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"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led
to safety) by menacing it with an endless series of hobgoblins; all of them imaginary." - H.L. Mencken
Crooked Energy CEO Gets 18 Years
Employee Advocate – www.DukeEmployees.com – April 5, 2006
Some CEO’s enrich themselves by any means possible. If they are not raiding the pension fund, they are cooking the books – some do both! They always seem to get away clean. But every now and then, one gets his wings clipped. Such was the fate of Davis Wittig, former Westar chairman and CEO, according to the Wall Street Journal. He was convicted on 39 counts of conspiracy, fraud, and money laundering.
The prosecution went for life imprisonment, but Wittig, age 50, got off “light” with only 18 years in prison. There is no option for parole, mind you. He must also pay $14.8 million in restitution and a $5 million fine.
Accomplice, Douglas Lake, former executive VP, was sentenced to 15 years in the pen. He was also ordered to pay a $5 million fine and $2.7 million in restitution.
Wittig once bragged to Fortune magazine about how big his salary was and his plans to retire at 40. Now he will really retire at age 50 – retire to the big house!
Wittig and Lake schemed to milk electric deregulation for all it was worth and soar with the eagles. But they are doomed to be only jailbirds.
Wittig and Westar made the news a few years ago for using lobbying money to get customized legislation passed. Westar found a willing political player in Tom DeLay.
Last week, Tony Rudy, former DeLay deputy chief of staff, pleaded guilty to corruption charges and is cooperating with federal investigators. Tuesday, DeLay announced that he would not run for reelection.
Many other energy CEO’s were tainted by the same all consuming greed. Energy deregulation was the vehicle. Money to lobbyists brought about favorable laws. Two former Enron CEO’s are on trial now.
Energy CEO Nailed on 39 Counts
New Duke Energy CEO Jim Rogers
Employee Advocate – www.DukeEmployees.com – April 1, 2006
An interview with Jim Rogers was published by The Charlotte Observer on All Fools’ Day 2006.
Mr. Rogers said “My contract looks almost identical to Paul's.”
Do not feel too sorry for Mr. Rogers because he will not receive a salary. He will be paid in stock, but the dividends will be paid in cash. These payments will be greater than the annual salaries of the majority of Americans. So, he will have cash rolling in without even touching his salary. Plus, there’s the $23 million change-in-control windfall he will receive.
Mr. Rogers said “I will be the single largest individual shareholder of Duke.”
The most amazing thing he said was that he will meet with a group of retirees in Greenville! When people retire it’s a lot like being flushed down the toilet. They are written off and forgotten. They seldom receive a cost of living adjustment to their pensions, if they are lucky enough to still have a pension. Many retirees earned fully paid health coverage for life by working for 30 years. The earned it, but they do not receive it. The premiums for the “fully paid” coverage continues to skyrocket.
Mr. Rogers could not get off to a better start than by listening to retirees. He said “I might get some very good advice from them.”
Retirees have always provided advice to Duke Energy executives, and it has always been promptly ignored. The prevailing attitude has been “We already have all we want from you. Please crawl off somewhere and die.”
Mr. Rogers is wisely going to follow the precedent set by Paul Anderson when he came back to Duke Energy. He said “I'm not going to be out giving speeches; my hope is to have hundreds of conversations, understand what Duke is all about.”
He said he will work to achieve the elimination of 1,500 employees without resorting to layoffs. Sometimes companies must lay off employees due to business conditions. When layoffs are politically motivated or made only to fatten the executives’ take, they probably cost the company much more than the few dollars saved.
Apparently, Mr. Rogers has no desire to follow the path of former CEO Rick Priory. He said “You need to be realistic about how you grow; you've got to be able to live up to promises that you make. You're much better off underpromising and overperforming. I believe in underpromising and overdelivering.”
Mr. Rogers says all of the right things. We shall see if he actually does all the right things.
Jim Rogers, Man of Contradictions
Welcome Cinergy Employees
Employee Advocate – www.DukeEmployees.com – March 29, 2006
Welcome to the incoming employees from Cinergy, even though the merger is not exactly a prize package for them. But it will be a prize package for the Cinergy executives.
The merger between Duke Energy and Cinergy will close on All Fools Day, according to The Charlotte Observer. The Cinergy executives will make out like bandits, with $143 million in payouts. Last year, The Observer reported that Cinergy executives would take home over $180 million in severance packages. $143 million, over $180 million, what’s a few million dollars one way or another among cronies?
Some executives will get the big payout AND keep their jobs! Now, that’s a win/win situation!
Jim Rogers is no doubt grinning from ear to ear. He will get a payout of about $23 million AND be the CEO of Duke Energy. Cinergy employees are not grinning. They know where all the money will come from. Jobs are being eliminated now, and benefits cuts are on the way. Cinergy employees have been notified that Duke Energy wants to outsource many of their jobs.
Duke Energy is looking for ways to force former Cinergy employees into cash balance plans. Current Duke Energy employees are suing to get out of the cash balance plans that they were forced into.
Pension Lawsuit Filed Against Duke Energy!
