State Employees File Suit Against Liquor Commission

From the State Employees’ Association of New Hampshire

Despite recurring years of banner sales and unprecedented revenue for the state of New Hampshire’s coffers, the NH Liquor Commission is putting the squeeze on its retail sales force.  As early as July 2012, disturbing allegations of mistreatment against Commission employees were reported to the State Employees’ Association (SEA).  A short time after the SEA began investigating these allegations, unilateral changes to the rights and pay for more than one thousand Liquor Commission employees were implemented by the State through a memo stating that part time employees were not considered “public employees.”

The change in treatment of the workforce comes at a time when the Commission is under close public scrutiny for alleged mismanagement.  The Commission, as part of the Executive Branch, falls under the watchful eye of Governor Lynch and its rank in file employees are covered by the Collective Bargaining Agreement between the State Employees’ Association of New Hampshire, SEIU Local 1984 and the State of New Hampshire.

“Today, we have filed two unfair labor practice charges with the Public Employee Labor Relations Board against the Liquor Commission.  With liquor store sales and profits skyrocketing, how appropriate is it for the state to be marginalizing the very workers who make those profits possible?  This is truly the ‘Walmartization’ of the state,”  said Diana Lacey, President of the SEA.

Prior to taking legal action, the SEA has talked with the Commission’s representatives, Kelly Matthews, Human Resources Director, Commission Chairman, Joseph Mollica, Commissioner Michael Milligan, and Matthew Newland, Governor Lynch’s appointed Manager of Employee Relations for the State of NH.  The SEA tried for four months to urge the State to rescind the policies the Commission recently implemented.  Last Friday, an additional meeting included representatives from Governor Lynch’s office, the Attorney General’s office, and Commissioner Linda Hodgdon and Director Karen Hutchins of the Department of Administrative Services.  No change resulted, thereby exhausting all of the SEA’s options at informal resolution of the issues.

Today, the Liquor Commission’s retail store part time workforce outnumbers its full time workforce by  six to one.  With 1,200 part-time positions, the Commission routinely staffs stores with more part time employees than full time, and typically schedules them for less than 30 hours per week so that they cannot access the State’s health insurance plan or earn retirement benefits.  Employees who work less than 30 hours per week also have rights under the SEA contract, including the ability to earn a raise based on good performance, and holiday pay, vacation and sick leave benefits on a prorated basis – but only if they are considered classified (public) employees.  By arbitrarily declaring these 1,200 workers are not public employees, the Commission has cut these workers – some of the lowest paid in state service – to the core and put their families in harm’s way. 

At this point, Liquor Commission workers feel they have no recourse for the treatment they are receiving.   The Commission has stopped participating in labor-management meetings to amicably resolve conflicts.  Several workers have been involuntarily transferred to stores farther from their homes, demoted, terminated or targeted in some other way, as if being punished by management for asserting rights more than 30 years old.  Employees have said publicly they are afraid every time they go to work that “this might be the day I’m transferred or this might be the day I’m fired.”

The Liquor Commission has been in operation for 79 years and its employees have fallen under the rights conferred to them within the SEA contract for 36 years.  The House’s recent investigation of the Liquor Commission captured the woeful treatment of these workers.  After learning that retail workers’ pay was cut, Chairwoman Lynne Ober stated that she has researched private sector retail operations and pointed out that most stores pay their part time workers time and a half for Sundays and holidays.  She questioned why the State would treat its lowest paid workers so terribly.

In July 2012, allegations of mistreatment and non-compliance with the SEA-State collective bargaining agreement surfaced.  The SEA began meeting with the Liquor Commission representatives soon thereafter.  Initial consensus was reached to try and address several issues through the labor management committee process.  There has been no progress achieved to date, with Liquor Commissioner Milligan and Chairman Mollica pointing to Matthew Newland as the controlling authority on the issues in dispute.  Mr. Newland has been unwaivering in his assessment of the situation.

Following the Labor Day holiday, NHSLC HR Manager Kelly Matthews issued a memo regarding the Commission’s decision to extend all store operating hours, and noting that all stores are now open on Sundays.  The memo arbitrarily implemented new interpretations of the employees’ contract between the State and SEA that resulted in the loss of approximately $2,500 in pay for hundreds of retail workers, and smaller losses for most other retail workers as well.  Wages are a mandatory subject of collective bargaining under RSA 273-A; the SEA asserts that implementation of the pay changes violate NH law.
 
·         Mr. Newland has asserted that the Commission’s part time retail employees are not “public employees” and therefore have none of the rights legally afforded to the State’s more than 10,000 public employees.  This sudden abrupt change in identification leaves these workers,
who are the face of the state’s liquor stores, without the most basic benefits and rights afforded public employees who are covered by the SEA contract. “These workers are stocking the shelves, ringing in the sales, and helping customers load their cars at a state owned and operated business.  It is ridiculous for the Governor’s employee relations manager to claim that they are no longer recognized as public employees.” said Diana Lacey, President of the State Employees’ Association.
 
The trend first seen in the private sector regarding a reliance upon part time workers over full time workers is typically attributed to preventing workers from accessing health insurance coverage, retirement benefits, and other forms of basic compensation that workers need to survive.  Since the Great Recession began in 2009, the State of NH has seen this alarming trend emerge within its own branches of government.   In the NHSLC alone, since 2010, full time employment has dropped by more than 30% while part time employment has increased by 25%.  
 
This represents a small savings to the state but comes at what cost?  For more children needing subsidized health insurance, more families needing food stamps and low income housing, and fewer families with an ability to keep a roof over their heads and heat in their homes?  Ironically, at last week’s budget hearing, Liquor Commissioner Mollica stated that “a happy employee is a productive employee.”  With the holiday season here and the subsequent increased number of customers at NH liquor stores, can one of the state’s largest revenue sources afford to treat their workforce so poorly?  This $600 million a year business relies on those workers for their success and NH’s taxpayers rely on that revenue to fund critical public services.
 
Since July, the SEA has been trying to address a number of arbitrary and unilateral compensation changes Mr. Newland is imposing across state agencies.  “On Friday, we confirmed in person that the State has chosen to waive its sovereign immunity from the federal Fair Labor Standards Act.  The FLSA does not discriminate against part time workers and will treat the State of NH as a singular employer – subject to all that the FLSA mandates.  We are anxious to work with our attorneys and members regarding this serious policy change and how it may affect workers’ rights in NH state government” said Lacey.