%1

When the coal operator Blackjewel shuttered the gates of two mines in the Powder River Basin this summer, the insolvent company had already withheld wages and other benefits from its miners, a state office claims, the Casper (Wyo.) Star Tribune reported. Even as Eagle Butte and Belle Ayr coal mines have reopened under new ownership, a vast majority of former Blackjewel workers have yet to receive the full compensation they were promised, according to recent investigations by Wyoming’s Labor Standards Office. When it filed for bankruptcy, Blackjewel owed 506 workers hundreds of thousands of dollars in unpaid wages and benefits. But nearly six months later, only 33 workers have filed a claim for compensation with the state. The Wyoming Department of Workforce Services has finished investigating 31 of those claims and concluded Blackjewel failed to pay the 31 workers nearly $164,000 of owed wages and benefits. Blackjewel has provided the state with proof of paying workers just $56,800 of the amount owed. The company withheld payments from employees’ health savings and retirement accounts over the course of five pay periods prior to the bankruptcy, according to the investigations. And before filing for chapter 11, Blackjewel also withdrew employee retirement contributions from workers’ paychecks without transferring the funds to their retirement accounts.

A bankruptcy judge has authorized Celadon Group Inc. to start drawing from an $8.2 million chapter 11 loan that will pay employee wages and fund a planned windup of the trucking carrier, the Wall Street Journal reported. Celadon’s lawyers outlined the company’s path to closing its business at a hearing yesterday in the U.S. Bankruptcy Court in Wilmington, Del. The bankruptcy loan, funded by Celadon’s existing lenders, includes an end-of-January deadline for a court-approved sale of the company’s assets. The financing also is intended to give the Indianapolis-based company a runway to explore a going-concern sale of its Taylor Express Inc. business, which delivers goods principally for the tire industry and to retailers including Lowe’s Cos. Taylor Express is based in North Carolina and operates primarily in the southern and southeastern U.S. A lawyer for Celadon said advisers primarily are focused on completing a sale of Taylor Express at the outset of the chapter 11 process but that the company also will explore possible transactions for its other business.

A coal producer that purchased multiple Kentucky mines and hired workers from a now-bankrupt company has laid some of the miners off, the Associated Press reported. Kentucky State Rep. Angie Hatton said that miners told her Friday that Kopper Glo, the company that purchased mines from Blackjewel LLC, has idled its mines until at least Dec. 26. Many of the miners worked for Blackjewel, which over the summer laid workers off with little notice, issued them bad checks, filed for chapter 11 protection and had its Black Mountain/Lone Mountain division sold to Kopper Glo. Miners protested and demanded their missing pay, sitting on railroad tracks and blocking coal shipments for two months. In October, under a deal with Blackjewel in U.S. District Court, nearly $5.5 million in back pay was to be issued to the miners.

A rift over an executive's pay raise is risking an annual infusion of $18 million for the city's retirement system, an attorney for the oversight board of a city pension fund says, the Detroit News reported. Sean P. Gallagher, special counsel for the investment committee over Detroit's Police and Fire Retirement System, argued in a confidential memorandum that pension trustees' refusal to sign off on a pay boost for the system's deputy investment officer could amount to "potential defaults" in the terms of the so-called "grand bargain" funding commitment crafted in the city's bankruptcy to pump up its pension system. The retirement system's failure to adjust the pay rate of deputy investment officer Kevin Kenneally could amount to a lack of compliance with the "grand bargain," making it impossible for the investment committee or its chair to execute year-end certifications required for the annual funding, the memo notes. The funding comes from the nonprofit Foundation for Detroit's Future, which was created under the "grand bargain" to transfer funding from a dozen private foundations to shore up city pensions. The claim doesn't sit well with some pension board members, who argue the oversight board is using the threat as leverage after trustees deemed the investment committee's proposed 38 percent pay bump "grossly excessive" and declined to act on it.

A federal appeals court ruled private-equity firm Sun Capital Partners Inc. isn’t on the hook for a multimillion-dollar penalty for withdrawing from a bankrupt brass manufacturer’s pension fund, WSJ Pro Bankruptcy reported. The U.S. Court of Appeals for the First Circuit in Boston reversed lower court rulings — both district court and bankruptcy — in a recent decision saying Sun Capital Partners isn’t responsible for a $4.5 million penalty after it withdrew from a pension fund for a bankrupt portfolio company. Scott Brass Inc., a Rhode Island-based brass and copper manufacturing business owned by two Sun Capital funds, filed for bankruptcy in 2008 and withdrew from its multiemployer pension fund. The fund, the New England Teamsters and Trucking Industry Pension Fund, said Sun Capital was responsible for the $4.5 million penalty for withdrawing from the pension fund. Sun Capital sued the pension fund in U.S. District Court in 2010. A 2016 lower court decision sided with the pension fund, ruling Sun Capital was on the hook for the penalty. The buyout firm appealed. At issue was whether the two Sun Capital funds that jointly owned Scott Brass could be considered a “partnership-in-fact” and held jointly liable for the pension withdrawal penalty, said Sarah Borders, a partner at the law firm King & Spalding, who wasn’t involved with the case.

