Is Peak’s maneuver legal — or fair?Don Day | February 28, 2009
Both Peak Broadcasting and Citadel Communications announced they would slice paychecks for employees this month. PB said it would pull 10% from all non-sales employees, while Citadel Boise asked for a 5% slice.
Peak and Citadel are doing what they think the must to survive, and clearly taking money from employees pockets is not an action taken lightly. However there’s a unique wrinkle here: the presence of personal service contracts. Employees – especially on-air talent – are asked to sign these agreements.
The bargain is simple: you sign a piece of paper guaranteeing you compenstation and a series of raises, and in exchange you promise not to work for a defined set of competitors. In some cases it is just the local market area, but in others it can apply to larger geographic areas or markets by rank (i.e. you can’t work for stations in anything smaller than market 50, for example).
Employers like this deal because it legally binds you from going to work across the street (disclosure: I am employed under a PSC). Employees don’t generally have a ton of choice in the matter since this is generally a requirement of employment — but they do provide some stability and a guaranteed raise each year.
Multiple source tell me that in Peak’s case, the company is requiring the contracted employees to take the cut. They have been told they must sign a document agreeing to the pay cut. However, it’s the other half of the deal that is at best problematic. Employees tell Idaho Radio News that they have been told if they did not sign the agreement, they are subject to immediate termination without cause.
Those employees have a contract – a piece of paper that guarantees them a job. Peak is telling employees that they must sign the pay cut addendum or be terminated. Experts I’ve talked to indicate this could be tricky for PB if an employee chose to challenge the tactic. A check of court filings shows no current lawsuits by employees against the company.
Yahoo HotJobs has some excellent advice:
If you have an employment contract, you may be able to refuse the cut altogether or at least quit and collect unemployment, but only if the contract states terms of compensation and says that your employer cannot alter the terms without your consent. The pay cut could constitute a breach of contract and an attorney can help you negotiate the terms of your release or fight for your full pay.
Another avenue is to contact your local unemployment office. IRN regular Jim Smith has offered to talk to anyone with questions – wheter it is from Peak, Citadel or elsewhere in the state. Call your any Job Service office statewide and punch in extension 3283.