Job Security?

Peter Skillman had already been fired by Harvard once. It happened halfway through his 30-year tenure as an in-house security guard. Up to that point, he had been happily employed at the Business School working midnights and swing shifts as a patrol officer. In 1989, he was accused of beating up two of his fellow guards, and he was terminated for three months while authorities conducted their

investigation. But his name was quickly cleared with support from the students and faculty he had come to know during his time on the job. According to Skillman, he found advocates in some of Harvard’s biggest names, such as former Dean of Students Archie C. Epps III and Plummer Professor of Christian Morals Peter J. Gomes, who would ask for updates on the “Yard situation” every time the two of them ran into each other.

Upon his exoneration, Skillman came back and put in 15 more years, working as a guard at the Kennedy School of Government and the Widener entrance gate. He remained at Harvard until last May, when the University announced that all guard positions would henceforth be outsourced to Allied-Barton Security—a company that had been steadily cutting into the Harvard guard union’s workforce since the 1970s. The union, which had shrunk from over 120 members to a mere seven by the time the Allied deal was struck last summer, was thus finished.

Although all of the remaining seven guards were promised jobs with the contractor, not a single one of them took the University up on its offer. Thus, the specter of outsourcing had emerged for the first time since 2001, when the Progressive Student Labor Movement (PSLM) protested the practice in a series of rallies tied to their Living Wage Campaign. Back then, labor-related buzzwords like “outsourcing” and “parity” were on everyone’s lips, thanks to the vocal, sometimes antagonizing tactics of PSLM.

Today, critics worry that the University is inching backwards from the promises it made following PSLM’s famous 21-day sit-in of Mass. Hall. Administration officials have admitted that the University’s implementation of those recommendations has been more difficult to enforce and monitor than originally hoped, mostly because of the University’s decentralized hiring and firing practices. Back in 2001, PSLM’s main concern was that Harvard was outsourcing work to private contractors—whose low-paid workers were not allowed to unionize—to save money and bypass Harvard’s own unions. Because of alleged “union-busting” on the part of the University, people working for Harvard’s contractors were being shortchanged in wages, benefits and working environments while the University’s own employees enjoyed much better conditions. Outside contractors should be held to the same high standards, the labor activists insisted, and until those standards were properly enforced, Harvard was wrong to support them.

The living wage effort demanded Harvard use more scrutiny in its oversight of contractors, and when the sit-in ended in May of 2001, University officials began discussing potential reforms with labor specialists and union organizers. Although University President Lawrence H. Summers made no definitive promises, the Harvard Committee on Employment and Contracting Policy (HCECP)—convened with workers, students and administrators after the sit-in—used strong language against outsourcing to lower-paid workers in its report to the president in January 2002.

The report issued by the HCECP, widely known as the Katz Committee after its chairman, Harvard labor economist Professor Lawrence F. Katz, blamed the use of outside contractors for driving down wages on campus. It stated that “outsourcing should not be used to lower wages and weaken the unions representing Harvard’s employees.” Their recommendations included the Wage and Benefits Parity Policy (WBPP), which requires contractors to pay wages and benefits that are at least equal to those paid to comparably employed unionized Harvard workers.

In principle, the parity policy was put in place to protect inhouse workers from cheap subcontracted labor, but critics claim that Harvard does not know if all the contractors are complying. Members of Harvard’s union community also allege that the University systematically took apart the security union after the sit-in.

Administrators concede that confusion abounds among vendors about what they should be paying their workers and the kind of insurance they are supposed to provide them. But, administrators say, the move to private contractors is about efficiency, not union belligerency. Wages and benefits for Harvard employees are higher than they were before the sit-in and many of the workers employed by contractors are now unionized as well. But questions remain about how the University is monitoring the implementation of the parity policy and what kind of steps they are taking to increase the effectiveness of their oversight.

SECURITY BLANKET

“We were basically forced out of there,” Peter Skillman says of last summer’s Allied deal. “We got up to the police station, and they turned around and said they were giving us a buyout. Our union and [Harvard University Police Department Chief Riley] said we should take it, because this was it. ‘If you don’t take it,’ they said, ‘you’re out of here anyhow.’ But I wanted to finish up my remaining years at Harvard. I’d been there for 30 years, and I don’t know nothing else.”

After a round of in-house guard layoffs two years ago resulted in worker and student protests, James A. LaBua, Deputy Director of the Office of Labor and Employee Relations (OLER), which oversees all labor policy implementation and contract negotiations, said that a mix of in-house guards and contracted guards wasn’t optimal for the security of the University.

“Any major employer would look at this and say there seems to be some merit in unifying all those forces,” LaBua said in June 2003. “We are in the process of looking to unify the existing security guard force.”

