June 21, 2018

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What about the Workers?

Enron Corp., Worldcom Inc., Global Crossing Ltd. The scandals and news of corporate greed, gross misconduct, lying executives and questions of accountability are all too familiar.

But what about the human toll? What has happened to the laid-off employees, the real victims in all of this?

Bill Kewin worked for Worldcom for 10 years and was laid off in June 2002, along with 5,100 other employees. At the end, working at a company deeply scarred by several significant layoffs and plummeting morale felt more like "'Survivor in a cubicle' than a job," he says.

While rumors of fraud circulated around the watercooler, former CEO Bernie Ebbers told employees not to worry about bankruptcy, that he was going to turn the company around, and that employees should buy more stock, says Kewin. "That pretty much cinched it for any thinking person, we were doomed."

When the end came, Kewin wasn't entirely surprised. "There were definitely signs," he says. "The previous layoff was so badly botched that we knew the company was too poorly managed to be able to avoid a massive layoff."

After the company filed for bankruptcy, ex-employees were given only the court-approved $4,650 -- the standard in bankruptcy cases -- and no severance plan health-care benefits, leaving thousands without medical insurance.

These days, Kewin and many former Worldcom employees have joined forces to form the exWorldCom5100 (exworldcom5100 on the Web), a group that is trying to secure full payment of severance pay and benefits based on the WorldCom Severance Plan. The site also has a private bulletin board and accepts donations (via PayPal) for a fund that is used to help former employees pay for food, medical insurance and mortgage payments.

So far, the fund has raised approximately $75,000. "Every penny is spent so far," says Kewin. "I think we have helped 50 families, but the list grows every day as people use up the last of their savings."

The AFL-CIO is also helping many ex-Enron and WorldCom employees get their fair due. The union has been able to get Enron workers three times the severance package they had been offered, winning about $80 million total. In addition, the union hired a lawyer and began a fax-and-mail campaign aimed at Enron's creditors' committee and company officials.

Beyond the tremendous financial hardship that many of these employees face is the emotional and psychological fallout.

Says Psychologist Steve Gravenkemper, vice president of Houston-based Organizational Consulting, "As people respond initially to this news, it is common for them to experience either shock or denial on an emotional level."

Once reality sets in, people will experience a wide range of emotions such as shock, anger, betrayal, fear, sadness and frustration.

Gravenkemper encourages people to accept these emotions as real and begin to work through them by discussing them with people who they are close to (family members, co-workers, etc.).

Sometimes, people will get "stuck" in denial or dealing with the range of emotions they experience after denial. "While it is normal that people experience these feelings, it is very important that they not allow themselves to remain there," he says.

"If they remain there, they risk adopting a 'victim' or 'learned helplessness' mindset. Each of these mindsets can serve as barriers to moving onward."

Among other emotions, Kewin says he felt betrayed at a personal level as he watched the boss's "drinking and golf buddies" get through unscathed, regardless of how well they did their jobs, while some of the most talented workers were axed without a second thought.

"People react more negatively to layoffs if they believe that the victims were treated unfairly," says Linda Klebe Treviño, professor of Organizational Behavior at Penn State's Smeal College of Business Administration.

"In the current cases, I suspect that employees who believe that their friends and acquaintances lost their jobs due to executives' greed will have a very negative reaction due to perceptions of injustice," she adds.

Another ex-WorldCom employee is Ben Barile, who worked for the company for 14 years. Unlike Kewin who had inklings of what was in store, Barile never saw it coming.

In June, Barile's boss called him to tell him he was being laid off. At the time, he was also told he'd be getting a substantial severance package (worth about $20,000).

It never materialized.

Three days after his severance package paperwork was processed, the company filed for bankruptcy.

"They never bothered to tell us (the employees) about the bankruptcy," says Barile. "I found out about it when I called a phone hotline to find out when I'd be getting my severance check."

Although he was completely blindsided by what happened, Barile took immediate action and wrote to his senator and contacted the AFL-CIO about recouping some of the promised severance package. He is still waiting.

Barile's already grim situation is made even tougher because he is HIV-positive and relied heavily on company-subsidized health insurance. Now, he struggles to pay for prescriptions and medical care as he continues to look for work.

In the aftermath of almost incomprehensible corporate corruption and injustice, many workers are left wondering: Is there anyway to recognize signs of trouble before it's too late?

"The best signs are probably in the reward system," says Treviño. For instance, is integrity rewarded in the organization? What kinds of people get ahead? Are they the good employees who do their jobs with integrity or the sleazy operators that lie to customers and step on colleagues along the way?

Employees should also pay close attention to how unethical conduct handled. Is it swiftly disciplined (as it should be?) or does it depend on the person's contribution to the bottom line or level in the organization (which it should not)?

Susan Battley, a leadership psychologist and clinical associate professor at the State University of New York at Stony Brook says a pattern of secrecy, arrogance or intolerance of diverse views among senior management is a warning sign that the company may be headed for trouble.

Another red flag is if employees are encouraged or coerced into bending policies, regulations or standards -- or if messengers of "bad" or contradictory news, including whistle-blowers, get punished or ostracized.

The bottom line, explains Battley, is that companies that exhibit these characteristics are "at greater risk of seriously compromising acceptable business ethics and practices." Employees should keep their eyes and ears open, take note, and consider their options, including a possible exit strategy.

Says David Batstone, author of "Saving the Corporate Soul" (Winter 2002) and a professor of social ethics at the University of San Francisco, "The soul of the corporation withers once a company loses its sense of value."

"A corporation that acts with soul puts its organizational structure at the service of the people it employs and the public it serves," he says. And when a company attempts to align its mission with the values of its workers, it's in a much better position for growth.

It's for this very reason, suggests Batstone, that senior managers need to step back occasionally from "the tyranny of the urgent" and ask their own people, "Why is it that you want to work here?" Workers that can't get inspired about what the company is about and what it stands for, he says, will not communicate a compelling message to customers.

Employees, in turn, need to think about what their company stands for.

"If it betrays their sense of value, and they are unable to change the environment to align who they are with the real company mission (rather than the published one)," says Batstone, "then it is time to start looking for a new place to work."

-Sacha Cohen
Overtime appears monthly through United Press International. Its author, Sacha Cohen, is a Washington-based writer who has been covering workplace and career issues since 1996. She can be reached at
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