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Layoff a shock after lifetime of work

At age 62, Linda Hall, of Spokane, was laid off for the first time. She was a caterer at the Spokane Club. (Rajah Bose)
At age 62, Linda Hall, of Spokane, was laid off for the first time. She was a caterer at the Spokane Club. (Rajah Bose)

Caterer had to fight for benefits after her job was eliminated

Linda Hall, of Spokane, has worked hard all her life but hasn’t earned any respect from the labor market. Laid off for the first time at age 62, Hall has no health insurance, not enough savings for retirement and almost no chance of getting hired again.

“A year ago I was absolutely certain that I had job security,” Hall said. “Change is a part of life. But, truthfully, until a few weeks before (getting laid off), I just didn’t see it coming and couldn’t imagine such a thing happening.”

Like many older workers, Hall is confronting America’s new economic reality.

“If you worked hard, chances are you’d have a job for life, with a decent paycheck and good benefits and the occasional promotion,” President Barack Obama lamented in his 2011 State of the Union Address. “That world has changed.”

Baby boomers like Hall are more likely than previous generations to keep working, or at least looking for work, as they get older. Since hitting a low of 29 percent in the 1990s, the labor force participation rate for older workers (those who are 55 and up) has risen to 40 percent today. The increase is partly due to employers offering stingier retirement plans than they once did.

The unemployment rate for older workers is lower than for their younger counterparts, but older workers’ unemployment spells last longer. The average jobless person age 55 and over during 2011 spent a full year unemployed, compared with 39 weeks for the broader workforce. Older workers are more than twice as likely as their younger counterparts to be unemployed for 99 weeks or longer, according to the Congressional Research Service. In February, nearly 2 million of America’s 12.8 million jobless had been out of work that long.

How does a person wind up in such a bad spot? It’s not clear from the data. Education, surprisingly, doesn’t provide guaranteed protection. The CRS found that unemployed workers with advanced degrees were no less likely than high school dropouts to become 99ers. Hall said she has a master’s degree in education.

From the perspective of workers themselves, age discrimination is the obvious explanation.

“I know a lot of people that even if you’re very qualified, (employers) think you’re overqualified. They’re worried you’re going to cost them in health insurance,” Hall said. “It is happening routinely, everywhere.”

Reapplying for her job

With no pension, Hall knew she needed to get back to work quickly. Shortly after losing her job last July, she zeroed in on a catering position at the upscale Spokane Club.

“I am writing to express my interest in the position of Catering Captain that was advertised by the Club on Craigslist recently,” she wrote in her cover letter. Hall’s experience in operations, management, sales and training would be invaluable to the club, she wrote.

Hall had good reason to think she’d be a fit for the position: She’d worked at the club since 1993. Management was making her reapply for her own job.

Club CEO John Pilcher said intense competition had been pushing down profits and had forced the club to overhaul its catering department, which staffs the equivalent of 10 full-time employees. He declined to comment on Hall but said the club, which operates as a member-owned nonprofit, didn’t single out any workers.

“We did restructure the entire department after looking at the competitive landscape in our community and what other catering organizations were doing in terms of compensation,” Pilcher said. “Our business was declining rapidly. … We were losing business to our competitors because of our pricing structure.”

Hall said she understood the club needed to be competitive with other venues that hosted catering events, but she was still surprised when she had to apply for her own job. She considered herself a model employee. “I was like, what?” she said. “I was flabbergasted.”

Pay cut a sticking point

Nevertheless, she decided to reapply. Qualified candidates would need to be able to oversee the dining facilities for private events like banquets and weddings, according to the job description. They’d need to have years of similar experience, the ability to deal with specific customer needs, a deep knowledge of fine food and wine, and a tolerance for frequent crouching, stooping, lifting, lots of walking and hours of standing.

“My credentials include certification from the state of Washington as an alcohol server/mixologist safety instructor, and WA state vocational certification to teach Culinary Arts and Hospitality,” Hall wrote in her application. “I grew up in this business. My mother was wildly popular for her five restaurants, catering service, and pasta factory back in my hometown of Miami, Florida, where I held every possible job from cashier to Catering Manager in the family business.”

Then Hall encountered the final part of the application, which required her to sign a document laying out a new compensation scheme. It would cut her pay from $10.04 per hour to the minimum wage (at the time $8.67 per hour). Additionally, management would begin taking 40 percent of the catering staff’s tips, up from less than 10 percent previously. Hall said customers’ bills would include a 20 percent “service charge” instead of the 18 percent gratuity the club used to charge, but the customers wouldn’t know less money would be going to workers.

Pilcher said customers would know the difference between a gratuity and a service charge. “It is our belief that if the term tip or gratuity is used that customers assume 100 percent of monies collected go directly and exclusively to service staff.”

Hall estimated the changes would cost her at least $10,000 a year, about a third of her income. “It was like a sucker punch to the stomach,” Hall said. “How can you do this to the people that have been here 15 or 20 years? How can you do this to us?”

Hall said she considered working at the reduced pay until she could find something better. Ultimately, though, she couldn’t take the indignity.

“I know that my qualifications, experience, and proven track record … are worth more than the minimum wage,” Hall wrote in a new letter to management. “My current wage, $10.04 was hard won over 18 years of miniscule raises of less than a dime or quarter a year. So, I just can’t agree to that.”

