1984-04 April IBEW Journal.pdf - International Brotherhood of ...

SUPREME COURT BANKRUPTCY RULING
THREATENS COLLECTIVE BARGAINING
Organized labor will step up ItS efforts
to move Congress to amend the federal
bankruptcy code as a result of the recem
U.S. Supreme Court mhng which permits
even solvent compames to ImmedIately
cancel umon contracts by Ahog
for bankruptcy.
Pluggmg what labor considers to be a
gaping and unfair loophole In the bankruptcy
law now "has the lOp prlom)' on
labor's agenda, -, AFL-C10 Legislative DIrector
Ray ncm.~on hll .~ ~:l1cl
Labor leaders attendmg the AFL·CIO
Executive Council meeting In Sal Harbour,
Florida, when the deciSion was
handed down expressed dismay Imd anger.
Bm they added that the ruling W3S
not u nexpected and thaI legislation has
been introduced to correct H .
The AFL-CIO, saId the Council, will
"do everything in ItS power to ensure
that Congress corrects the Supreme Court
mistakc and vindicates national labor
policy."
The CounCil declared, "The Supreme
Court of the United St:ltes, in accordance
with It s normal pro-business lealllngs,
has now granted employers Wide permission
to use the banknlptcy laws to
destIoy collecuve bargallllng agreements_
"The Supreme Court was able to make
tlll:S JCI.:ISlon because Congress has not
spelled out the proper relationship between
the bankruptcy laws and the labor
laws," the Council continued.
"Given an opening. the Court'S conservative
majority fashioned a legal rule
that is best for busllless and worst for
workers," it said.
The high Court's February 22 rullllg
carne in two parts, the first part unanimous
and the second spin ;'j-4.
In the unanimous deCision, the Court
ruled that a bankruptcy COUrt may free
a company from Its union contracts with­
Out requITIng proof that the COntr3CtS
thre3ten the comp3ny's survival. The
company must Simply show that the
contracts arc a financial "burden."
In the closely spilt rullllg. the Coun
said a company m3Y abrogate a coll ccllve
bargaimng agreement as soon as It files
for bankruptcy while awaltlllg the deci'
sion of a bankruptcy Judge . The hank·
ruptcy court could later restore the
contract by rejecting the bankruptcy
petition.
The Council noted that the COUrt rnaiority
in the 5-4 ruling h3d ignored lhe
reasoning of a minority dissent written
by Associate lustlee Wilham I. Brennan,
J" Brcn n"" Wlute that the malorlty "Ius
completely Ignored Important poliCies
that underlie the National whor Rela ·
tlons ACt " of 1935 In pcrn1lttlng a com·
pany " Unilaterally to alter ;I collective
bargaining agreement "
Pernllttlng thiS, s[lId Brennan, l!o a
"threat to bbor peace." He added 1113t
the mllng will mean that " resolution of
the parlles' disputes will indeed be left
to the relative slfcngth of the comendlll)::
forces. "
A~ I'xamplcs, Hrennan notes that the
union workers at Continental Airlines
and Wilson Foods had gone on strike
after the compames last year tore up
their contracts.
The effect of the rullllg on the Conti·
nental case was uncle:I!. Airlines 3re
covered by the Railway Labor Act rather
than the NLRA. The Court noted that
Its ruling pertained to contracts under
the N LRA, not the Railway Labor Act,
where the bonkmptcy l:iw is specially
restricted from being used to get OUI of
union contracts.
AFL-CIO Spl.: .... lal Ce wa.,>
movlllg through the coun s, Contlllental
Alrltnes last September used the bank·
ruptcy petition deVIce 10 cancel colleclive
ba rg:lllllllg agreements with pilots,
flJght 3t!endants and machinists even
though the company wasn't short of cash
or :lbout 10 collapse. The :lidines' unions
arc sull on Strike and the AFL-CIO has
c311ed a national boycol! 10 support them.
AFL-CIO attorney Gold noted that followlllg
the enactment of b:mkruptcy law
amendments in 1978, making it easier
for both companies and individuals to
declare -bankmptey, there has been a
trend by employers to usc bankruptcy to
break or weaken ItS unIOns.
Gold s;ud the Supreme Court ruling,
unless reversed by Congress, will " Lll ­
crease the level of distress between employers
and unIOns, lllercase the number
uf lalNI Jll>pl,Jlt;~, "ud ClcalC greater lli'
stabilIty in coll ective bargallling."
Regardlllg the court 'S standard that
companies seeking to void thelT union
contracts through bankruptcy need only
show that the contracts 3fe a "burden,"
Cold said "collective bargaming agree·
ments arc always, If they're worth the
paper they're wnttcn Oil, an economic
burden on employers-cverybody would
Itkc 10 pay the mmlmum wage or
below."
Edllor'. NOle : As this issue of the Journal
was going to press late in March the U.S.
House of Representatives passed legis·
lation 10 save bankruptcy COl/rlS lrom a
March 30 shutdown while saleguarding
labor oonllacts from lirms that want them
scrapped during bankruptcy proceedings.
Similar legislation hali been passed by
the Senate. The legislation. which is elfpected
to go to joint Conference Committee
shorlly to Iron out any dil/erences
botween the House and Senate versions.
is aimed at rescuing a bankruptcy system
that the Supreme Court declared unconstitutional.
Eventual passage of such leg·
Islliliun is a top priority for organized labor.
Nelft month's Journal will carry more de·
ta!!s on this importa nt legislation as it
moves toward enactment Into law.
•
12 \ IBEW JOURNAL I APRIL 1984