A UNION MADE IN HELLCURRENT AND FORMER YELLOW PAGES SALESPEOPLE SAY THEIR UNION BOSSES ARE MOST EFFECTIVE AT REPRESENTING THEMSELVES
Claudia Webb can't forget the day her late husband was betrayed by his union.
Reed Webb was a new salesman for the U S West Direct Yellow Pages in Phoenix. In 1991, his second year, Webb's sales were near the top of the highly competitive 30-member staff that sold the big display ads for the book.
He felt sure he was going to win the Yellow Pages equivalent of an Oscar--a trip to the President's Circle of Excellence. "Making Circle," as many salespeople call it, meant joining the year's heaviest hitters from U S West Yellow Pages operations in 14 states for a four-day romp in Hawaii.
All he had to do was place in the top four in his office, and Reed Webb was going to join the Yellow Pages big leagues, pampered and feted for making the company a lot of money.
But in November, Claudia Webb recalls, her husband was abruptly called into a meeting with U S West Direct management. Also present was Karen Ortega, the highest-ranking union officer for the International Brotherhood of Electrical Workers in the Phoenix office.
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Claudia Webb says that according to her husband's account of the meeting, which he related to his wife and co-workers, Ortega wasn't there to act as Webb's advocate, as would be expected of a union representative. Instead, she was leading the attack, insisting to management that some of Webb's accounts be adjusted and his performance ranking lowered so that he would not qualify for Circle.
Not coincidentally, Claudia Webb says, her husband's disqualification would mean that Ortega, also a salesperson, would move into the top four and qualify for Circle herself.
"Karen Ortega and some of her buddies wanted to go to Hawaii very badly, and they wanted to move up [in the rankings]," Claudia Webb says. "If a couple of the top people were gone, then they could go."
When her husband came home that night, he was shattered, Claudia Webb says. "He was just amazed because he was always 100 percent honest and did everything aboveboard," Claudia Webb says. "He was devastated that these people he thought were his friends would call him in and try to take away what he had worked so hard for."
Initially, the company refused to change the rankings, Claudia Webb says, but Ortega would not give up. Reed Webb's health took a turn for the worse--she says the stress of defending his integrity contributed to his ailments--and he had to be hospitalized.
While Webb was in the hospital, Ortega and other union stewards rifled through his accounts, looking for errors or mistakes that would convince management to disqualify him. "It was sick," says one of Webb's co-workers.
"While Reed was dying in the hospital, Karen was able to investigate his accounts," says Kathy Smith, another Yellow Pages salesperson at the time. Some of Reed Webb's accounts were taken away from him and given to others. "Reed was never in a position to defend himself."
On March 5, 1992, Reed Webb died of pneumonia. Claudia Webb does not believe that the troubles with the union caused his death, but they certainly added to his misery. He was 37 years old, and the father of one daughter. By that time, Ortega had succeeded in having Webb's name withdrawn from Circle. She would be going to Hawaii herself.
Family and friends did not want to tell Webb that he had lost the fight, his widow says. They let him die still believing that if he got well, he was going to make the Hawaii trip.
"He was a very sensitive person," Claudia Webb recalls. "He couldn't believe people would be out to get him in such a cutthroat way. He had been a strong union supporter. He believed in the union."
But the brazen, petty treatment that Ortega and the union gave Reed Webb has not been forgotten by many union members, and their memories of the incident are coming back to haunt Ortega.
Webb was not the only IBEW member in the office to be shafted by his own union, according to more than a dozen current and former employees interviewed by New Times.
They contend that Ortega--who likes to remind co-workers that she is the daughter of former Phoenix police chief Ruben Ortega--has used her years in the union hierarchy to sell out members like Webb and assure her own ascent.
Several current and former employees say the union would not file grievances for them when they asked. But, they say, Ortega and the union have a history of investigating members and then demanding that management discipline or fire them.
Company management, they contend, has turned its back on wrongdoing to maintain a faade of harmony, and out of fear of Ortega's father, who was chief of police during most of the time his daughter was rising within the company. (Ironically, Ruben Ortega, now chief of police in Salt Lake City, was an avid union buster who sparred often with the police and firefighters unions during his ten-year tenure. Ruben Ortega also used his office to target and investigate his political enemies and was considered by some to be the most powerful man in Phoenix.)
One U S West Direct employee says, "This is the most corrupt union . . . . that I have ever seen. It's not right what's happening to our lives, and these are our lives. You only get one."
Now, the National Labor Relations Board is investigating complaints by current and fired employees that the IBEW has run amok under Karen Ortega and other union officers.
