WASHINGTON D.C. - U.S. Sen. Sherrod Brown (D-OH) today joined a group of Senators to announce the introduction of legislation that would stop failing businesses from denying employees the wages they have earned and retirees the pensions they were promised.
"When a company's bankruptcy filing means pink slips for skilled workers and millions for ousted CEOs, something is very wrong," Brown said. "This legislation would ensure that when a company files for bankruptcy, it must place a priority on meeting workers' claims for compensation and retirement benefits."
By changing the Chapter 11 bankruptcy law, the Protecting Employees and Retirees in Business Bankruptcies Act is aimed at reversing a trend in corporate bankruptcies whereby workers' claims for compensation and benefits are denied while executives' claims are given preferential treatment. The bill would stop failing businesses from denying employees and retirees their pensions, end the requirement that priority payments for wages and benefits be earned within six months of the bankruptcy filing, increase each worker's maximum wage claim entitled to priority payment from $10,000 to $20,000, and allow each worker to claim up to $20,000 for contributions made to employee benefit plans. The bill would also prohibit companies in bankruptcy from paying bonuses to executives, require executive compensation be disclosed and court-approved, stipulate that any back pay awarded through the federal WARN Act must be given the same priority as back pay received through other legal violations, and prevent rank-and-file workers from being the sole target for reductions in health benefits or pensions.
Last year, Brown introduced the Federal Oversight, Reform, and Enforcement of the WARN (FOREWARN) Act, which would strengthen the law requiring employers to notify workers and communities of mass layoffs or plant closings, and would close loopholes in the Worker Adjustment and Retraining Notification (WARN) Act. He is also the sponsor of Senate legislation that would provide funding for health care for Delphi retirees who lost their coverage due to General Motors' Chapter 11 bankruptcy filing. The bill would create a Voluntary Employees Beneficiary Association (VEBA) to provide health coverage to hourly workers in the IUE-CWA, IAM, USW, and other unions along with salaried Delphi retirees.
In addition to Brown, US. Sens. Dick Durbin (D-IL), Tom Harkin (D-IA), and Al Franken (D-MN) support the Protecting Employees and Retirees in Business Bankruptcies Act.