Daughter Faults Lee In Father’s Death

Mar 22, 2012 by

    By Roy Malone

    Davenport, Iowa — It was an emotional scene at the end of the recent annual meeting of Lee Enterprises, the newspaper chain that owns the St. Louis Post-Dispatch.

    There stood the young and very nervous Erica Douglas telling Lee directors and executives how her father, a Post retiree, died a few months ago after Lee cut off his health care benefits.

    Robert Douglas, who died in his home, suffered from diabetes and high blood pressure but was unable to get health care or the medicine he needed. He was 59.

    He was a conscientious and respected newsroom clerk at the Post for nearly 40 years. He and several dozen support staff were laid off in 2008 but knew they would get some severance, a small pension, and health benefits for life under the St. Louis Newspaper Guild contract. That perk induced more than 100 other newsroom employees to accept buyouts in 2005 and 2007.

    But then Lee cut off the health care benefits to the retirees. It is fighting in court to keep the Guild’s grievance from going to arbitration and possibly having to pay the retirees what the company had promised, in writing.

    Robert was told in November, 2010 that his health care was being ended and that he would have to pay 100 percent of his health care costs if he wanted to stay with the Post’s plan. If he did that, he would lose his $366 per month pension and still owe the company $214 each month. “I can’t afford to pay for it,” he told the company a year ago.

    He was too young for Medicare, was not able to get another plan, and didn’t qualify for Medicaid. He tried some health clinics with limited success. He cadged insulin from other diabetics but it wasn’t helping.

    “My father helped people all his life,” Erica read from her letter to the company. “But when he needed help, the company that he spent his life serving, threw him out and reneged on its promises.

    “On December 16, my family and I found my father’s body on his kitchen floor. He was 59. What a way to find your dad, the man who loved you and raised you, the man who taught you right from wrong.

    “Do you know all of the harm that you’ve caused your employees and their families? They are human beings, just like you. They gave their all, only to find out, sadly, that loyalty is a one-way street.

    “My father was Robert Douglas and I hope that you remember his name for the rest of your lives,” Erica said in closing, as she fought back tears.

    Mary E. Junck, chairman and CEO of Lee, said she was sorry about what happened to Robert Douglas. She then explained how the newspaper industry has fallen on hard times with the poor economy and how Lee, along with many other companies, found it necessary to cut costs, including the health benefits.

    Erica was accompanied to Davenport, Lee’s headquarters, with a contingent of Guild members from St. Louis. One, retiree Richard P. Hughes, presented the company with a bill for $7,792, the amount he said his wife is owed because she had to pay for his health insurance on her plan, after his was terminated by Lee.

— Roy Malone is a Guild (Post-Dispatch) retiree

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1 Comment

  1. Morrigan

    This is a very sad story. One thing I would like to see, as a shareholder of Lee, is a cut in management salaries as long as the health care pensions are unable to be fully funded. Right now total top management compensation (defined as compensation for the CEO, CFO and 3 VPs) is $2.9 million, which is down from $7.65 million from a few years ago but is still way too high given the results of the business. I would like to see their salaries cut in half at this point, with perhaps half of their overall compensation being in stock rather than salary, and with the savings used in order to fund retired employee health insurance.

    If Lee goes bankrupt for real (as in chapter 7, rather than a prepackaged chapter 11 one like recently happened), then all pensions go up in smoke, so that’s not the solution.

    If there could be some sort of constructive shareholder resolution about the health care for retired Lee employees, I’ll vote my block of shares for it. (I bought a significant number of shares recently when the stock price was ridiculously cheap recently, so unlike the rest of my stock holdings, my proxy vote actually matters when I vote for Lee’s resolutions.)

    I think that would be the best solution. I suggest looking up similar shareholder resolutions from other companies and seeing what has been done constructively to find real solutions.

    I highly suggest coming up with a shareholder resolution that:

    1. Is not unrealistic such that voting for it has a probability of leading to the death of the company.
    2. Can be afforded using Lee’s real, actual cash flows, which, we must keep in mind, are less than half of what they were a few years ago and are set to decline even further with the recent debt refinancing, which is going to almost double the interest expenses.

    If you can come up with something like that, you’ve got my vote.


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