A number of company employees has met secretly with the federal investigators in the past few months to provide information or give testimony against Ortega, the union, the company or all three. Several of those who have talked to the NLRB say agency investigators are "amazed" by what has been going on at U S West Direct.
Although he will not comment on the specifics of the investigation, IBEW attorney Duane Beeson contends that the NLRB is overreacting to the allegations. "My impression is that the labor board has never fully understood the underlying facts of the case," he says. The agency has scheduled a trial before an administrative law judge for early June to probe the union's activities and to determine whether Ortega and other officers are engaging in favoritism or abusing their offices.
So far, U S West Direct has not responded in detail to the NLRB charges, except to file a blanket denial of any wrongdoing. Additional charges against the union and company are likely to be added to the case, company workers say.
Since the NLRB charges first surfaced last October, fear and paranoia have run rampant through the U S West Direct building on North 22nd Avenue.
Since then, employees have been sneaking out of the building with company documents, either to share with the government or stash away should they ever need them in their own defense. Document caches have sprung up in the homes of U S West employees across the Valley.
Current and former employees say they can prove that Ortega and the union have trumped up charges against union members and caused them to be unfairly fired.
Further, the disgruntled unionists say they are funneling evidence to the NLRB that Ortega and at least one other union officer have been manipulating the company's mazelike accounting system to falsely pump up their own commissions and bonuses, effectively cheating the company and its shareholders.
In an unusual flurry of activity in recent weeks, employees say, locks and security access codes at the building have been changed and access to the company's computer records has been restricted. Workers say the actions have been taken to stanch the flow of incriminating evidence and documents from the building.
"It's a powder keg at work," says one salesperson. "I think the whole place is about to have a mental breakdown."
While there is no evidence, there is speculation about whether the union troubles account for the acid that was recently thrown on the car of one employee, or for the theft reported by another worker who had all four of her tires stolen. A few employees acknowledge that they are carrying guns and guarding their telephone conversations for fear that someone is listening in. After all, they say, this is a subsidiary of the telephone company.
"I'm scared," says one employee who went to a pay telephone to return a call to New Times. The employee suspects that the union and the company know she is one of the more than a dozen workers who are believed to be cooperating with the NLRB investigation. "I am seriously considering selling my house, so I can be ready to move out of here if I have to," she says.
Many employees do not want to talk if their names are published, pointing to others who they believe have been fired--and financially devastated--for crossing swords with Ortega and the union.
Ortega says she cannot discuss the allegations, on orders of union attorneys, and only will talk about the union generally. She says she and the other officers "conduct ourselves with honor and integrity."
IBEW attorney Duane Beeson, IBEW business agent Peter Pusateri and U S West management decline to discuss the investigation, or the fear and loathing that have taken over the normally placid Phoenix Yellow Pages office.
But last week, after New Times began making inquiries with company management and union officials, company president Sol Trujillo and a phalanx of dark-suited, somber-faced executives from the company's Denver headquarters unexpectedly arrived at the Phoenix office of U S West Direct.
A planned morning meeting of the sales staff was canceled as local management and the suits from Denver huddled in a conference room.
"Maybe that means they're finally taking this seriously," says a Yellow Pages salesperson. "Maybe we've got their attention."
@body:Yellow Pages sales is hardly the hourly wage, blue-collar-type work typically associated with unions, and the International Brotherhood of Electrical Workers is an odd duck at U S West.
Virtually all other U S West employees--including those that work for U S West Communications, the telephone company--are represented by the Communications Workers of America. The clerks and support staff of U S West Direct, the Yellow Pages subsidiary, also are represented by CWA. (CWA, according to some members, is deliberately keeping a low profile to stay out of the controversy engulfing IBEW.)
Only about 60 or so salespeople in Phoenix are represented by IBEW Local 1269, which also includes Yellow Pages salespeople for U S West in six other states.
Selling advertising for U S West Direct is a profitable, if stressful, occupation. Salespeople are paid a base salary of only about $18,000 a year under their current contract. But they can multiply that five- or sixfold if they have a good year.
The best of the 30 salespeople who handle Yellow Pages display ads--the big ads designed to stop someone's walking fingers and induce them to make a call--can realistically expect to pull down a six-figure income.
By nature, the sales jobs reward the hungry, and it is easy to see how greed, egos and savvy can clash among the sales force. Each year, the salespeople are given hundreds of accounts and two goals--sell as much as possible to new advertisers and convince existing advertisers to buy more. Performance is measured not by how much advertising someone sells, but by how much more they sell than the year before.
At year's end, the top salespeople receive the company's ultimate prize--entrance into the President's Circle of Excellence. The four best display-ad salespeople join their counterparts from all the other U S West Direct offices for a four-day trip to a pricey resort.
