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By MARA LEE firstname.lastname@example.org
The Hartford Courant
2:11 PM AKST, March 1, 2013
HealthBridge Management has asked a bankruptcy judge to approve what a federal judge barred — terminating the pension and increasing health premium costs for unionized workers at its five Connecticut nursing homes.
Those homes entered bankruptcy protection this week, and Friday, the New Jersey-based company argued to a bankruptcy judge in New Jersey that it needed to cut its costs because under the terms of the union contract, its five homes will lose $1.3 million each month. If it is required to keep honoring its union contracts, the company said, it will close the nursing homes in Newington, Milford, Danbury, Stamford and Westport.
The judge is expected to make a determination on Monday on whether the company needs interim relief from these costs.
The National Labor Relations Board argued to the bankruptcy judge that the company's claims that it would go out of business were already rejected by a federal judge and by the Second Circuit Court of Appeals, when it denied a temporary stay to Judge Robert Chatigny's court order.
The lawyers for the NLRB, who convinced Chatigny to require the company to rehire the strikers at their former wages and benefits, said this request "is essentially an end-run around the District Court's order... It appears to be an exercise in forum shopping to relitigate … claims already considered and decided by the District Court, the Second Circuit and the Supreme Court."
"Debtors should not be permitted a fifth bite at the apple in a new court," the NLRB lawyers wrote, and the application should be denied.
The NLRB lawyers argued the bankruptcy court doesn't have jurisdiction, because it's not a union contract that HealthBridge is seeking to modify, but rather a court order it's trying to evade.
The lawyers for Service Employees International Union wrote in a motion opposing the request that it's not even clear that the nursing homes are deeply indebted. The homes are part of a system of interconnected companies, and the nursing homes pay affiliates for management, drugs, rent and consulting.
But HealthBridge said those affiliates are taking cuts. HealthBridge lawyers wrote in a footnote that the management company has agreed to accept a substantially lower management fee, and that the landlords have been deferring rent payments at some of the homes.
They noted that the five nursing homes already required 432 non-union employees to take substantial benefit cuts. Their paid hours were cut from 40 to 37.5 hours a week, they lost five days between sick time and vacation time reductions. New hires lost night shift and weekend shift premiums. The generosity of the health insurance was reduced, and the workers had to pay more for it.
It wants the judge to approve similar changes for the union workers. For instance, it wants them to pay $250,000 a month towards the cost of their health care premiums, which is about $400 per person.
Ending the pension would save $137,000 a month, HealthBridge said. Changing overtime rules to start at more than 40 hours in a week rather than more than eight hours on a single day would save $310,000 a month.
"In this sense, the only 'holdout' to helping these facilities become sustainable has been the Union," HealthBridge's lawyers wrote.
SEIU noted HealthBridge's lawyers expressly said breaking its union contract was the main purpose for filing bankruptcy at these homes.
"The petition stands at odds with any good faith attempt to use the bankruptcy processes to distribute available assets equitably among a host of creditors," the union said. "The Debtors' conduct here is a transparent abuse of the Bankruptcy Code."
The NLRB said that Chatigny rejected HealthBridge's claim that retaining the pension and rich health benefits would be financially ruinous because the company itself declined to make that argument while negotiating with the union and trying to convince them to accept concessions.
If a company says it can't afford something during union negotiations, the union has the right to examine its books.
The NLRB says that if HealthBridge wants to reduce its labor costs, it needs to bargain with the union to do so, and suggested opening its books to the union to prove its financial distress would help its cause.