EUGENE, Ore.–Approximately 220 employees who work in Pentagon Federal Credit Union offices in Oregon, Virginia and Nebraska have been told they will need to relocate to Texas in order to retain their jobs, with at least one employee suggesting he and others were being “shoved out” of their positions. But PenFed said that is not the case, and that all affected employees will be guaranteed a role in their newly assigned location and will “receive relocation assistance and financial incentives to support their transition.”
As CUToday.info reported here and here, Virginia-based PenFed FCU has announced plans to expand in Texas. It is opening a new $48-million financial center in San Antonio that it said will create approximately 570 jobs (including the 220 relocated positions). As part of the deal, Texas Gov. Greg Abbot said the state will provide a $2.5 million grant to PenFed from its deal-closing Texas Enterprise Fund. The grant includes a bonus for hiring veterans. Separately, it is opening a facility in Frisco, Texas for a new mortgage servicing center at which it expects approximately 30 people to be employed. As CUToday.info reported in April, at that time PenFed said its mortgage servicing team will move to the new Frisco building, while the PenFed mortgage operations team will relocate to the recently purchased San Antonio Regional Financial Service Center.
In San Antonio, PenFed purchased two contiguous sites representing 12 acres that include a two-story, 146,000-square-foot office building, structure parking for more than 500 vehicles and surface parking for more than 450 vehicles. Site Two consists of 16 acres that can accommodate growth with the potential to be developed into an additional 100,000 – 140,000 square feet of office space.
PenFed CEO James Schenck said in a statement the credit union was seeking "a pro-business, military-friendly state" for the new center.
Employees Informed
A PenFed spokesperson told CUToday.info that on July 9 it informed employees it is relocating mortgage positions from Alexandria, Va. and Eugene, Ore. as well as some mortgage positions from Omaha, Neb. to the new San Antonio facility to bring mortgage lending operations together. Some information technology and mortgage training positions will also move to San Antonio, the credit union said, adding the transition will occur over the next 60 to 120 days and create a centralized PenFed mortgage hub in San Antonio.
“The transition allows PenFed to best support our member services, operations, and technology while optimizing capacity, co-locating employees together, fostering collaboration, providing long-term career growth and allowing for future employee growth to support our members,” the PenFed spokesperson told CUToday.info.
Employees Respond
Not all employees have reacted positively to the news. In Oregon, the Register-Guard said employees of the $24.5-billion PenFed during a meeting that consolidation is driven in part by being over capacity the Eugene building, where it said there is a lack of parking.
“If you can’t or don’t want to move to Texas then you’re going to be shoved out,” PenFed employee Michael Sale, who has worked at the Eugene location for eight and a half years, told the Register-Guard. “PenFed is not a company that struggles financially.” Sale told the publication the credit union just gave out a mid-year bonus.
According to the report, PenFed is offering $5,000 in financial assistance to those who choose to relocate. For those who opt to remain in Virginia or Oregon, PenFed is offering severance packages or the option to reapply for an open position locally.
100 People, Nine Positions
James Vanderzanden, who has worked for PenFed for 12 years, told the Register-Guard, “So far for the 100 employees (affected) in Eugene they’ve posted nine positions that are all entry-level.” Vanderzanden, who works in compliance, said his job is safe.
But PenFed told CUToday.info it is providing assistance to all affected employees to assist them in “transitioning to San Antonio or, if they are unable to make a move there, to another position within PenFed.”
According to PenFed, it has offered employees three “paths to move forward,” including:
- Impacted employees will be guaranteed a role in their newly assigned location and will receive relocation assistance and financial incentives to support their transition.
- For employees unable to relocate, PenFed will work to help find a different role at their existing location and level to ensure a smooth transition while maintaining their current salary for a time. “Today there are over 250 open positions in various departments, including the Service Center phone shops, Credit, Collections and Loss Mitigation, Fraud, Compliance, BSA/AML, and many others,” the credit union said. “PenFed understands the stress of changing roles and supervisors, and will work to find the best fit for each impacted employee.”
- If neither of these options is feasible or desirable to the impacted employees, PenFed said it will provide a “generous” severance package that includes, among other things, paid health care COBRA insurance during the severance period. For any employees transitioning out, PenFed said it will also provide outplacement assistance with cover letters, resumes, and career searches.
Workers Form Group
According to the Register-Guard, a group of employees in the Eugene, Ore. office has formed PenFed Workers United, and earlier filed a complaint against the company for “protected concerted activity,” including allegedly removing fliers put up by Workers United spreading its message, coercive actions and retaliations against workers.
The credit union settled the claim June 21 by agreeing to put up signage that confirms that the protected activity is allowed, according to the case docket, the Register Guard said. There are two other related cases against PenFed listed, according to the report.
PenFed opened its Omaha Service Center in 1992, followed by the Eugene office in 1996. In Oregon, approximately 100 employees are affected, according to the Register-Guard.
In its statement, PenFed said, “Through these changes we will continue to offer employees opportunities to grow personally and professionally. Impacted employees are encouraged to consider the opportunity to move to the new location or a new position. A number of PenFed’s past and present leaders were pioneers who made life-changing moves that benefited their careers, their families, and their new communities. Keeping with our pioneering history, all interested PenFed employees may pursue opportunities at our San Antonio Financial Service Center location.”