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Waste Company Locks Out Teamsters in Bid to Eliminate Pensions

Teamsters Local 215 says it offered to extend the current contract into the future, but Republic insisted on eliminating pensions and replacing them with a 401(k).

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The Evansville lockout follows a strike by Republic workers in four cities in March. As I  reported for Alternet, that strike began in Mobile, Ala., where Teamsters charged that Republic attempted to back out of an already agreed-to contract settlement. The strike spread to New York, Ohio and Washington state, where Republic workers walked off the job in solidarity (some had the right to strike because their contracts had expired; others took advantage of contract language protecting their right not to cross picket lines).

After a week of rolling strikes, the two sides returned to the table and emerged with a deal the Teamsters hailed as a victory. During their strike, Mobile workers said that if called upon in the future, they would be eager to mount solidarity actions on behalf of Teamsters in other cities.

While lockouts are legal, Chaison says there’s “a big difference between whether they can do something legally and whether they can do it as a practical matter,” making “public support…very important.” When Republic holds its annual shareholder meeting Thursday, the Teamsters plan to draw attention to an estimated $23 million in benefits Republic has earmarked for the estate of its CEO when he dies.

Malizia says he'll present a shareholder resolution, on behalf of the Teamsters General Fund, "to give shareholders a voice" on such benefits: "We feel that like other severance-style agreements, shareholders should be given the right to vote on whether we feel that these executives were worthy of such" sums and whether "their performance at the company at the time and the circumstances merit such a compensation payout." In the past, the Teamsters Fund has also questioned Republic's political spending.

Malizia says the shareholder resolution was not motivated by the lockout; he notes that the Teamsters introduced a similar resolution last year and it received 45 percent support. But Malizia says that it "draws a sharp contrast when we're talking about multi-million dollar death benefits when the company is seemingly locking out workers over their right to continue to have a defined-benefit pension." 

In general, defined-benefit pensions are funded entirely by management, as part of an employee’s compensation; a pension fund promises a certain annual payout to retirees with sufficient years of service, based on the length of their tenure. 401(k)s are individual investment funds, funded by employee contributions and sometimes matching contributions (capped at a certain amount) by employers. A Feburary  study of public employee retirement funds by David Madland and Nick Bunker of the progressive Center for American Progress Action Fund found that “dollar-for-dollar defined-benefit pension plans are much more efficient.”

In interviews with the  Courier & Press last week, McKune said that withdrawing from the pension and contributing to the 401(k) would cost Republic more over the next three years than remaining in the pension. He said that despite that cost, Republic was seeking “to make our employees have a good retirement” by switching to the 401(k), citing concerns over the solvency of the pension. 

Local 215 President Whobrey retorted that the company was pushing the 401(k) in order to save money long-term. Whobrey told the paper that even the maximum 401(k) match would be less than the $107 per week Republic now puts into each employee’s pension, and many employees would not make 401(k) contributions, freeing Republic from contributing anything to their retirement at all.

As In These Times has reported, private pensions are in decline across the country. In bankruptcy negotiations at American Airlines, earlier this year unions  declared a defensive victory when management—under pressure from the federal Pension Benefit Guarantee Corporation—agreed to freeze workers’ pensions rather than liquidating them entirely. Under the pension freeze, employees won’t accrue any additional pension benefits—and Transport Workers Union President Jim Little  told In These Times he doesn’t expect the pensions will ever be unfrozen.

 
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