Which is worse, getting laid off or being forced into a lower paying job with less benefits at another company? Neither one is quite as good as a $23 million bonus and a better job! Cinergy unions are already clashing with Duke’s iron hand.
Expect to see more sparks fly after All Fools Day.
Duke Energy Squeezes ALL Cinergy Employees
The EEOC Stirs
Employee Advocate – www.DukeEmployees.com – March 24, 2006
Many Duke Energy employees have filed age discrimination charges with the Equal Employment Opportunity Commission (EEOC) over the cash balance pension conversion. EEOC officials met with employees and said that the cash balance investigation was the number one priority of the U. S. Equal Employment Opportunity Commission Charlotte District. All the charges were sent to the Washington office and actuaries were hired to investigate Duke Energy’s conversion.
When the corporations got their boy into the White House in 2000, news of the investigation dried up. But an interesting development has occurred since the cash balance plan lawsuit was filed against Duke Energy in February. The EEOC has been contacting employees who filed age discrimination charges to verify their contact information.
Pension Lawsuit Filed Against Duke Energy!
It is not known if the EEOC will intervene in the case, but it has collected a wealth of information regarding the Duke Energy cash balance plan. It is easier to get class action status granted in cases where the EEOC is involved.
EEOC Intervention in Workplace Complaints
Duke Energy Should Be Denied Taxpayer Subsidies
Employee Advocate – www.DukeEmployees.com – March 18, 2006
Below is the Public Citizen press release of March 17, 2006:
Duke Energy Should Be Denied Taxpayer Subsidies to
Build New Nuclear Reactors; Better Alternatives Exist
WASHINGTON, D.C. – Duke Energy’s plan to apply for a construction and operation license to build two new nuclear reactors at a site owned by Southern Co. in Cherokee County, S.C., should not be permitted to come to fruition, Public Citizen said today. Duke is angling to receive billions of dollars in taxpayer subsidies to defray the costs of applying for a license as well as operating the plants; it should not be given a government handout for the application, the organization said. Nor should the government issue a license. Not only does nuclear power pose a threat to public health and safety, but Duke Energy has a track record that indicates it has been dishonest with consumers.
No new reactors have been ordered in the United States for 30 years, and for good reason. Nuclear power is extremely expensive and not economically viable in the marketplace – no nuclear power plant has operated without taxpayer money since the nuclear power industry was born. It also poses a public safety and national security threat and creates dangerous highly radioactive waste, for which no country in the world has a solution, and will not be effective in addressing climate change.
Further, Duke Energy has one of the worst track records of energy companies in the United States when it comes to manipulating markets and cheating consumers. Duke Energy has been forced to pay $257 million to settle allegations of market manipulation and other misdeeds in the past three years. Consider:
- In September 2003, the U.S. Commodity Futures Trading Commission fined Duke Energy $28 million for manipulating natural gas markets.
- In December 2003, the Federal Energy Regulatory Commission fined Duke Energy $2.5 million, resolving an investigation into allegations that Duke engaged in market gaming practices during the California energy crisis.
- In July 2004, the California attorney general announced a $207.5 million “electricity price-gouging settlement” with Duke Energy for the company’s role in ripping off the state’s consumers during the energy crisis that led to forced blackouts and almost bankrupted California, harming many small businesses and consumers.
- The California Independent System Operator (CAISO) in 2001 rescinded $14.4 million in payments Duke Energy had received after the company did not make its power plants available for the California market. The CAISO then issued a $4.5 million fine against Duke for failing to follow California market rules during a declared system emergency.
- In July 2005, the Securities and Exchange Commission imposed a cease-and-desist order on Duke Energy because Duke’s internal accounting controls were insufficient to ensure that its traders properly recorded their trading activities. As a result, Duke Energy illegally classified $56.2 million of the company’s speculative power and natural gas trading operations.
If Duke is permitted to proceed with its proposal, taxpayers could be on the hook for cradle-to-grave subsidies, including:
- half the cost of applying for the license, estimated at as much as $45 million per application for pre-approved reactor designs;
- “risk insurance” to pay the industry for delays in licensing, which could be up to $500 million each for the first two plants;
- taxpayer-backed loan guarantees for up to 80 percent of the cost of a project, potentially costing taxpayers more than $2 billion per plant; and
- production tax credits of 1.8-cents for each kilowatt-hour of nuclear-generated electricity from new reactors during the first eight years of operation, estimated at a total of $5.7 billion in revenue losses to the U.S. Treasury through 2025.
For these reasons, we urge the government to deny Duke Energy federal dollars to subsidize the exorbitant costs of building new reactors and ultimately deny the company a license.
Renewable energy is a viable alternative to nuclear power and conventional fuels, and can meet the country’s energy needs without the burdens of carbon emissions or radioactive waste. In addition to renewable technologies
themselves, using energy more efficiently is an important part of moving to a clean energy future. The increase in energy demand Duke predicts can be met much more safely and effectively by efficiency measures than through building new nuclear plants.