The company picks up the tab for a round of parties and lavish gifts like diamond rings for the winners. Since the junkets technically count as compensation under tax law, the company also gives winners money to cover the taxes on the trip.
When Karen Ortega ascended to high union office, current and former employees say, the normally hard-fought race for Circle began to turn downright ugly and the Reed Webb case was only one example.
Ortega, who has worked in Yellow Pages for years, had been a union steward until three years ago, when she ran unopposed and was elected to the Local 1269 executive board, making her the second-highest-ranking union representative for U S West Direct Yellow Pages salespeople in Arizona, New Mexico, Colorado, Utah, Idaho, Montana and Nevada.
Curious things soon began to happen. Top sales performers would suddenly find that some of their accounts were being questioned and investigated--not by the company, but by Ortega and the union.
Come year's end, salespeople who had been leading the pack would suddenly drop in the rankings because the union had challenged their sales figures. Meanwhile, Ortega and other union officers would shoot to the top, and see their names in the top four when Circle winners were finally announced.
Both in 1990 and 1991, company documents show and employees say, two leading salespeople suddenly dropped from the Circle rankings at year's end to be replaced by Ortega and another salesperson.
Ortega's success was particularly suspicious, employees say, because she would often be gone for weeks on end, traveling on union business, yet she would still beat out salespeople who were hustling full-time to increase their sales figures.
"We couldn't figure out how Karen kept getting in there [Circle]," says one current employee.
Circle contenders were not the only ones who say they found themselves challenged, and ultimately hung out to dry, by their own union.
"One day . . . Karen Ortega came to me and said, 'You have a meeting with [management] tomorrow,'" says Dave Stewart, who had almost 30 years with the company before he was told either to retire or be fired in 1988.
Stewart says he did not know what he had done wrong, but soon learned that, without his knowledge, the union and company had already decided that he should be let go because he was not selling enough. Stewart says he thought he was doing fine.
When he met with Ortega and Peter Pusateri, the union's San Francisco-based business agent, before his disciplinary hearing, Stewart says, they told him not to try to defend himself, but to accept whatever the company offered.
At the hearing, Stewart says, he was told he would be allowed to retire--thus keeping his pension benefits--or else he would be fired.
"What did I do? Nobody has ever answered that question," Stewart says. "I had no idea I was going to a forced-retirement meeting. The union did absolutely nothing in my case. They just sat there."
Rather than risk his pension benefits, Stewart says, he acquiesced. "I was treated like absolute dirt," he says.
Most galling, he says, is that instead of representing him, the union to which he had regularly paid dues for decades willingly participated in the effort to force him out.
Bill Daehler, another former salesperson, says he was also summoned to a meeting in 1987 where company and union representatives were present and given a choice of quitting or being fired, presumably because he was not making his sales goals.
"I said this is crazy. I'm at office average [for sales volume]," says Daehler, who had been with the company three years and three months. "[They] said they had the right figures, and that's the way it was going to be."
Daehler says he tried to get his union to file a grievance, but the union bosses would not pursue it. When he received his W-2 for the year much later, Daehler says, it confirmed that his sales had been reached the company's goals.
"I asked the union for a refund of my dues since they didn't do anything for me," he says. "They said that's too bad."
Leslie Griffith transferred to the Phoenix Yellow Pages office in 1991 after 11 years selling advertising in Los Angeles. She says she was marked immediately by the Phoenix IBEW as a union buster, because she had never joined the union in California.
Her first bid for a promotion was blocked, and she quit after three months.
"After 11 years in the business, I'd never seen anything like it," Griffith says. "It's a political, nepotism cesspool, in three words or less. There are rules for some people, and rules for other people, depending on who you are."
While suspicions abounded, no one was quite sure how the union, and most specifically Ortega, got away with what they did.
Around the office, Ortega seemed untouchable, workers say, immune from challenge by either union members or company management. Her fellow workers began, derisively, to call her the Queen Bee.
But Ortega's veil of secrecy began to unravel when the Queen Bee decided to go after the Top Gun.
@body:For six years running, Kathy Smith was one of the hottest salespeople in the Phoenix office. She made President's Circle every year from 1985 to 1990, first selling ads over the telephone and then moving up to the first-string "premise" sales staff, whose members hit the streets to sell the big display ads.
Smith's evaluations regularly judged her work outstanding, and she made a lot of money. Of all people, co-workers says, Smith is the one Karen Ortega and the IBEW should not have crossed.
"Kathy Smith was probably one of the best salespeople U S West Direct ever had," says one co-worker. "Kathy Smith is a very smart woman, and Karen Ortega underestimated her opponent. She made a big mistake when she messed with Kathy."
