Power Play

While Public Service execs enjoy a soft landing, employees face a hard future.

Stockholders are not usually a hostile crowd, especially when a company is posting record profits. At annual meetings, where the audience typically is made up of men in Brooks Brothers suits and women in pumps and pearls, the emphasis is on making money, not storming the barricades. Conservative investors complain about how boring these meetings are, and they often skip them.

Which made January's meeting of Public Service Company of Colorado shareholders all the more extraordinary. Well-heeled stock owners lined up at the microphone to attack company chairman Del Hock for the $20 million he and eight other top executives will share after PSC merges with Southwestern Public Service Co. of Amarillo, Texas, early next year. That merger, which has been touted as a win-win deal for consumers served by both companies, will create the 25th-largest utility in the United States, with $3 billion in annual revenues and almost 4 million customers spread over five states.

Hock defended the multimillion-dollar payouts, insisting the well-padded golden parachutes were needed to prevent his fellow executives from heading for the exits before the deal was done. Although Hock took home more than $717,000 in total compensation last year and PSC president Wayne Brunetti pocketed $481,000, Hock told the audience that the occupants of Public Service's executive suites needed further enticement to stay in their jobs during the merger, since those executives are "critical to the work that needs to be done."

But when several Public Service employees who also own shares criticized the utility's planned elimina-tion of 600 jobs after the merger, Hock suddenly waxed philosophical. "Change, as we have learned, is a difficult thing for all of us," he mused.

Of course, change can be less difficult for some. Hock has already announced he'll retire with his several-million-dollar bonus once the merger goes through. But while the executives running the company can parachute onto a golf course, the employees they leave behind would have no soft landing if they jumped the corporate flagship. Instead, many of them are suing their employer, for everything from sexual harassment to breach of contract. More than twenty lawsuits have been filed against the company by former or present employees in the last few years. Public Service has settled out of court in several of these cases, most recently in a sex-discrimination and harassment suit involving two southern Colorado women that included sensational allegations of peepholes in a women's locker room, industrial sabotage and crude sexual shenanigans.

In the Form 10-K document Public Service filed earlier this year with the Securities and Exchange Commission, the company assured investors that the employee lawsuits would have little impact on its "financial position or cash flow." With Public Service claiming that the merger with Southwestern will save the new company $770 million in costs over the next ten years, a few million paid out to distraught employees looks like chump change. It certainly hasn't fazed Wall Street, which has cheered the planned merger and boosted the utility's stock price. Even Colorado's public-utilities commissioners have given tentative approval to the deal.

Already reeling from one massive round of layoffs, PSC employees have braced themselves for more unpleasant jolts as the two regional power companies become one.

The employee lawsuits filed against Public Service come from all over the state, but there are certain patterns to the allegations contained in those suits. Many of them come from women working in power-plant jobs, and they make life at the utility sound like a descent into Dante's Inferno.

Last month Public Service settled out of court with Jane Gallegos and Marcia Oates, two women who worked for years at the Comanche power plant near Pueblo and sued the company for sex discrimination and sexual harassment in 1994. Terms of the settlement were not disclosed, and Gallegos and Oates's attorney said that as part of the agreement, they could not talk to the media. But affidavits filed in the case last April portray a work environment chillingly hostile to women.

Gallegos worked at Comanche for seventeen years, starting as an auxiliary tender and working with coal, fly ash, sulfuric acid and lime. She was one of the first women employed at the plant to do that type of work. "From the first day of my employment, I was treated like an outsider and separate from my fellow employees," Gallegos said in an affidavit. "I was continually set up for failure by co-workers and management. Not only did my male peers harass me, but the supervisors and managers did also. Supervisors have even sabotaged my equipment, turned valves off, opened valves, shut off pumps or motors, and messed with calibrations of chemicals."

She went on to relate a seventeen-year campaign of sexual intimidation from co-workers who resented her presence at the plant. "I was sexually molested; harassed; belittled; verbally, mentally and physically abused; bird-dogged; retaliated against, and given more than my share of low level jobs," Gallegos said. "There was, and still is, graffiti about women, and some was very descriptive and directly pointed to me. Some of the graffiti written was 'Jane gives good head'; 'Jane's a good fuck'; a picture of female genitals with my name on it, 'sweet lips Jane'; a picture of just breast and rump titled 'a perfect woman, Jane.'"

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