Duke Energy Squeezes ALL Cinergy Employees
Employee Advocate – www.DukeEmployees.com – March 10, 2006
All of Cinergy’s union members are feeling the Duke Energy squeeze. A Cinergy employee wrote to not forget about the USW gas workers. He said that they are also being squeezed out by Duke Energy, just like the IBEW workers.
On www.iuunion.com, Local 600 President Jim Anderson stated: “The Company presented us with a list that consisted of 48 job eliminations, 3 jobs listed as work rule changes, & 64 jobs they want to consider outsourcing, each job has a different implementation date connected to it, ranging from April 2006 to November 2008.”
If the union members are being buffeted, try to imagine how the non-union Cinergy workers feel!
Duke Energy is trying to cripple the Cinergy unions from day one. If the unions do not stand up to Duke, they will lose a little more power each day.
Duke Energy Wants to Outsource Cinergy Jobs
Duke Energy Wants to Outsource Cinergy Jobs
Employee Advocate – www.DukeEmployees.com – March 9, 2006
Duke Energy has already reveled how it intends to treat the Cinergy employees, and they are not happy about it, according to the Cincinnati Enquirer. In addition to benefits losses, the Cinergy unions said that hundreds of their members could be replaced by vendors.
Duke Energy loves “outsourcing” jobs, and has been doing it to its own employees for years. Many Duke Energy employees, with twenty or more years seniority, have found that their job have disappeared. They were replaced by vendors, and in many cases the laid off employees were the replacement vendors!
How can that happen? The Duke Energy employee is told that his job no longer exists and the work will be performed by vendors. But if the employee wants to go to work for “El Cheapo Vendor Company,” he will still have a job. The employee will no longer work for Duke Energy. He may perform the same job, but only as needed. The rest of the time he will be on the road. Of course, El Cheapo Vendor Company pays less and has less benefits. If the employee does not take the deal, he will not receive the customary severance pay for laid off employees.
It does not matter how long a worker has been on the job or how good his work is. When Duke Energy smells a chance to save a dime, the employee is history.
Every cent possible will be squeezed out of the Cinergy employees. The $180 million dollars that will be given to Cinergy executives must come from somewhere. Expect Cinergy executives to vote for the merger and the employees to vote against it.
If Duke Energy can neutralize the Cinergy unions from the start, the employees can be picked off one by one.
Cinergy Union Workers Ready to Strike
Cinergy Union Workers Ready to Strike
Employee Advocate – www.DukeEmployees.com – March 8, 2006
It was only a matter of time until Cinergy employees would clash with the management of Duke Energy. Duke Energy has been suppressing unions for over a century. This battle was inevitable.
But who would have thought that the battle would erupt just days before shareholders are to vote on the merger? The Cinergy union conflict comes pre-merger, even as Duke Energy’s own employees wage legal war over pension losses. This could provide shareholders a clue of what’s to come, should the merger be approved.
Pension Lawsuit Filed Against Duke Energy!
The International Brotherhood of Electrical Workers Local 1347 is ready to strike over contract negotiations, according to the Cincinnati Enquirer. The Local 1347 contract expires the very day that Duke Energy wants the merger to take place – All Fools Day!
Local 1347 employees had previously informed the Employee Advocate that Cinergy was already trying to water down their contract.
Cinergy Employees Being Squeezed
Now Cinergy wants to lay off 10 percent of its members. Cinergy IBEW members know that after the merger there will be more non-union contract workers available to take their jobs.
9News asked if the union will strike if it does not have a contract by April 1st. The answer was “YES.”
Stephen Feldhaus, IBEW Local 1347 business manager, said "That's the last thing we want to do, that's the last thing our committee wants to do, I think that's the last thing our membership wants to do. But if it comes to push and shove, the problem here is it's over 10 percent this year. What's it going to be next year?"
It looks like the Cinergy employees are already on to Duke Energy’s management. Once the bean counters start taking away from employees, they never know when to stop.
Union members plan to demonstrate Friday at the Cinergy stockholders special merger meeting.
The North Carolina Utilities Commission should block the merger until the union contract is settled and the pension issue is resolved.
Voting Against the Merger
What Really Happened to Your Pension
Employee Advocate – www.DukeEmployees.com – March 6, 2006
Pension reporting has improved a little over the years. Every article used to sound like a corporate press release. Before writing a pension article, a reporter would call up a corporation’s PR department, and ask for information. Corporations were overjoyed for the media to spread their pension spin, and to do it for free!
The corporations never mentioned all the money taken from the employees' pensions. If one listened to enough corporate pension propaganda, he might even think that the corporations were trying to do the workers a favor!
The pension game is the same as its always been. The goal is to take pension money from employees. Only the methods and terms change, to keep people confused about the real agenda. When pension money is taken from employees, it can find its way into the executives’ pockets in the form of more perks, stock options, and bonuses.
The pension changes either take pension money that employees would have earned or they take money that employees have already earned, often through age discrimination. Taking money already earned is where corporations run afoul of the law. The pension grabbers try to disguise their violations by using cash balance conversions. The early retirement subsidy is taken with a cash balance conversion. But the “subsidy” is actually a benefit that has been earned by years of labor.