Smith, a recently divorced 36-year-old, is a particular woman who one former co-worker says possesses a near-photographic memory. In her showcase Peoria home, no small detail is overlooked. Her refrigerator magnets are in a neat row.
In 1990, Smith says, the die was cast for a run-in with Ortega that would ultimately cost Smith her job.
That year, Smith was again a leading contender for Circle, as were Reed Webb and Susan Chen, both hardworking new salespeople who had just moved from telephone sales to the loftier ranks of display advertising.
It seemed certain that Smith, Webb and Chen would be among the honored few for Circle that year, but then Ortega struck, Smith says.
"Karen went to management and got them [Webb and Chen] disqualified," Smith says. Ortega, she says, argued that the two should not be allowed to include in their rankings the sales they had made that year in the telephone sales department before switching over to display ads.
For years, Smith and other employees say, the rankings had always been done the same way, but when Ortega demanded a change in the computations, management agreed. Chen and Webb were disqualified, and Ortega qualified for Circle.
"Three weeks before the year-end report, they were called in and told they weren't going to Circle," Smith says. "Karen got to go."
Smith says she was outraged and challenged Ortega's maneuver. Her previous friendship with Ortega began to chill. By the end of 1991, in the next race for Circle, the two found themselves in full-blown battle.
The 1991 Circle prize was to be the best in many years, an all-expenses-paid trip to Hawaii. As the year drew to a close, Smith and Webb again were running at the top of the pack. Ortega was two notches below.
It was then that Ortega carried out her investigation of Webb, Smith and others say, leading to his ouster from Circle shortly before his death.
But Webb was not the only one forced out of Circle that year. Smith also was called into a meeting, at which Ortega challenged some of her accounts and insisted that Smith should not be allowed to go to Circle.
Ortega, Smith says, alleged that Smith must be cheating on her accounts, because no one could make it to Circle so many years in a row.
For a woman who had staked much of her reputation and pride on six years of being the best, the allegations were a mighty blow for Smith, and she held Ortega responsible.
"I was dumbfounded," she says. "I was sitting in the [sales] director's office being put on trial by Karen Ortega."
Management investigated Ortega's charges, Smith says, and ultimately exonerated Smith. But the damage had been done, and they would not allow her to attend Circle that year.
Smith says she went to Pam Norman, the office sales manager who is the top U S West Direct manager in Phoenix, and demanded to know why she was being excluded on the basis of unfounded allegations by Ortega.
"I said, 'Who do I work for, Pam? Do I work for you, or do I work for the union?'" Smith recalls. "Pam said the IBEW initiated the investigation and she had to allow them to follow through with it."
Smith was determined to regain her Circle post in 1992. Not only would she not make it, she would be fired.
Late last year, both Smith and Kimberly Seagraves, a telephone salesperson, again found themselves summoned to meetings.
Smith was accused of using her sales wile to doctor accounts to inflate her performance, and increasing her likelihood of going to Circle, by making it look like she had sold more advertising than she really did.
She was also accused of technical violations on entering accounts into the computer, even though that was not part of her job.
Seagraves, who says she scarcely knew Smith at the time, was accused of turning in advertising contracts that had not been agreed to by the customers.
Both women say that while their disciplinary meetings were presided over by sales manager Pam Norman, it was Ortega who acted as prosecutor.
"Did my union help me? Did my union defend me? No," Seagraves says. "I was defending myself against the union. Karen Ortega was my attacker."
The two women were suspended for three weeks while the charges were investigated. By the union, not the company.
Smith says, and other employees confirm, that Ortega took most of the files from Smith's office home, carting them out on a dolly one weekend, to look for evidence of wrongdoing. Seagraves' accounts were also scoured by the union.
Three weeks later, the two women were called back in and fired. Smith's hearing lasted eight hours, during which she was accused of fraudulent and improper behavior. Ortega was at the meeting, as was Peter Pusateri, the IBEW business agent from San Francisco who had flown in for the meetings.
Smith, however, remembered Reed Webb, and other things she had seen the union do over the years. Unknown to Ortega or the other union members and managers present, when Smith went in for her second meeting, she had a tape recorder concealed in her bag, with a microphone that looked like a pen sticking out of one pocket.
Every hour during the marathon session, Smith would excuse herself, complaining of a bladder infection, and go to the bathroom to change the tape.
Smith has given transcripts of the tapes to the NLRB. On them, Ortega at times jumps into the conversation and accuses Smith of wrongdoing. At different points, Ortega chides Smith to "listen" to sales manager Norman, and explains to Smith why a certain piece of information "nails you."
