugural email, Politico and E&E staff said they had 80% union cards collected the expected negotiating unit is 250 workers, Bloomberg reports. Under the name, they intend to merge PEN shop, as a subsidiary of NewsGuild-CWA.

“It was one of those things that undermines confidence in the leadership,” the 401 (k) snaf rapporteur said. “And if you’re a management and you know there’s a coordinated union drive going on right now, it’s not the right time to undermine your employees’ trust.”

Allbritton had necessarily August employees will not seek to represent unions, saying this is “not in the interest of the publication, in the interest of our readers, or in the interest of individual employees.”

“It was one of those things that undermines confidence in leadership.”

– Politico journalist

Workers have many different reasons to join union efforts, and several Politic employees said they have broader concerns about fair pay and working conditions. But the temporary loss of the 401 (k) plan affects everyone on the income scale involved – including high incomes that would otherwise be lukewarm to the union – and serves as a reminder of how benefits can disappear if they are not contractual.

Gavin Bade, who covers the store for Politico Pro and is a member of the PEN Guild organizing committee, agreed that 401 (k) was likely to have contributed to the extremely high union enrollment rate, although it was not a “dominant factor”. The committee monitored support over time and was able to see an increase after 401 (k) brouhah.

“Obviously, we talked to a lot of people all over the newsroom and pressured people to sign union cards,” Bade said. “But we certainly saw another increase in support after question 401 (k) and just a consolidation of support among people who may have been on the fence.”

Four other Politico and E&E officials said they agreed with that assessment.

Eric Phillips, a spokesman for Axel Springer, said the company is working to fix the 401 (k) problem.

“Our main priority is to find a solution that will fill the temporary gap in 401 (k) participants,” he said in an email. “We are working to resolve the matter as soon as possible and expect to publish the details very soon.”

For now, the money workers would deposit into their retirement accounts goes straight into their salaries.

Theoretically, the company could give employees a lump sum payment or temporarily increase employer contributions when the new 401 (k) plan becomes operational. But several employees pointed out that they were not sure how the company could take into account potential market profits in the months when they did not have a plan.

Even more complicated is how Axel Springer could expect to make up for lost employee tax benefits.

Employer plans 401 (k). redirect your pre-tax income to a retirement account, which reduces your adjusted gross income and thus your tax account. If you run out of a 401 (k) plan for a while, it not only costs you employer contributions, but increases your tax liability. Higher-than-expected gross income may also have other disadvantages, as it could affect the investor’s eligibility for a new tax relief for children or manufacturing ability Contributions by Roth IRA.

Politic and E&E employees will apparently move from one Vanguard plan to another. In one of her emails to staff, Schweikert said the 401 (k) interruption was due to the speed of the deal between Axel Springer and Allbritton. “Due to the short time between the signing and the completion of the takeover, Vanguard was unable to establish a new plan immediately after completion.”

“We have certainly seen another increase in support since the release of 401 (k).”

– Gavin Bade, Organizing Committee of the PEN Guild

A $ 1 billion purchase creates a lot of paperwork for lawyers, and human resources issues can sometimes fall apart, said Ted Benna, a retired consultant who often attributed by creating the first 401 (k) plan under the Revenue Act of 1978. Benna said the transition to the 401 (k) plan can be smooth with proper planning.

“There’s no reason for there to be interruptions or disruptions to cooperation, except that it’s not as high a priority as other things,” he said.

Representatives of the PEN Guild met for the first time Discuss several issues, including 401 (k), with Adviser Politico on Monday. The union hopes to reach a “voluntary recognition” deal in which Axel Springer would decide to start negotiations with the union instead of forcing elections through the National Employment Relations Committee. In the latter scenario, the union should get the majority of votes.

The seemingly vast majority of support gives the union a strong position. From an employer’s perspective, blackmail may begin to look a bit futile when 80% of employees support union efforts. This may be especially true in journalism, where employers demand NLRB elections in front of a pile of union cards don’t be great evidence.

Strong union involvement would be especially important at Politico and E&E, based in Rosslyn, Virginia. Virginia is a state with the right to work, which makes the job »open trade”Where the payment of contributions would be optional, although the union would be obliged to negotiate on behalf of all. Open shops require unions to do more work in enrolling members, but they can also take care of a stronger, more engaged membership.

One Politica employee said they were involved in the union’s efforts at all times, but News 401 (k) served as a reminder of why this was necessary.

“Without a vote at the table, things you think are very good can actually change quickly,” they said.


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