Senior employees often work for 25 years, earning an artificially low pension credit. At age 50, the pension credit is supposed to spike to make up for the slow beginning. When the plan is converted, employees are stuck forever with the artificially low pension credits, and the 5-year spike in credits never materializes. Employees go from earning the artificially low pension credits to earning cheap cash balance credits. They get the worst of both plans!
More likely, employees go into years of wear away, where they receive no new pension accruals. For many employees, their pension is frozen forever. The “cash balance credits” are an illusion. No individual cash balance accounts exist; it’s merely hypothetical. It is designed to deceive the employee into believing that he is still receiving pension accruals.
If an employee notes that his cash balance amount has grown from $150,000 to $160,000, he might think that he has gained $10,000. If his true pension value was $300,000 on the day of conversion, he has gained nothing! He can never gain any new pension money until his opening cash balance has grown from $150,000 go his original $300,000. The years it takes for this to happen is the wear away period. The employee may not have enough years left to work to ever get out of the wear away. His pension ended with the conversion, and he never even knew it.
Why has no corporation ever started a cash balance plan from scratch? Because these plans can only take money from an existing pension plan. If employees have no pension money to take, there is no reason to implement a cash balance plan. The actuarial firms sold cash balance plans to CEO’s as a way to take money out of pension plans, without the employees knowing what hit them.
You were just not supposed to find it out until you retired. Then it would have been a little too late.
$46.2 Million Pension Lawsuit Win
$1.13 Million Bonus for Fred Fowler
Employee Advocate – www.DukeEmployees.com – March 4, 2006
MarketWatch reported bonuses paid to Duke Energy’s executives, as filed on Securities and Exchange Commission form 8-K.
Fred Fowler, president and COO, knocked down a $1.13 million bonus for 2005 performance.
David Hauser, CFO, was awarded $706,000.
Jimmy Mogg, chief development officer, was awarded $720,000.
Ruth Shaw, divisional president, was awarded $667,000.
Duke Energy Executive Pay for 2006
Paul Anderson to be Appointed to Presidential Council
Employee Advocate – www.DukeEmployees.com – March 1, 2006
The White House announced that Duke Energy Chairman and CEO Paul Anderson will be appointed to the President’s Advisors on Science and Technology. That’s a well deserved honor for Mr. Anderson, and G. W. Bush certainly needs all the help he can get!
Paul Anderson could replace G. W. Bush and his entire cabinet, and do a much better job. But he will only be allowed to give advice, and Bush will only accept bad advice. Bush has a history of twisting the advice of experts to fit his own preconceived agenda. Things were so bad that a top Environmental Protection Agency official resigned.
A Top EPA Official Resigns
In fact, several senior officials at the Environmental Protection Agency found it so difficult to do their jobs under the Bush administration that they resigned.
Power Lobby Defeats the EPA
As EPA officials were blocked when they tried to enforce the law, more and more left.
EPA Officials are Bailing Out
Twenty-one organizations called for Senate investigations into charges that a top Bush EPA appointee gave untrue Clean Air Act testimony. EPA actions were said to follow the wishes of major electric utility industry contributors.
Senate Committees Asked to Investigate EPA
It was charged that the Bush administration was trying to “fix” legal problems facing contributors in the utility industry.
EPA Rules Altered to Suit Utilities
Bush ignores economists as easily as he does generals and scientists.
104 Economists Warn Bush
His whole cabinet has a history of ignoring good advice. Defense Secretary Donald Rumsfeld refused to listen to sound advice.
Retired General Says Warnings Ignored
National Security Adviser, Condoleezza Rice would not heed good advice.
New Whistleblower Exposes Bush
Even a former Bush cabinet member said that Rice ignored his warnings of impending attacks against America.
Rice Ignored Attack Warning by Clarke
The EPA inspector general even charged that their scientists have been under pressure by the Bush administration to alter analysis results to favor the energy industry.
EPA Charged with Skewing Analysis
A group of scientists signed this statement: "the scope and scale of the manipulation, suppression and misrepresentation of science by the Bush administration is unprecedented."
Scientists Charge ‘Suppression of Information’
EPA senior management was charged with ordering staff to find predetermined amounts of mercury emissions at power plants.
EPA Charged with Rigging Mercury Data
United States senators said that White House officials apparently "systematically went through the proposed rule and edited it to weaken scientific evidence demonstrating the health risks of mercury exposure."
Utility Industry Influence Probe
Can you name another president who has had over 4,000 scientists opposed their administration’s manipulation of scientific data?
4,000 Scientists Oppose Bush
The Bush administration pressured a government actuary into lying to members of Congress.
Actuary Pressured to Lie
The Bush administration actually admitted to improperly altering a health report.
Administration Altered Health Report
When given good national security intelligence, Bush ignores it.
Clark Blames Bush for 9-11
Other countries were ignored when they tried to give Bush warnings.
9/11 Warning Was Ignored
Who needs advisors? G. W. Bush has been know to create his own “evidence.”
Was Iraq ‘Evidence’ Manufactured?
