Saturday, March 19, 2011 | The mantra that city government should run more like a business — the most common of Republican refrains — has been taken to a new level in Costa Mesa over the past several months.
The new city council has done little things, like changing the city manager’s title to “CEO.” And it’s done drastic things, like put in motion a plan to outsource nearly half of the city’s services.
This business-like approach, the majority of council members say, is the only way to save the city from insolvency.
But no good business would handle a mass firing in the manner that Costa Mesa has handled the 213-person layoff it began on Thursday, say human resource experts.
The layoff notice was hastily decided upon, it came as a shock to the workforce and there was little or no one-on-one communication with employees about how and why they were being let go, according to interviews with a number of employees and Councilwoman Wendy Leece, the only council member who voted against the outsourcing plan.
The layoff notice has already drawn a legal challenge from the city’s employees union. And one Sacramento legislator said he would call hearings if cities continue to have problems with layoffs.
Handling a layoff in such a way goes against decades of lessons learned in the corporate world, said Kim Parker, who is the executive director of the California Employers Association.
“The key question is: was there a lot of communication and dialogue or was it a shocker?” Parker said. “If it is a surprise [employees] become very fearful and the there is a shock mentality.”
Employees were first notified of City Council’s outsourcing plan via a mass email on Friday, February 25. On the following Tuesday, council voted 4-1 to move forward with the plan and issue layoff notices, which are required by law to be given six months in advance of an actual layoff.
The notices were issued on Thursday. That afternoon Huy Pham, a 29-year-old maintenance worker who was due to be issued a layoff notice, jumped to his death from the roof of the City Hall building.
Pham’s death has brought intense scrutiny on how the layoff notices were carried out.
Assemblyman Sandre’ R. Swanson, D-Alameda, chairman of the Assembly Labor and Employment Committee, said Friday that if the way layoffs are handled by cities and counties “becomes more and more of a problem” it may be necessary for his committee to hold special hearings on the issue.
Pham, like many other city employees, was distraught about the possibility of losing his job, said several of this co-workers. “Everybody is depressed about the way this was handled,” said Billy Folsom, a fellow maintenance worker.
“Everything about it was hasty,” Leece said of the layoff. “[The council majority] had to seize the moment without thinking about the unintended consequences, the fallout.”
At a press conference Friday, City Manager Tom Hatch said the city would be reviewing the process by which employees were given notice of their layoff. However, he said: “I know in my heart the noticing process was done with care and compassion.”
Calls to Councilmen Jim Righeimer, Gary Monahan and Stephen Mensinger have gone unreturned.
Parker said anxious feelings among employees should be expected. However, she said, it is crucial that management make an effort to talk to each employee individually about the layoff in a private setting before the actual notices are given.
“Absolutely it should be offered,” said Parker of one-on-one communication between supervisor and employee. “It allows company to understand how many people are devastated by the news and will need help. And they need to start the process weeks in advance.”
Hatch said employees were given one-on-one meetings. “Every department director talked specifically to every employee,” Hatch said. “A lot of planning and details went into the process.”
But that is not what happened according to employees and labor officials. Employees said they were called into group meetings and given their pink slips and a packet that included a letter from the city that explained the layoff along with an informational booklet.
“[The maintenance department] met in the maintenance yard, and all of us were told at once,” said Hellen Nenadal, president of the Costa Mesa Employees’ Association, and a co-worker of Pham’s. Pham, who was off work with a broken foot, did not attend the meeting.
Costa Mesa should have taken lessons from the county, which went through layoffs following the 1994 bankruptcy and, more recently, in 2009, said Lisa Major, an assistant general manager with the Orange County Employees Association.
“The way that I understand that this was done is completely inconsistent — and that is treating it lightly — with prevailing practices,” said Major, who previously worked as an employee relations manager for the county government’s CEO.
“A good employer does it a certain way — one of the ways is to make sure the employees are not laid off in a group.”
When the county did its layoffs, Major said, each employee was told individually by his or her supervisor and a representative from the human resources department. The employees also had the option of having an OCEA representative in the room.
Parker said handling the situation in this way is vitally important because it provides the employee a private opportunity to ask questions and express emotions that they wouldn’t in a group setting. It also gives the supervisor an opportunity to tell the employee face-to-face that his or her contributions were appreciated and that the layoff is not their fault.
Without this feedback “their self esteem goes in the toilet,” Parker said. “They think ‘I will not amount to anything.’ Depression sets in, you have mental health issues cropping up.”
Leece and others interviewed said the highly charged political atmosphere surrounding the layoffs has exacerbated feelings of depression and anxiety among Costa Mesa employees.
“The employees have been demonized, disrespected and made to feel that it is their fault,” Leece said.
The other part about this layoff that makes it especially difficult to bear for employees, said Leece and others, is that they thought they had a deal.
“There is more of a commitment (than in the business world),” Leece said. “We are more of a family — the agreements we had with benefits and salaries were all negotiated in a fair manner.”
That is the argument made by Stephen Silver, a lawyer representing the Costa Mesa Employees’ Association. Silver has already sent a letter to the city demanding that the city rescind the layoff notices because the planned outsourcing violates the employees’ contract with the city.
Specifically, Silver said, it violates the contract’s “maintenance of benefits clause,” which states that all terms of conditions of employment are mandatory and must remain in full force and effect for the duration of the contract.
Silver said he has represented several other public employee groups during layoffs, but has yet to witness something like what Costa Mesa is attempting. “I have never seen a mass layoff like this,” he said. “This is crazy, this is all politics.”
Ironically, Costa Mesa’s plan comes at a time when Parker says the Great Recession has created a greater sensitivity in the business world to an employee’s emotional needs during layoffs, and sincere efforts to help them with the transition.
“Anybody who has any smarts and compassion knows that you need to give [employees] every ability to succeed,” Parker said. “You can’t just assume that they will just walk down the street and get another job anytime soon, because they probably won’t.”
Staff writer Tracy Wood contributed to this story