P-I, union tentatively reach deal on contract

The Seattle Post-Intelligencer has reached tentative agreement on a new, two-year contract with the union that represents most of its employees. But no settlement is imminent in separate negotiations between the union and The Seattle Times, both sides agree.

This year's contract talks between the Pacific Northwest Newspaper Guild and Seattle's two daily newspapers are playing out against an unusual backdrop: a long-running court dispute between The Times and the P-I's owner, The Hearst Corp., that the two companies recently agreed to submit to binding arbitration.

The arbitrator's ruling, expected next spring, could determine whether the smaller P-I survives.

The Newspaper Guild represents about 140 newsroom employees at the P-I and 600 news, advertising, circulation, marketing and composing-room employees at The Times. Under a 23-year-old joint operating agreement (JOA) the papers maintain separate news and editorial operations, but The Times handles the business side for both.

At the P-I, a major focus of the contract talks was protection for workers if arbitrator Larry Jordan issues a ruling that leads to closure of the paper.

P-I business manager John Currie and Guild negotiators said the tentative agreement includes more severance pay, especially for less-senior employees, and a commitment by the P-I to pay worker health-insurance premiums for six months should the paper stop publishing.

"The company didn't want to talk about it," P-I reporter Candace Heckman, a Guild negotiator, said of the possibility of a shutdown, "but our members were concerned about it, and we needed to represent them."

The tentative agreement, reached late Thursday, still must be ratified by P-I Guild members. The proposal also calls for a minimum $20-a-week wage increase this year, which most employees already received this spring, and a minimum $25-a-week raise effective next July.

At The Times, in contrast, the company has proposed a two-year wage freeze, which senior vice president Alayne Fardella has written "reflects the economic reality we are facing." The Guild has countered with a proposal for across-the-board $18-a-week wage increases each year.

The Times has agreed to open its books to the Guild. The paper contends the burden of publishing the P-I has hurt its profitability.

Other, smaller unions at the Times already have agreed to the wage freeze. But Guild negotiators maintain their members deserve some consideration for cooperating with the company in recent years on pension-fund changes and staff cuts.

Contract talks resumed Friday after a two-week hiatus. Times spokeswoman Jill Mackie would not discuss details. "We're still negotiating," she said. "We're making progress, but we're not where the P-I is."

The existing contract expires next Friday. Times desk editor Yoko Kuramoto-Eidsmoe, the Guild president, said the company seems eager to reach agreement before then, "but there's still a lot out there ...

"We're still moving. We're not moving at a breakneck pace, but we're not stalled either."

The Times is the flagship of The Seattle Times Co., which publishes six daily newspapers and two weeklies in Washington and Maine. Hearst, whose estimated annual revenue is more than 10 times that of the Times company, owns 12 daily newspapers and numerous magazines, television stations and other media properties.

This year's contract talks marked the first time since the 1950s that the two newspapers had not negotiated jointly with the Guild.

The Times-Hearst legal dispute dates to April 2003, when The Times triggered an escape clause in the JOA by notifying Hearst it had lost money, under a formula spelled out in the contract, in 2000, 2001 and 2002. Under the JOA, that three-year "loss notice" required Hearst to negotiate a date to close the P-I within 18 months.

Hearst, which maintains the P-I can't survive outside the JOA, challenged the validity of The Times' losses in court. The Times accused Hearst of using the P-I to bleed The Times into insolvency and force its majority owners, the local Blethen family, to sell.

Times has since notified Hearst it also lost money under the JOA in 2003, 2004 and 2005.

In March the papers agreed to put the court proceedings on hold and let Jordan decide whether The Times' losses are legitimate. Both companies have agreed there will be no appeal.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com