Workers Sue Newspaper Over Esop Termination

BELLEVUE

Six current and three former employees of The Journal American have sued the newspaper and its owner, Persis Corp., charging it withheld important information from employees when it recently terminated its Employee Stock Ownership Plan, replacing it with a 401-K retirement plan.

The union representing the workers, the Pacific Northwest Newspaper Guild, was also a plaintiff in the suit. The termination of the ESOP and creation of the 401-K occurred shortly after Persis announced the $250-million sale of its main newspaper asset, the Honolulu Advertiser, to Gannett.

An attorney for the workers, Cheryl French, said the group was seeking access to the audited financial statements of Persis, a privately held company, to figure out the value of Persis stock. That data would allow the workers to determine whether the amount of ESOP shares they received in the termination was fair, she said.

Journal American publisher Robert Weil, in a statement, called the suit "completely without merit. "We believe that Persis and the Trust handling (the) ESOP have acted both professionally and ethically in discharging their duties and responsibilities," he said.