This story was updated Tuesday, August 4, 2020, at 9 p.m. with more information.
Linda McDonald grew up in Bryant, Alabama, listening to the band Alabama singing about the virtues of getting a "job with the TVA" and building a better life for her family.
Seven years ago, after earning business and computer science degrees and certification and working in IT positions around town, the analyst landed her dream job with the Tennessee Valley Authority in Chattanooga.
Then last month, McDonald learned that her job was being outsourced to a contractor based outside of the United States.
"I feel betrayed, disrespected and heartbroken by the company for whom I have sacrificed so much and in whose mission for the people of the Tennessee Valley I had faith," the mother of two said. "But mostly I am terrified at the prospect of trying to find a job to support me and my family in the middle of a global pandemic."
While millions of other Americans are also losing their jobs as the economy suffers from the coronavirus, McDonald was among a half dozen soon-to-be displaced workers who got to take their concerns and fears to America's top leaders. Along with other TVA IT workers facing job losses due to outsourcing, McDonald traveled to the White House on Monday to personally tell her tale to President Donald Trump, Vice President Mike Pence and other administration officials.
After hearing the worker concerns, Trump vowed to save the workers' jobs, even if it meant sacrificing some of the jobs of TVA's top leaders.
"Let this serve as a warning to any federally appointed board," Trump said Monday after he fired the current and former chairman of the TVA board and signed an executive order to limit outsourcing by federal agencies like TVA. "If you betray American workers, then you will hear two simple words: 'You're fired.'"
As an independent federal corporation, Trump acknowledged that he can't directly tell TVA what to do. But Trump threatened to remove more of the presidentially-appointed board members if they don't order management to quit outsourcing U.S. jobs and keep paying the TVA president the highest compensation of any federal employee in America.
Trump signed an executive order Monday limiting any federal agency from using workers with H1B visas to replace U.S. workers. In response, TVA is reviewing its plans to outsource the IT work, adopting new limits on the use of foreign workers with H1B visas and extending the union grievance period for displaced workers to appeal to keep their jobs at TVA.
"I read the president's executive order, and I clearly hear the message — preserving as many American jobs as we can," TVA President Jeff Lyash said Tuesday. "We want to make sure that U.S. employees have good opportunities through our employment and supply chain practices, and we look forward to working with the White House in supporting future policies in this direction."
Although TVA requires all of its IT work to be done in the United States, the contractors hired to do most of the software work being outsourced this year are headquartered outside of the United States, and about a dozen of the 12o contract workers replacing TVA employees are foreign workers who are doing their jobs in the United States with H1B visas, according to TVA and union leaders involved in the change.
"TVA is now asking me to train the contractors that will be performing my job duties as soon as they are brought in," said David Littlejohn, a TVA employee in Chattanooga who has worked in IT engineering for the past nine years and is about to be a father. "I am given 90 days to teach these contractors everything I know, at which point I am sent home."
McDonald and Littlejohn are among about 100 IT workers in Chattanooga and Knoxville who have been given notice that their jobs are being eliminated as TVA outsources non-critical software development jobs to three contractors that specialize in such work.
McDonald said she is eager to stay at TVA because she believes in the utility's mission. She said the agency won't necessarily save any money by shifting the work to outside contractors. She praised Trump "for standing up for the working man" and putting American worker interests ahead of foreign-based contractors.
TVA adopts new approach
Lyash said Tuesday the IT employees at TVA who have received termination notices — both in a round of 62 individuals whose jobs were to end this summer and another 38 workers whose jobs are ending in October — will remain on the payroll while TVA goes through a review of the new executive order and completes all of the appeal processes for laying off workers at TVA.
Lyash said TVA will move to limit the use of H1B visas by contractors to TVA and seek to limit its own use of foreign workers under the visa program, except where it is unable to meet staff or work needs with American workers.
TVA currently has about 10,000 of its own employees, all of whom Lyash said are U.S. citizens, and employs about 12,000 temporary or full-time contractors which sometimes use foreign workers with H1B visas to work in the U.S.
Lyash said he talked with White House Chief of Staff Mark Meadows Monday and told him TVA will abide by the new executive order. Meadows said in a note to Trump that Lyash was "willing to reverse course" on the IT outsourcing.
But Lyash, who defended the previous decision to outsource the IT work as a way to help TVA "to be more efficient and effective," said he is unsure of what the final outcome of the review will be.
"We have a rigorous decision-making process that includes dialogue with the impacted union and an appeals process that is still underway," Lyash said. "We are still engaged in dialogue and are considering all of the relevant information. No potentially impacted employee from TVA will be let go until that entire process is complete."
Lyash said TVA "is constantly focused on improving efficiency and technology, and IT is an important part of that process.
"This focus drove us down the path with our IT organization and throughout the process of evaluating that IT strategy, we worked with our union partners and have been respectful of our employees who do such a great job," he said.
Nearly half of the 200 workers at TVA whose jobs have or could be eliminated by the outsourcing moves in IT have either retired, left TVA or found other jobs at TVA over the past year, TVA Chief Financial Officer John Thomas said.
Trump said he is determined to block federal agencies from outsourcing American jobs to foreign workers, and he vowed Monday to remove Lyash from TVA. Trump, who is paid $400,000 a year as president and donates his salary to charity, called the $8.1 million compensation package given last year to Lyash "ridiculous" and said the annual salary for TVA's president should be no more than $500,000.
"We're getting rid of him in one form or another," Trump said about Lyash. "Either the board is going to do it, we're going to do it, but he's gone. And he's done not a great job. He's done not even a good job, in certain ways. Plants in Kentucky — he could've kept the plant open in Kentucky, if he wanted to, even if they retrofitted the plant. And he didn't do that."
Lyash said Tuesday he serves at the will of the TVA board, but after 16 months on the job as head of TVA, Lyash said he hopes to stay with the federal utility.
"It's tough when you are a patriot and your commander in chief wants you fired, but I serve at the will of the TVA board and I would like to continue to serve," Lyash said.
The TVA president said the utility's operations have consistently improved since 2005 when TVA restructured its board, hired a CEO and began paying compensation more competitive with investor-owned utilities. The TVA board sets the pay for the TVA CEO and uses the Willis Towers Watson Energy Services Executive Compensation Database to compare TVA with 28 investor-owned utilities with revenues of more than $3 billion, plus five major government entities.
Lyash's pay is in the bottom 25% of those companies.
Nevertheless, Trump said he fired TVA Chairman Skip Thompson and former TVA chairman Richard Howorth because of their support for outsourcing American jobs and for voting to make Lyash the highest-paid federal employee in America.
With termination of the two TVA directors, TVA's board is down to five members, which is the minimum required to have a board quorum. Trump has nominated two new board members — former Tennessee House Speaker Beth Harwell and East Tennessee State University President Brian Noland — but they have yet to be confirmed by the U.S. Senate.
Trump has previously criticized Lyash and the TVA board for shutting down a Paradise coal plant in Kentucky, the home state of Senate Majority Leader Mitch McConnell, who also appealed to TVA to keep the coal plant running.
The TVA board voted to shut down the last of the three units at the Paradise coal plant in Western Kentucky before Lyash was hired as CEO in early 2019. But Lyash said he affirmed that decision as "the right thing to do for an aging plant." Since then, TVA power has been cheaper due to a drop in fuel costs and demand for energy, Lyash said.
Contact Dave Flessner at email@example.com or at 423-757-6340.