"She [Ortega] was judge and jury," Smith says.
Although the two firings seemed unconnected at the time, Smith says she believes she and Seagraves were fired at the same time for a reason.
Many of the charges against both women involved alleged discrepancies in accounting procedures that were handled not by Smith and Seagraves, but by the account assistants who input ad orders into the company computer.
At the same time Smith and Seagraves were being investigated and fired, one of the account assistants was also called in and threatened with termination. But because the assistants are represented by CWA and not IBEW, Smith says, that woman received a stout defense from her union and was not fired.
Smith says she believes the whole exercise was an effort to get her, and that Seagraves and the account assistant were dragged in to mask the true target.
But what Ortega forgot is that Kathy Smith is a particular woman who lines up the magnets on her refrigerator. She also keeps meticulous records.
@body:Out of work since her firing and facing the loss of her home, Kathy Smith sits in her home office and begins pulling out stacks of records from her sales days at U S West Direct.
She can prove, she says, that on each of the accounts for which she was fired, she did nothing wrong. The sums involved in the accounts were not worth it given the amount of money she was making, Smith says.
At most, she says, the alleged fraud would have made her about $2,400 in extra commissions, a tidy sum, but not enough to risk a $100,000-a-year job over. The gain would have been less than the taxes on a Circle trip, she says.
"The bottom line is that it was a personal vendetta by Karen Ortega, and it was her agenda that I be gone."
After she was fired, Smith began sleuthing. She contacted Seagraves and soon learned the similarities between their cases. Seagraves, too, had been fired for vague accounting errors that would have netted her no money while risking a great deal.
"Kimberly was making around $50,000 a year, and they fired her for trying to steal $17," says one current employee familiar with the case. "Gimme a break. Nobody puts that type of salary on the line for $17."
Late last October, Smith and Seagraves filed their complaint with the NLRB, charging that they had been discriminated against by the company and the IBEW.
The complaint was the first crack in the wall for Ortega, the IBEW and the company.
Since then, a parade of current and former employees has gone to the NLRB. Some have given testimony to corroborate Smith and Seagraves' charges that they were unfairly fired.
Others have turned over even more startling information.
According to several former and current employees who spoke with New Times, the NLRB is being given records that allegedly show that Karen Ortega and union steward Phil Wheeler--even as others have been fired for trumped-up charges--have themselves been manipulating the U S West Direct accounting system to reap thousands of dollars in improper commissions.
Two current and one former employee who have reviewed the computer records of two large advertising accounts--an appliance repair service account handled by Ortega and an electrical service account handled by Wheeler--say that the two businesses have in excess of $1 million in unpaid bills to U S West, but are allowed to continue advertising in the book despite company policies that should have excluded them.
Ortega and Wheeler, sources say, have continued to draw commissions on the accounts, even though the businesses have not paid for their advertising.
That is possible, they say, because the U S West Direct advertising sales computer system--called DART--is indexed by telephone numbers, not the names of businesses or advertisers.
According to current and former employees, the computer records indicate that Wheeler and Ortega have been playing a shell game with the telephone numbers under which large advertisers are listed in the system, to make it appear that they are new accounts when in fact they are old accounts with credit problems.
On computer printouts shown to New Times, the lines where the names of advertisers responsible for some of the accounts should be listed are blank. This masks the identity of nonpaying advertisers, workers say. It is against company policy to leave those lines blank.
"Phil Wheeler had an account that owed us millions. Millions," says an employee who has reviewed--and helped spirit from the building--printouts of company accounting and credit records. "It was approved to go in the book. Karen or Phil can do anything. I have seen it a hundred times over."
Ortega would not discuss the allegations. Wheeler declined to comment.
Duane Beeson, the IBEW's San Francisco attorney, said the union is fully prepared to defend its officers against any of the allegations and confident that it will be cleared.
Across the Valley, current and former U S West Direct employees do not echo Beeson's confidence. They say they are laying low and waiting for their day in court, when they can present their evidence against Ortega and the union. That day may come at the NLRB hearing, or in a later civil lawsuit.
Ortega says she is not afraid of the allegations against her. "I think that our record speaks for itself," she says of herself and other union officers. "We do this because we love it. I have always been a union advocate. I just believe in unions. I have a philosophy that there isn't a company in the world that has a union that didn't at one time deserve it. Our team shares that philosophy. We conduct ourselves with integrity and honesty, and I'm very very proud of our team."
Last month, the company announced this year's winners of the Circle of Excellenece Awards. Ortega, and Wheeler, will be attending again. But unlike years past, employees say, the company decided not to post the standings that show each salesperson's final figures.
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