What is different this time is the Bush is announcing who his advisors are. Bush and Cheney are still hiding the identities of the 2001 energy task force advisors.
Duke at Secret Energy Meetings
Paul Anderson is a clever man. Maybe he can get Bush to listen, where others could not. Of course, energy executives have always enjoyed favored status at the White House.
Voting Against the Merger
Employee Advocate – www.DukeEmployees.com – February 28, 2006
Who can blame employees of Cinergy and Duke Energy for voting against the merger? The merger will be a windfall for the Cinergy executives who will collect over $180 million. As usual, employees will pay the bill through lost jobs.
Cinergy employees cannot be looking forward to Duke Energy squeezing their pensions and benefits. Duke Energy employees recall what a disaster the merger with PanEnergy was. In preparation for merging with PanEnergy, Duke Energy forced most employees into a cash balance plan. The company has tried hard to deny any employee backlash, but things have never been the same.
The recent employee lawsuit against the Duke Energy cash balance plan will flush everything out into the open. It will be a bit more difficult for the company to pretend that there is no animosity between employees and management.
Duke Energy unilaterally created the “us versus them” conflict the day it created the cash balance plan.
The problem is: “Them” took the pensions from “us.”
Duke Energy has proven that it is not capable of living up to its promises to current employees and retirees. The last thing needed is more employees to war with.
One employee was not too subtle about why he wanted to know the percentage of stock owned by employees. He asked Duke Energy if all employees voted against the merger, what percentage of stock would that be. The answer was seven percent. Then there is the stock owned by Cinergy employees. Institutions generally vote in lock step with the directors, so the chances of employees stopping the merger are slim. Voting against the merger may not stop it, but it may make you feel a little better.
If the merger is force upon us, Cinergy employees and their unions will be welcomed with open arms. Cinergy executives will be viewed as parasites, sucking up money that may have once been an employee’s pension.
Positive Layoff Echoes
Positive Layoff Echoes
Employee Advocate – www.DukeEmployees.com – February 24, 2006
The Charlotte Observer ran a story about Duke Energy’s efforts to get 1500 employees to volunteer to be laid off. It quoted Duke Energy spokesman Pete Sheffield as saying "Early indicators are that the response to the voluntary window has been positive. It's clear that employees appreciate having that choice."
In comments to Duke Energy employees, Chris Rolfe, corporate human resources VP, said "The response was positive. We think folks appreciated having some choice."
When management programs some voice chips and pops them into the backs of the heads of some PR types, they will always parrot the very same line.
And another thing; the PR peddlers have never witnessed anything that was not positive, to hear them tell it! No corporate disaster can ever be so bad that they cannot put a positive spin on it. If poison gas killed everyone at a nuclear plant, the event would still get a positive spin. The Duke Energy press release would read: “No Radiation Released to the Public.” And it would be pointed out that the unplanned annihilation of employees would reduced the need for future layoffs! No matter what happens, it’s going to be positive.
It is not that these two particular feel good statements are untrue, it is just striking that they are nearly identical. The statements are, in fact, true. Employees who have endured all they can stand of Duke Energy only want out. Any money that will enable them to leave is certainly viewed as positive.
Did it really take Duke Energy over a century to discover that employees actually do want to control their own destinies? Yes, people had rather make their own decisions as to whether they continue working or not. When a company arbitrarily lays off employees, it’s a disaster for everyone. Those who wanted to stay are forced to go. Those who wanted to go, are left behind to toil. The company also pays a price for its ham handed actions, one way or another.
Even if all 1500 layoff slots are filled by volunteers, there is still a price to be paid. The loss of expertise cannot be ignored.
The following statement in the Observer shows that employees are concerned about the loss of expertise AND it shows that corporate intimidation is alive and well at Duke Energy: “Two workers, who didn't want their names used for fear of losing their jobs, said they're worried to see so much experience walking out the door.”
And speaking of choice, if the pension plan is converted after employees have worked 25-years under a different plan, employees also deserve to choose between the two plans. When long term employees get the worst parts of a promised pension plan and a cash balance plan, only a fool would choose the cash balance plan.
Some corporations give all employees a choice between the old plan and the cash balance plan. Under those conditions there are no squabbles and no lawsuits. When a corporation wants to extract the maximum amount of pension money from employees, it will force the cash balance plan on almost everyone. Forcing employees into a cash balance plan was never intended to benefit the “young, mobile employee.” Cash balance plans were designed to benefit the “old, fat executive.”
If Duke Energy is really confident that its cash balance plan is not illegal, why is it asking layoff volunteers to waive their rights to any pension settlement?
Early 2006 Waiver and Release Form
Early 2006 Waiver and Release Form
Employee Advocate – www.DukeEmployees.com – February 23, 2006
This waiver was available to eligible Duke Energy employees, without the benefit of a labor union, until 2/21/06. It contains the enhancements negotiated by the law firm of Wallace and Graham. Specifically, pending or future claims to Workers’ Compensation benefits are NOT waived in paragraph 5. And, paragraph 9 provides a 7-day window to revoke the waiver. A conspicuous notice of the Duke Energy Cash Balance Retirement Plan Lawsuit is also included.