‘Like a no-fault amicable divorce’

Worker advocates sometimes call the kind of tip pooling scheme Hall encountered “tip theft.” It’s a common practice at places like hotels, stadiums and country clubs.

California, Massachusetts and New York have made it illegal to charge what customers would consider a gratuity but withhold the tips from workers, according to Restaurant Opportunities Centers United, a union group for service workers. Lawmakers in Rhode Island are considering a ban as well.

Pilcher said everyone at the club took a pay cut, not just catering staff. He said he himself is earning half his former salary. It’s all thanks to declining membership.

“We’re down somewhere around 20 percent from our peak in membership around eight years ago,” he said. “We stabilized some last year, but we’re declining a little further this year.”

Hall suspected the club was trying to get rid of her because of her age. Still, she had worked at the club since 1993 and wanted to leave on good terms, noting in her letter that her work had afforded her a family.

“Between my wages at the club and teaching in Spokane Public Schools I was able to raise my kids and send them to college. I am thankful and proud of myself and them,” she wrote. “I could try to fight this or I could gracefully accept the situation for what it is. … I don’t want to drag this out. I prefer a clean break and a new start, like a no-fault amicable divorce.”

Denied unemployment

Even if Hall had filed a discrimination claim, such suits are harder than ever for claimants to win. In 2009, the Supreme Court ruled that instead of having to prove age was a substantial factor in a demotion or firing, plaintiffs in age discrimination lawsuits must provide direct evidence that their age was the decisive factor – something labor law experts say is extraordinarily difficult to do.

So Hall just asked for her remaining pay, the other half of her Christmas bonus and a little bit of honesty from her employer. “Please don’t put some drivel up on the board that says I am retiring to spend more time in my garden or some such euphemism,” she wrote, alluding to the treatment she says other laid-off workers had received. “Just tell the truth: my job was eliminated and I am no longer an employee of the Spokane Club and wish me well.”

Hall received a letter from the club stating her position had been eliminated. But if the club wished her well, it showed it in a funny way. When Hall applied for unemployment insurance early in August, the club appealed the claim, and in September the state ruled her ineligible for benefits. She lawyered up.

As the appeals process got under way, Jan Quintrall, who had stepped down as president of the Spokane Club’s board of trustees in June, wrote a Spokesman-Review column bashing bogus unemployment claims.

“We are taking issue with the state going through the motions to review cases but awarding unemployment even when the staff person was terminated for cause,” Quintrall wrote in October as Hall fought for her benefits. It was one in a series of columns Quintrall penned to complain about dishonest unemployed people.

“Now, I know there are still a large number of people who are unemployed or under-employed and really looking for a new place to work,” Quintrall wrote in an earlier column. “But there also seems to be a growing number of people who enjoy not working and are making a career out of job avoidance. Businesses are paying for this, and it makes hiring staff more expensive.”

To Hall, who said she had helped cater Quintrall’s wedding, the columns stung.

“I was so sad, because it was right after this happened, and I wanted so badly to write a letter to the editor, but I was right in the middle of this hearing,” Hall said. “Not only do you lose your job, but they treat you like some kind of mooch on society.”

Quintrall, who has since taken a job leading business and development outreach for the city of Spokane, did not respond to requests for comment. Pilcher said decisions about unemployment claims would not have reached the club’s board of trustees.

Running out of benefits

It’s more common than it used to be for companies to challenge unemployment claims. Compared with the recession of the early 1980s, employers are nearly twice as likely to allege a worker was fired for misconduct, thanks largely to the rise of third-party firms that companies pay to handle claim disputes (the Spokane Club didn’t hire such a company in Hall’s case).

In November, an administrative law judge ruled in Hall’s favor, allowing her to receive $428 per week in unemployment insurance. The letter from the Spokane Club stating Hall’s position had been eliminated likely helped. And even if she had left of her own accord, state law allows claims from quitting workers when a business reduces a worker’s wages by 25 percent or more.

Hall’s new challenge is to find a job. She’s now been without full-time work for eight months.

So what happens to people who have been out of work so long they run out of unemployment insurance?

The scant data available show about a third find jobs (most of which pay less than their previous jobs did) and another third receive some form of government support. The final third? Hopefully their friends and families look out for them.

Hall’s age makes her statistically more likely to run out of benefits without finding work. Washington’s Employment Security Department runs a training program to help people like Hall learn to fend for themselves, and she signed up for the department’s Self-Employment Assistance Program (SEAP), which offers one-on-one mentoring, referrals and lessons in business-oriented computer software. Hall hopes it will help her strike out as an entrepreneur.

She said she is launching two businesses. One is a continuation of part-time work she has done for years training other hospitality workers required by the state to obtain alcohol server permits. The other business involves “upcycling” unwanted junk into household accoutrements. Hall is optimistic, even though she is currently making less than she receives in unemployment insurance (her earnings are subtracted from her benefits).

“It’s working out for me,” she said of SEAP. “I’m very, very happy.”

Still, it would have been nice to keep her old job and the health insurance it offered, and Hall felt her dismissal was needlessly undignified. She does not think her situation was unique, however, knowing friends her age who’ve lost their jobs in similar fashion.

“You give years of excellent service for members,” she said, “and then they spit you out like a peach pit or something.”

Content by Arthur Delaney © 2012 AOL Inc. Used with permission


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