The issue of more secure security gained even greater importance with administrators after a pair of sexual assaults last winter was traced to Geremias Cruz Ramos, a Holyoke Center custodial employee hired by Sodexho USA, a private contractor. The arrest quickly led to the current policy that requires security and custodial contractors to perform background checks (CORI) on all new employees. Harvard has had a long-standing policy of performing background checks on its own employees.

Bill Murphy, Director of OLER, recently echoed LaBua’s belief that the move to Allied represented more security for the Harvard community. “Given the changes in responsibilities and focus since community policing took effect, the Allied Security model reflects improvements in applicant screening, and includes CORI checks, and increased training,” Murphy writes in an e-mail.

Allied-Burton, meanwhile, already had guards at the Business School, and kept winning other contract bids. Last spring, it became the University’s largest provider of security after its buyout of Security Systems Inc. It was then that the last seven in-house security guards in the union were “bought out,” in Skillman’s words. They were told to choose between jobs with Allied and lucrative severance packages, even though there were two more years left in their contract with the University.

Skillman says job protection is what kept him and his colleagues in the security force away from the non-unionized Allied. “If we went with them, our protection would be down the tubes. We would no longer be in the union,” he explains. “And it’s pretty simple—when you’re in the union, you’re protected. When you’re not in the union, they can get rid of you—they don’t need a reason.”

But, as Skillman complains, even his own union couldn’t protect his job from the pull of outsourcing.

Mike Ontario, a sixty-year-old former guard who also lost his job last June, says he heard “bad things” about Allied from fellow guards who worked for the company, such as accounts of late payments, poor benefits and low wages. “I would never go to Allied, because I never did like those people,” he says. “I said why get us jobs at Allied, why not just let us stay here for two more years? I would have been happier than I am right now. They didn’t have to let us go. If they could kill our contract like that, we should get our union dues back.”

According to Murphy, Ontario’s claims about Allied are unfounded. He said the company’s employees have been receiving fair wages and benefits as mandated under the parity policy. Several Allied guards working around campus confirmed Murphy’s statements, though they say the change has been relatively recent.

“They started paying us a bit better,” says one former in-house guard now working for Allied who asked to remain anonymous. “It’s okay now. Before we got paid less and didn’t have the same insurance.”

Katz says the story of the demise of Harvard’s security guard union is “a sad case.”

“With the security guards, it was an egregious case of breaking the union from the inside by going to outside guards,” he said, blaming a late 1990s split in the ranks—in which members left Service Employees International Union (SEIU) to form their own union—for the union’s later demise.

“Setting up on their own was a huge strategic mistake on their part,” Katz says. “It allowed the university to just take them apart.”

One of the problems with not having a union, say workers and students, is that unions provide a service that many consider key to the continued improvement in workers’ wages and benefits: scrutiny.

Emma S. Mackinnon ’05, a long-time PSLM leader, says that the demise of the union means that no one is left to fight for the improvements in conditions that the WBPP promises to extend to workers across the University.

“Coming out of the Katz report, the ability of the unions to negotiate for wage and benefit improvements is even more important,” MacKinnon says. “Those unions basically have the responsibility to negotiate the wages of the outsourced workers, even those who aren’t their members.”

Indeed, Murphy says that in the case that a contractor is breaking the rules of the WBPP, it would be “the union’s job to bring the grievance to us.”

SLAPPED BY THE WHITE GLOVE

Thanks to the parity policy, it shouldn’t matter in principle whether or not contracted employees are unionized—they should receive the same wages, benefits and time off as any Harvard worker doing the same job. The problem in practice, say administrators and workers, is that the policies on the books can’t be enforced one hundred percent of the time.

In May 2004, the Harvard Risk Management and Audit Services (RMAS)—the agency entrusted with monitoring contractors for compliance to contracts—randomly selected three contractors in the service sectors for the second annual audit for compliance with the parity. According to RMAS guidelines, three contractors—one small, one medium and one large—are chosen from among the several service sectors across the University.

“RMAS found that in some cases a degree of confusion persists among vendors with respect to total compensation, which includes payment of parity wages, as well as benefits (most notably pension),” University spokesman Joe Wrinn writes in an e-mail. “That is, the benefit and pension packages offered by various outside vendors are not always directly comparable...to those provided by Harvard to its workers, which makes determination of parity more difficult.”

The audit recommended increased communication to contract managers and vendors, Wrinn says.

One aspect of the WBPP has allowed at least one contractor to get around paying parity wages: contractors are bound by the WBPP only if their contract extends 9 months or longer and they bill more than $50,000 annually.