IMPORTANT NOTICE-READ BEFORE SIGNING WAIVER AND RELEASE
Before signing the Waiver and Release in order to receive severance benefits, you should be aware that a class action has been filed in federal district court in South Carolina alleging violations of the Age Discrimination in Employment Act and the Employee Retirement Income Security Act arising out of the conversion of the Duke Power Company Employees’ Retirement Plan into the Duke Power Company Retirement Cash Balance Plan and the administration of the Duke Energy Cash Balance Retirement Plan. The plaintiffs seek to represent a proposed class defined as “all present and/or former employees of Duke Energy who participated in the Duke Energy Retirement Cash Balance Plan on or after January 1, 1997.” The case is entitled George et al. v. Duke Energy Cash Balance Retirement Plan and Duke Energy Corporation, Case No. 806-cv-00373-HFF (the “class action”). Please note that if you sign and do not revoke the Waiver and Release within the specified time, the Company will take the position as specified in paragraph 7 of the Waiver and Release that you have waived your potential claims and damages in that lawsuit. THE COMPANY STRONGLY ADVISES YOU TO CONSULT LEGAL COUNSEL BEFORE SIGNING THE WAIVER AND RELEASE. The lawyers who filed the class action are as follows:
James R. Gilreath
William M. Hogan
THE GILREATH LAW FIRM, P.A.
110 Lavinia Avenue
P. O. Box 2147
Greenville, SC 29602
Charles W. Whetstone, Jr.
Cheryl F. Perkins
WHETSTONE MYERS PERKINS & YOUNG LLC
1303 Blanding Street (29201)
P. O. Box 8086
Columbia, SC 20202
Mona Lisa Wallace
WALLACE & GRAHAM, P.A.
525 North Main Street
Salisbury, North Carolina 28144
WAIVER AND RELEASE FORM
Employee ID Number
Note: The term "Company" in this Waiver and Release Form includes Duke Energy Corporation (“Duke Energy”) and all of its affiliated companies (“Affiliates”), which shall consist of any other corporation, or other entity in which Duke Energy Corporation holds, directly or indirectly, an 80% or greater ownership interest. “Company” also includes any employee benefit plan established or maintained by Duke Energy or any of its Affiliates, and any administrator, trustee, fiduciary, or service provider of any such plan.]
1. I understand that the Company has established "The Duke/Cinergy Merger Integration Severance Benefits Plan (PN 561)” (the "Plan") for eligible employees who satisfy all of the Plan's requirements for entitlement to Plan benefits, including the execution of this Waiver and Release (or other waiver form acceptable to the Company). The Severance Payment and other benefits of this Plan will be provided at Company expense and are in addition to the regular salary and benefits package to which I am otherwise entitled as an employee. I acknowledge that I have notified the Company of my decision to volunteer to terminate my employment with the Company under the Plan, and that the Company accepted my decision.
2. I acknowledge that I have received and read a copy of the Plan document and Summary Plan Description. I also acknowledge that the Company has provided me with written information identifying: a) any class, unit, or group of individuals covered by the Plan, any eligibility factors for the Plan, and any time limits applicable to the Plan; and b) the job titles and ages of all individuals eligible or selected for the Plan, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the Plan.
3. I understand that, under the terms of the Plan, if I sign and do not revoke this Waiver and Release, I will receive a Severance Payment in an amount equal to *******************, subject to withholding for taxes and other lawful purposes, as well as outplacement services, up to Two Thousand Six Hundred Dollars ($2,600.00) in education reimbursements, and I will be eligible for COBRA or retiree group health premium payments made on my behalf for up to six (6) months. I understand that in order to receive the Severance Payment, as well as the other benefits described in this paragraph, I must enter into and sign this Waiver and Release.
4. I understand that I have until ****************, 2006, a date that is at least forty-five (45) days from the date I received this form, in which to consider whether to sign and enter into this Waiver and Release. I understand that I may not sign and enter into this Waiver and Release before the termination of my employment with the Company. I understand that in order to become entitled to the benefits under the Plan, I must return this signed Waiver and Release to *****************************, by that date, *****************, 2006. I FURTHER UNDERSTAND THAT THIS SIGNED WAIVER AND RELEASE WILL NOT BE ACCEPTED AFTER THIS DATE.
