Bankruptcy Code Preempts State Law Invalidating KERPs, Delaware Judge Says
A waiver in a KERP is enforceable even if it violates state labor law, Judge Carey rules.
Judge Name - Do not use it.
Kevin J. Carey
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Banks Pay Out Some of the Biggest Settlements in Wage Disputes
A new report released today said that banks and insurance companies paid out some of the largest settlements in the past decade in lawsuits alleging inadequate worker compensation, the Wall Street Journal reported. Financial-service companies occupy half the spots on a list of the 12 employers that paid the most in legal disputes over pay for workers since 2000, said Good Jobs First, an organization that tracks legal violations at large companies. Lawsuits accusing companies of wage discrepancies are often filed by workers who say managers expected them to do job tasks after they clocked out, or failed to pay employees on the occasions they worked during rest and meal breaks. Workers also file cases alleging they worked extra hours but were shortchanged overtime pay or were misclassified as exempt from overtime. Walmart Stores Inc. topped the list, with $1.12 billion in settlements and fines, in part because of a $352 million settlement in 2008. That payment consolidated more than 60 separate lawsuits alleging various violations, such as failing to pay for required rest and meal breaks. Bank of America spent $73 million to settle claims in 2013 from some retail-branch and call-center employees who alleged that the bank didn’t pay people for overtime and other work performed off the clock. JPMorgan Chase & Co. paid $42 million in 2011 to settle an overtime case brought by underwriters and credit analysts. Earlier this year, Wells Fargo & Co. agreed to pay $27.5 million to thousands of its California tellers and service managers who said they weren’t paid for overtime hours and for working during meal breaks.
Pension Deal Removes Potential $180 Million Hurdle in Tops Bankruptcy
Tops Markets has settled a major pension dispute that could have cost the company more than $180 million, making its path out of bankruptcy clearer, the Buffalo (N.Y.) News reported. The settlement, reached earlier this month following two days of meetings with a mediator, could end a fight that has dragged on for more than four years. The dispute has cast a cloud over Tops' finances, as well as the retirement funds of more than 600 workers at a grocery warehouse in Lancaster that the supermarket company acquired in December 2013. While the details are still being finalized and the deal must be approved by a bankruptcy judge, the settlement would resolve one of the biggest financial hurdles that Tops faces as it tries to restructure its business and emerge from bankruptcy. For Tops, the deal frees it from an expense that could have cost it more than $100 million. The agreement means Tops no longer would be liable to pay as much as $183 million over 20 years to meet funding obligations to the Teamsters pension fund.
Jevic Chapter 11 to Convert to Chapter 7 After Denial Of Settlement
The long-running bankruptcy case of trucking firm Jevic Holding Corp. will convert to a chapter 7 liquidation after a Delaware judge denied approval Monday of the latest proposed settlement floated by the company and its creditors to dismiss the case, Law360 reported. During a teleconference in Wilmington, U.S. Bankruptcy Judge Brendan L. Shannon said all parties agree that there is no hope of ever confirming a chapter 11 plan and that opposition remained to the debtor’s and committee’s joint motion for a structured dismissal of the case. Read more. (Subscription required.)
Further analysis of Jevic’s conversion will be provided in tomorrow’s edition of Rochelle's Daily Wire.
California Governor Says Cities on Their Own as Pension Tab Rises
As California’s cities flounder under the rising cost of public pensions, they shouldn’t expect the state to extend a hand. While Governor Jerry Brown noted in his revised budget on Friday that local governments face "even greater pressures" than the state in dealing with the expense, he said it’s not up to the state to help, Bloomberg News reported. "A lot of cities signed up for pensions they can’t afford," the term-limited governor said during a budget briefing in Sacramento. "I don’t think the state is in a position, as far as I can see, to step in the shoes of mayors and supervisors. They’re going to have to handle that themselves." Brown’s position underscores the challenges facing local governments, whose resources are more limited than that of states in addressing the rising costs of keeping promises to police officers, teachers and other civil servants. In the Golden State, some cities are seeing their payments to the California Public Employees’ Retirement System rise by double digits in just a few years. Investment losses, contributions failing to keep pace with the cost of benefits, and changes in assumptions such as mortality rates have left many public pensions across the country with less than they need to cover obligations.
Employee Unrest Boils over Proceeds from Toys ‘R’ Us Liquidation
A group of Toys ‘R’ Us workers wants proceeds from the retailer's liquidation -- as well as the accumulated income that the chain’s private-equity owners have reaped over the years -- to make a severance payment to those laid off, Bloomberg News reported. A petition calls for Bain Capital, KKR & Co. and Vornado Realty Trust to hand over to employees the $470 million that the firms had received in interest and fees from Toys ‘R’ Us. The retailer’s 30,000 employees would get more than $15,000 each under that plan, which has 50,000 signatures. The workers are also lobbying members of Congress to ask for a tax on private-equity and hedge-fund profits, and new regulation on leveraged buyouts and stock-buyback transactions.