General Motors Co. has accused rival Fiat Chrysler Automobiles NV of bribing union officials to gain a labor-cost edge, but winning damages could be difficult, legal experts say, the Wall Street Journal reported. GM sued Fiat Chrysler last week, claiming the Italian-American car company purposely tried to hurt GM by paying off union officials to win more-favorable contracts with the United Auto Workers over the past decade. GM cited a long-running federal corruption investigation that has led to convictions of several union officials and guilty pleas from three Fiat Chrysler employees. Fiat Chrysler plans to fight GM’s lawsuit, which it said is without merit. The company, which last month agreed to a $50 billion merger with PSA Group of France, is in negotiations with the UAW on a new four-year contract. To win, GM will need to show that the alleged fraud that prosecutors say corrupted the collective-bargaining process between Fiat Chrysler and the UAW had a direct, negative impact on GM’s business, legal experts say. These types of racketeering lawsuits face long odds and often are settled or dismissed before they go to trial.

For decades, the International Longshore and Warehouse Union has solidified its power with aggressive demonstrations of solidarity across its Pacific ports. That includes a series of actions beginning in 2012, when dockworkers in Portland, Ore., introduced a slowdown, at least in part to protest two positions they believed should be going to the union’s members. The company operating the port went to court, contending that the job actions that continued for years were illegal and financially destructive. Seven years later, a federal jury has agreed, awarding the company a stunning $93.6 million judgment. At the ILWU, which has $8 million in assets at its national umbrella organization, the ruling this month threatens bankruptcy for a storied organization that grew from militant roots in the 1930s to lead unions on matters such as racial integration and ambitious regional organizing goals, the New York Times reported. Because of the size of the verdict, the federal judge in the case has yet to finalize the award, giving both sides time to submit arguments on whether the jury’s decision should stand. The case revolves around provisions under federal law related to secondary boycotts, which are prohibited in order to protect companies that do not have a stake in a labor dispute from getting dragged into the middle of it. The jobs that the ILWU wanted were being managed directly by the Port of Portland, and the company operating the port contended that the slowdowns over those positions improperly punished them for a dispute that should have been between the port and the ILWU.

WeWork is laying off 2,400 employees as it works to cut costs and right-size the business, CNBC.com reported. A WeWork spokesperson said that the cuts were being made as part of the company’s efforts to “create a more efficient organization” and refocus on the core office-sharing business. The job reductions represent 19 percent of WeWork’s total workforce, which amounted to 12,500 employees as of June 30, according to an SEC filing. Leading up to the announcement, reports of forthcoming job cuts had been circulating for weeks. The <em>New York Times</em> reported on Sunday that WeWork could cut at least 4,000 jobs across its core office-sharing business and some side ventures. In October, Marcelo Claure, WeWork’s new executive chairman, warned that layoffs would be on the way but didn’t say how many would be announced.

Senate Republicans unveiled a plan yesterday to stabilize the failing pensions of 1.3 million miners, truckers, and other workers and retirees, setting the stage for a battle with House Democrats, who approved their own version of a fix over the summer, the Wall Street Journal reported. The workers and retirees belong to what are known as multiemployer pension funds, which are governed by collective bargaining agreements between a group of employers and a union. The most troubled plans are an estimated $100 billion short of what they need to pay out promised benefits — and the government insurance plan that backstops them is expected to run out of money by 2025. The new proposal by Sens. Chuck Grassley and Lamar Alexander would pave the way for the Pension Benefit Guaranty Corp., the government’s pension insurer, to take over a portion of some troubled plans’ liabilities, according to documents shared by Sen. Grassley’s and Sen. Alexander’s offices. The plans eligible for takeover would include two plans serving truckers and mine workers that are on the verge of running out of money. Following the takeovers, retirees would continue to receive benefits, but they would be cut by 10 percent, the documents show. The bill passed by House Democrats differs in that it would offer direct aid to the troubled plans in the form of forgivable loans. The Congressional Budget Office pegged the total price tag for the package at $48.5 billion but said it was difficult to predict the cost because it wasn’t clear under what circumstances the loans could be forgiven.