5. In exchange for my becoming entitled to receive the Severance Payment and other benefits under the Plan, I voluntarily and knowingly waive any and all claims and rights which I might have arising out of or related to my employment with the Company and/or the termination of my employment with the Company. I also voluntarily and knowingly release the Company, its directors, officers, employees, agents, and other representatives from any and all liability and damages, including but not limited to liquidated damages, arising in any manner whatsoever out of my employment and the termination of that employment. This Waiver and Release includes, but is not limited to, claims and rights under: a) the Civil Rights Act of 1991 and Title VII of the Civil Rights Act of 1964, as amended; b) the Age Discrimination in Employment Act of 1967, as amended (29 U.S.C. § 621, et seq., "ADEA"); c) the Older Workers Benefit Protection Act of 1990, as amended; d) the Americans with Disabilities Act; e) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including but not limited to fiduciary claims; f) (if applicable, list specific state law); g) any other federal, state, or local law or regulation, including any law or regulation concerning discrimination based on race, sex, color, religion, national origin, citizenship, age, handicapped or disabled status, and Vietnam era veteran's status; h) the Worker Adjustment and Retraining Notification Act or any other federal, state, or local law or regulation relating to notification of any plant or business closing or employee layoff; i) and any express or implied term or condition of my employment with the Company, including any claim for wrongful discharge, breach of contract, or claim for compensation. This Waiver and Release does not waive rights and claims that may arise after the date I sign this form, nor any pending or future claims to Workers’ Compensation benefits.
6. I understand that by signing this Waiver and Release, I do not waive and release any rights and claims to any benefits due to me under the terms of any employee retirement benefit plan maintained by the Company in which I am a participant. The specific application of the Waiver and Release to my benefits under the Duke Energy Retirement Cash Balance Plan (“Cash Balance Plan”) is explained in paragraph 7 below.
7. SPECIAL PARAGRAPH RELATING TO CLASS ACTION LITIGATION. You may or may not know that a class action lawsuit was commenced on February 6, 2006. Here is the caption of that case: Kenneth Walton George, Dennis Reed Bowen, Clyde Freeman, George Moyers, Jim Matthews, and Henry Miller, on their own behalf and on behalf of a class of persons similarly situated v. Duke Energy Retirement Cash Balance Plan and Duke Energy Corporation, Case No. 8:06-CV-00373-HFF, pending in the United States District Court for the District of South Carolina. This paragraph deals with that lawsuit, and any lawsuit asserting similar claims (the “Cash Balance Plan Litigation”). The Cash Balance Plan Litigation seeks additional benefits under the Cash Balance Plan, and other relief.
The Company and the Cash Balance Plan intend to defend themselves vigorously in the Cash Balance Plan Litigation and take the position that no damages should result from the litigation. You should consider the Cash Balance Plan Litigation in connection with this Waiver and Release, because the Company and the Cash Balance Plan will take the position that this Waiver and Release completely releases your rights in the Cash Balance Plan Litigation.
In the event that a court in the Cash Balance Plan Litigation should rule that despite this Waiver and Release you are entitled to some recovery of benefits under the terms of the Cash Balance Plan, you agree that you will get only the difference, if any, between what you have been paid under this Waiver and Release and what you would get under that ruling. In the event that a court in the Cash Balance Plan Litigation should rule that despite this Waiver and Release the Company or the Cash Balance Retirement Plan must pay damages other than benefits under the Cash Balance Plan, you agree that you will get only the difference, if any, between what you have been paid under this Waiver and Release and what you would get under that ruling.
You are free to consult with counsel representing the plaintiff class in the Cash Balance Plan Litigation whose names and addresses are set forth on the attached Notice. You may, of course, contact any other lawyer. You are encouraged to discuss this matter with the lawyer of your own choosing.
8. I understand that nothing in this Waiver and Release prohibits me from reporting any suspected instance of illegal activity of any nature, any nuclear safety concern, any workplace safety concern, or any public safety concern to the United States Nuclear Regulatory Commission, the United States Department of Labor, or any other federal or state governmental agency. I further understand that this Waiver and Release does not prohibit me from participating in any way in any state or federal administrative, judicial, or legislative proceeding or investigation or filing a charge of discrimination with an administrative agency. I understand that should an agency pursue any claims on my behalf, by signing and not revoking this Waiver and Release, I have waived my right to any monetary recovery.
9. FOR A PERIOD OF SEVEN (7) DAYS FOLLOWING THE SIGNING BY YOU OF THIS WAIVER AND RELEASE, YOU MAY REVOKE THE WAIVER AND RELEASE, AND THE WAIVER AND RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL A PERIOD OF SEVEN (7) DAYS FOLLOWING THE SIGNING BY YOU OF THE WAIVER AND RELEASE HAS EXPIRED. YOU MAY REVOKE THIS WAIVER AND RELEASE BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO ______________________ AT THE ADDRESS IN PARAGRAPH 4 OR FAX NUMBER __________________. FOR THE REVOCATION TO BE EFFECTIVE, IT MUST BE RECEIVED NO LATER THAN THE SEVENTH (7th) CALENDAR DAY AFTER YOU SIGN THE WAIVER AND RELEASE. IF YOU REVOKE THE WAIVER AND RELEASE AFTER SIGNING IT, IT WILL BE NULL AND VOID, AND YOU WILL NOT RECEIVE THE SEVERANCE PAYMENT AND OTHER BENEFITS UNDER THE PLAN.
10. I UNDERSTAND THAT SIGNING THIS WAIVER AND RELEASE IS AN IMPORTANT LEGAL ACT, AND THAT BY SIGNING IT IN ORDER TO RECEIVE THE SEVERANCE PAYMENT AND ADDITIONAL BENEFITS UNDER THE PLAN, I MIGHT FORFEIT CERTAIN LEGAL RIGHTS. I ACKNOWLEDGE THE COMPANY IS ADVISING ME IN WRITING TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS WAIVER AND RELEASE.