Last December, Harvard University had to pay more than $4,000 in retroactive wages to three custodians working for Harvard maintenance contractor McGarr Services Inc., which Harvard discovered was operating under two company names—McGarr and White Glove Inc.—in an effort to skirt University policies regarding parity wage. McGarr and White Glove were billing Harvard less than $50,000 annually separately but exceeding $50,000 when their invoices were combined. The companies were listed at the same Brighton, Mass address and a government website showed that they shared an almost identical set of business officers.

The three employees had been making $9.95 an hour when union organizer Aaron Bartley of SEIU Local 615, which represents most of Harvard’s in-house and contracted custodial workers, brought the matter to the OHR in Feb. 2003. The union wage at the time was $11.85 an hour.

The employees began receiving the union wage in May 2003, but the university did not agree to give the workers retroactive pay until Nov. 2003. Bartley said at the time that it was “inexplicable” why the University waited seven months after the employees began receiving the union wage to pay back wages.

He said at the time that the OHR needed to counter bureaucratic “inertia” to catch other contractors who may not be following the rules. “I worry that we have these unmonitored contractors that are popping up that we don’t know about,” he said.

Despite this infraction, neither company was penalized and both companies still operate at Harvard.

“To date no sanctions have needed to be imposed on violating contractors,” Wrinn said. “Rather, we have concentrated on better communication and understanding of the policy by our vendors.”

Union leaders say that the infraction went unnoticed for months because the employees at McGarr and White Glove were not unionized.

“It’s not any surprise to anybody that the folks who work for Sodexho—who have a union—are in better shape [than workers for contractors who don’t have unions],” says Brian Lang, an organizer with HEREIU, the dining hall employees union. “It’s not that simple [to join the union]. Employers put vast resources into fighting employees’ efforts to unionize—and that’s the single biggest impediment.”

AN EYE ON THE BOTTOM LINE

Prof. Katz, who says he checks on the implementation of his committee’s recommendations by reading annual reports such the OHR’s, praises the administration for “doing what they said they are going to do” —implementing the wage parity policy.

“The university went beyond the recommendations of the [Katz] committee,” he says. “They imposed an exact wage scale on the contractors, not just a minimum wage parity.”

But just because there are audits, Katz says, “doesn’t mean no abuses go on.”

“The university is a huge place, units within units. [RMAS] spot checks certain contractors,” he says. “There are certainly contractors out there who are unhappy with the parity system and I’m sure there are contractors who are violating the agreement. Some of the smaller contractors, we really worry about them cutting corners. With the larger companies, UNICCO, Sodexho, they may not be really forward-looking companies but they care about their reputation.”

Many contractors who responded to reporters’ calls admit that the parity policy was significantly raising their costs of operation at Harvard. But they also say that they don’t have to cut corners, because Harvard is willing to cover the costs of paying workers higher hourly wages and giving them better benefits.

James N. Bond, accounting manager at American Cleaning Co., which cleans in science labs and at the dental school, said that there’s a difference of $1.80/hour for part-time and $1.70/hour for full-time workers between their Harvard and non-Harvard workers.

“The benefits are where it’s really substantial though,” Bond says. “Part-time people at Harvard can get health [benefits] whereas at other places you have to be full-time to get health.”

“We haven’t faced any difficulty [winning contracts] though because everyone is on the same playing level,” he added. Katz adds that a “dramatic” drop in employee turnover—a result of higher wages and better benefits—is lowering Harvard’s operational costs. “Turnover costs are a major cost in running a corporation,” he says.

Contractors also say that the parity policy has made them into the benevolent employers they always want to be—if only to their Harvard employees.

“These are things we’re going to do with our company but it’s not always possible when you’re in the private sector because they’re only concerned with the bottom line,” says Ken Foscaldo, General Manager of AM PM Cleaning, which cleans 5 Brattle St. “We care, but we’re constrained with our finances. [The parity policy] is great for a company like us that wants to do good by our employees.”

Frank C. Valerio, General Manager of American Cleaning Co.—which pays its workers at Harvard $2/hr more than all their other employees, not including the greater benefits—says that Harvard added money to their contract to cover switching part-time workers to full-time workers in accordance with the parity policy.

“Harvard has stood by us,” Valerio says. “That stuff wasn’t covered in the contract we had with them, so they told us not to worry about it because they said we’ll pay you the difference to comply. They did that retroactively for two years back until 2001.”

Valerio says that positions at Harvard are the most sought-after positions at American Cleaning Co., with the rare job opening going only to the most fastidious workers and those with the greatest seniority.

“We’ve been there two and a half years and no one leaves,” Valerio says. “We post the positions if that does happen, and we give them to the people with most seniority. But it’s been tough because no one leaves.”

Bond observes the same phenomenon. “[Positions at Harvard] are obviously coveted positions but there is a very low turnover at Harvard,” he says. “When you get in there you’re apt to stay.”

