The International Brotherhood of Teamsters has had a busy time of late. In the aftermath of the $10.3 billion purchase of industrial gas giant Airgas by French competitor Air Liquide (a deal announced last November), Teamsters-backed Airgas employees are taking a running dispute over workers’ rights to unionize straight to the new parent company. On February 24, union representatives staged a protest at the entrance to the French Embassy on Reservoir Road, even publishing a French translation of their press release about the embassy action. According to the Teamsters, Airgas has locked workers out of contract negotiations, threatened wage and benefit cuts, and threatened union activists. Living up to its “international” stature, Teamsters President James Hoffa addressed a letter to the union representing Air Liquide employees in France.
The Treasury has until May 7 to decide on Central States’ proposed pension cuts. Approving them, however, could set up a vaudevillian scenario for everyone involved—what Teamsters president Hoffa calls the “false illusion of participatory democracy.” If the application is approved, 407,000 stakeholders will need to vote on it. The catch? The outcome will already be decided, because Treasury has an obligation under the MPRA to impose approved cuts anyway. This is because Central States is classified as “systematically important,” meaning it would cost the federal Pension Benefit Guaranty Corporation (PBGC) over $1 billion to assist in the event of plan failure. Looking beyond Central States, however, the whole affair has exposed the underlying weakness of multiemployer plans in the wake of financial crises, company bankruptcies, and irresponsible management—putting workers’ retirements at risk through no fault of their own. One potential solution has already been introduced to Congress: the Keep Our Pensions Promises Act (KOPPA) of 2015 would solve the issue of “orphaned” retirees by spinning them off from larger multiemployer plans and having the PBGC cover promised pensions (using Treasury funds obtained by closing tax loopholes). Sponsored by Sen. Bernie SandersBernie SandersDemocrats offer double-talk on Veterans Affairs Dean drops out of DNC chairmanship race Sanders vs. Trump: The battle of the bully pulpit MORE (I-Vt.) and Rep. Marcy Kaptur (D-Ohio), KOPPA already has seven Senate and 41 House co-sponsors. Without some kind of federal guarantee, retired seniors under multiemployer plans will remain at the mercy of the market.
Sadly for those seniors, even if KOPPA has made it to the Senate Finance Committee, it will likely make it no further if Republicans on the committee (and Orrin Hatch in particular) are unwilling to give the plan a fair hearing. While alluding to the deep flaws inherent in the MPRA in his remarks, Hatch attempted to draw a causal link in which a failure to enact the MPRA would have resulted in even deeper cuts to employee pensions as funds lost the ability to pay more than the PBGC could (or pay at all). In response to the idea of federally guaranteed pensions, however, the Finance Committee chair dismissed it out of hand as a “taxpayer bailout.” That sound bite, of course, ignores the fact that the 300,000 retirees whose pensions are at stake are themselves taxpayers.
For Hoffa and the Teamsters, meanwhile, the ongoing battle over Central States is a stark reminder of just how much the once-notorious union has changed over the course of the past few decades. The same Teamsters-backed pension fund now trying to cut benefits once bankrolled the construction of mob-run hotels and casinos in Las Vegas in the 1950s and 60s, primarily through a funding scheme Hoffa’s father Jimmy brought into existence. While the younger Hoffa still faces demands for change from within the union, grassroots actions like the Airgas protest are a far cry from the Teamsters’ tainted past.
Armstead is a Chicago-based legal adviser specializing in labor issues.