11. It is understood by you and the Company that if any part of this Waiver and Release is held by a court to be invalid, the remaining portions shall not be affected.
12. I sign this form signifying my agreement with the understandings and acknowledgments listed and with the intent to be bound by this Waiver and Release and with the intent that this Waiver and Release will be binding upon me, my executors, administrators, heirs, successors, and assigns.
The link below is to the first waiver enhancement negotiated by Wallace and Graham:
Do NOT Take Severance Package Before Reading This
Another Hollow Duke Energy Program
Another Hollow Duke Energy Program
Employee Advocate – www.DukeEmployees.com – February 19, 2006
The latest program-of-the-month is the Duke Energy Diversity and Inclusion Business Imperative. You can tell from the title that it's going to be another real cracker jack program.
Diversity and Ethics were once the buzz words that were going to lead Duke Energy to corporate nirvana. It looks like the ethics part was ditched. Perhaps the Diversity and Inclusion Business Imperative is a realization that ethics is a hopeless cause at Duke Energy.
Duke Energy has been beating the diversity drum for some time. Touting a diverse workforce as a show piece is one thing, but to actually include this diverse workforce would be breaking new ground. The only new ground Duke Energy is noted for breaking is new and inventive ways to reward executives and ways to keep a lid on any input from those pesky employees.
Duke Energy says “An inclusive environment encourages all employees to contribute their unique perspectives and capabilities.”
But “include” implies that the opinions of these diverse employees may have some bearing on the direction of things that affect them. This all sounds nice, but is it practiced? Not a chance! It is just another hollow program. It’s another smoke screen to distract those with very short attention spans.
Consider the cash balance pension conversion. Did management ask you if you wanted one? Did you have a choice between retaining the benefits you were promised or getting something less – a lot less?
The conversion was justified by some gibberish about a mythical young mobile employee. No one has ever found this young mobile employee who was supposedly clamoring for a cash balance plan. Management bought into the line spouted by the cash balance plan salesmen. Duke Energy did not really care what the justification for the conversion was. Senior management just wanted to take millions of dollars out of the pension plan.
Duke Energy assumed that there would be no pension repercussions because its employees were just too dense to realize what was happening. Duke Energy further assumed that, in any event, the employees would never have the wherewithal to effectively challenge the Duke steamroller.
Paul Anderson came back and thought he could avoid conflict with employees by fixing all the problems except the cash balance conversion. Sorry, Charlie, it did not work out that way. The cash balance plan still stinks! How well has ignoring the problem worked out so far?
All important decisions are always made by senior management to benefit only senior management. Their decrees are then force fed to the “masses.” If employees cannot be “included” in decisions concerning their retirement future, why would they care to be included in any sham programs, designed to be a diversion?
The cash balance conversion is costing employees plenty, but it is also costing management. Employees lost pension money. But management lost reputation, employee morale, goodwill, and respect. When a new CEO comes in and embraces the worst HR failure ever, then he is only one step above being in the pension plunder perpetrator category. Paul Anderson is a pension plunder perpetrator perpetuator. He did not cause the problems, but he fully endorses them and wants them to continue forever.
The pension conversion is not having the desired effect on the young mobile employee either. Duke Energy has to spent a lot of time and money to attract only a few new recruits, and they often leave within two or three years! Some stay just long enough to get all the training and walk out the door the next day.
Duke Energy got exactly what it wanted – the young MOBILE employee. Oh, it seem that management did not want them to be quite that mobile! New employees see through the rhetoric and realize that what Duke promises is not what one gets. Senior employees are only too happy to fill them in on what has happen in the past and what to expect in the future. Who do you think new employees trust – their coworkers or management, that they witness to be untrustworthy?
The executives have created a situation where many senior employees only want out, but no longer have the retirement benefits to be able to go. New employees frequently want no part of what Duke is selling and only use their jobs as a staging ground for better jobs, with better companies, making more money. This is the “success formula” that Duke has set in motion.
Duke Energy’s programs and initiatives are killing it. What can be done to turn the disaster around? Why, another new program, of course! Duke created a program to find ways to retain its defecting new employees!
What about taking half of their benefits? No, never mind, that did not work too well the last time.
Duke Energy employees and retirees continue to sign up for the cash balance lawsuit every day. Former employees are getting on board also.
Duke Energy employees are more excited than they have been in years. It’s not the Duke Energy Diversity and Inclusion Business Imperative they are excited about – it’s the chance for pension justice!
Pension Lawsuit Filed Against Duke Energy!
Three Labor Unions at Cinergy
Employee Advocate - www.DukeEmployees.com - February 18, 2006
Cinergy employees have said that they are blessed with three labor unions. They have UWUA Local 600, in addition to the two IBEW locals: 1347 and 1393.
International Brotherhood of Electrical Workers:
Utility Workers Union of America:
Cinergy Employees Being Squeezed
Duke - Page 6