“INSIDE MONOPOLY”

The labor landscape as it currently exists would be virtually unrecognizable to Harvard workers and administrators from the ’70s, says Professor of Economics Lawrence C. Katz, when virtually all Harvard custodial, dining and security workers were employed directly by the University.

Katz claims that this “monopoly” on services by in-house unionized workers forced Harvard to pay high wages even though it received relatively low productivity in return.

“Given the growth of private contracting [nation-wide], it’s not surprising that [the University] would have moved to private contractors,” he said in an interview last month. “They were facing an inside monopoly.”

Even with the high wages and low productivity, it was years before the bureaucratic inertia of “every tub on its own bottom”—University-speak for the decentralization of labor policies across departments and school—was overcome and labor policies were centralized, an essential first step to contracting out work.

“There was very lax management under [former University President] Neil Rudenstine,” Katz said. “The University seemed to see central coordination of contracting practices as an infringement upon free speech. No, that’s just good management practice.”

According to statistics recently submitted to the City of Cambridge by the Harvard Planning and Allston Initiative, Harvard was the largest employer in the city last year, with about 10,000 people registered in its non-academic workforce for the 2004 Fiscal Year. That population includes both unionized in-house workers—employees who receive their paychecks, benefits and hours directly from the University—as well as all workers who answer to Harvard’s three major service contractors.

While an October 2004 vendor summary shows that there are about 30 such contractors in all, Harvard’s largest, most visible providers are Sodexho USA, which supplies workers in food service; UNICCO, which handles maintenance; and the Allied-Barton, which employs all security guards on campus. Sodexho and UNICCO workers are unionized in HEREIU and SIEU, respectively. Allied workers are not unionized.

The move to the centralization of labor policies culminated in the creation of the Vice-Presidency of Human Resources, a position with some authority over the human resources departments across the University and reporting directly to President Summers.

Marilyn Hausammann, the former human resources director of the Boston Consulting Group who assumed the new position Oct. 25, would not comment for this article.

“She’s just too new to have any opinion on outsourcing,” said her assistant Susan Kany, after repeated attempts to obtain comment from Hausammann.

STATE OF THE UNION

Dozens of unionized workers across the University, both Harvard and contractor employees, said they had little to complain about. Harvard workers told reporters that they are not worried about losing their jobs to outside companies. Workers with outside vendors felt that they were being paid as much as their Harvard counterparts. Most of the unionized workers were confident that their unions had negotiated fair wages and benefits on their behalf.

What was definitely perceptible, however, was a sense, especially from workers who used to or currently work for Harvard, that there’something special about being able to call Harvard home.

Jon Boucher, an electrician with the in-house maintenance professionals working for Harvard’s Facilities and Maintenance Operations (FMO), said his job gives him stability that he would not get from an outside employer.

“Obviously there’s an advantage to working for the university directly,” he says. “Most of the tradespeople worked construction before we came here, and you’d never know where you were going in the morning. They’d call you up and say ‘there’s no work today, don’t bother coming in.’ It’s nice coming in to the same place every day.”

Skillman, the former security guard, remembers his days at Harvard fondly, recalling the annual Employee Appreciation Day (later axed by the Office of Human Resources).

“All the employees got to go to the first football game of the year at Harvard, and we’d mingle with the students, and we’d introduce our kids and families to the students we were protecting,” he says. “It was nice. They had a big picnic.”

In 1999, Skillman recalls, Rudenstine honored him alongside his colleagues for his 25 years of service at a special ceremony at the Law School.

“He would come and tell us how much he appreciated the work we were doing,” Skillman says. “There were janitors, guards and everyone there who had 25 years of service. He’d tell you how grateful he is for us taking care of the students and the buildings. He was sort of patting us on the back.”

Today, he says, his back is against the wall, with his unemployment set to run out soon and no job prospects in sight.

The labor situation at the University seems stable, with no appearance of imminent conflict. But union workers are not ruling out the possibility that more outsourcing will occur in the near future.

“The Medical School made a decision on their own that they no longer wanted [to work with the FMO],” Boucher says. “They wanted to go with an outside contractor. I guess you could say that the Law School, or the Business School, could say the same thing tomorrow.”

That potential has raised flags with labor activists on campus, many of whom have recently spoken out against outsourcing at rallies sponsored by the Harvard Social Forum and the new guard of PSLM, who have once again placed the issue of outsourcing at the top of their to-do list for this school year.

“Outsourcing is still an easy way for Harvard to undercut the power of unions,” MacKinnon says. “It’s an even more important area for us to be pushing back on. It’s always the way Harvard has avoided paying higher wages and actually being responsible for the workers who are doing the work of the university.”

It’ll be something of a reprise for the once-ascendant labor group, and although their plans do not include anything as dramatic as a sit-in, a series of teach-ins may bring the issue back to center stage in Harvard labor politics.