Following private sector trend, Republic Services/Allied Waste insists on 401(k) plans
At 9 p.m. Tuesday night, the country’s second-largest waste disposal company locked 79 workers out of their jobs. The day before, Republic Services/Allied Waste gave the Evansville, Ind., workers an ultimatum: accept management’s “last, best and final” offer, or be locked out of work. The union, Teamsters Local 215, blames the lockout on management’s insistence on permanently eliminating workers’ pensions.
“It’s a kind of extraordinary move in labor relations to lock workers out unilaterally,” says Louis Malizia, assistant director of the Teamsters Capital Strategies Department. “So there could be a return to work — the company need only open the gates and then let workers continue to work while they try to resolve issues at the bargaining table.”
Republic Services did not respond to a request for comment, but in an interview with an NBC affiliate, local general manager Mark McKune blamed the conflict on the union’s rhetoric: “When threats of war were made across the table at the company, the company felt it was necessary to take this step.” Republic has a contract with the city of Evansville to collect trash and recycling. McKune told the Evansville Courier & Press that with replacement workers filling in for locked-out Teamsters, customers were experiencing only “minimal service disruptions.”
Local 215 represents Republic’s Evansville drivers, mechanics and landfill staff. Republic and the Teamsters entered negotiations on a new contract in March. In April, a 25-day extension on their current contract expired, and Republic began training other employees to do the work of the Evansville Teamsters. Tuesday night, Republic exercised its legal right to lock out the workers — denying them any work until they reach a deal acceptable to management.
While strikes decline in the United States, statistics suggest that lockouts are on the rise. As I reported last week, Teamsters in New York City have been locked out by Sotheby’s auction house for nine months.
Clark University Industrial Relations Professor Gary Chaison says that when an employer “is willing to so spoil their relationship that he’s willing to lockout workers,” they “can gain an edge in bargaining.” Even the threat of a lockout, says Chaison, “is usually enough to get them to agree to far more in bargaining than they would” otherwise: “Unions will say, this is not the time and place for a fight, and they’ll settle for something less.”
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). In a Tuesday statement, Local 215 President Chuck Whobrey said, “It is outrageous that in the middle of negotiations Republic would start making threats to the jobs of 80 loyal workers. Our members provide a public health service to the city of Evansville, and they deserve to be able to retire with dignity. We are committed to the bargaining process, and these threats are uncalled for.”
The Teamsters and Republic have filed National Labor Relations Board charges against each other over alleged violations of federal labor law.
Whobrey told the Courier & Press that by locking out workers, Republic had “reneged” on an agreement to continue negotiations. Republic’s McKune told the paper that while Republic had never offered to move off of its final offer, “We told them they could call us or e-mail us at any time regarding our proposal. We haven’t heard anything.” Whobrey told the paper last week that workers would vote “sooner or later” on whether to accept management’s offer.
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.
Last Wednesday, locked-out workers told the Courier & Press that they’d been picketing a Republic facility since 4:30 a.m. that morning. Asked how long they would stay, one replied: “As long as it takes.”
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