Illinois Governor Supports Workers Occupying Closed Chicago Factory
Tuesday, December 9, 2008
CHICAGO, Dec. 8 -- Workers occupying a Chicago factory that closed abruptly last week gained a significant political ally Monday in their fight to receive back benefits, when Illinois Gov. Rod Blagojevich (D) ordered state agencies to stop doing business with Bank of America until it uses some of its federal bailout money to keep the factory open.
The standoff at Republic Windows & Doors, which began Friday, has been a throwback to tactics hardly seen since the 1930s that labor experts and union leaders say may become more common if the economy continues its downturn.
More than 200 unionized employees say they will not allow Republic or its creditor, Bank of America, to remove equipment from the factory until they get severance and vacation pay they are owed. Their union alleges that Republic violated federal law by giving its workers only three days' notice before shutting down. Workers were told the company was closing because Bank of America did not extend it enough credit to keep operating.
The sit-in has garnered support from a number of Illinois Democrats, including President-elect Barack Obama. "I think they're absolutely right," Obama said Sunday, adding: "What's happening to them is reflective of what's happening across this economy. . . . These workers, if they have earned these benefits and their pay, then these companies need to follow through on those commitments."
Blagojevich said the state will withhold business worth "hundreds of millions" of dollars from Bank of America unless it steps in to help the workers. "We hope that this kind of leverage and pressure will encourage Bank of America to do the right thing for this business," the governor said outside the plant.
Bank of America said in a statement, "We agree with the statements of public officials that Republic Windows and Doors should do all it can to honor its obligations to its employees," but added that the bank has "provided the maximum amount of funding we can."
Meanwhile, the Illinois Attorney General's Office is investigating Republic Windows' labor practices as well as possible contract violations with customers in regards to the sudden closure. Officials with Republic did not return phone calls seeking comment.
Employees were told Dec. 2, during a gathering in the cafeteria, that the company would close in three days. By Friday, their health benefits were terminated.
At a meeting facilitated by leadership of the United Electrical, Radio and Machine Workers of America Local 1110, employees voted to remain in the plant until bank and company officers agreed to either keep the business open or pay them 60 days' severance wages and accrued vacation time.
"You don't like to hear news like this at this time of year," said worker Apolinar Cabrera, 44, a father of two who has a baby due soon. "Can you imagine paying your mortgage, your bills, food and a new baby coming? What are you going to do? We'll stay here as long as it takes -- we have no choice."
The Worker Adjustment and Retraining Notification Act of 1988 mandates that companies give workers or their union 60 days' notice of a closing or of mass layoffs. Exceptions include natural disasters, unforeseeable business circumstances, or situations in which the company is seeking new capital or business that would be endangered by such notice.
Emily Rosenberg, director of the Labor Education Center at DePaul University's School for New Learning, said the Republic situation probably does not fall into one of those exceptions.
"It's not my impression that banks give you two days' notice," she said. Company officials "probably knew they were going under and, instead of looking at the employees as creditors like they should have, they said to hell with them and thought nobody was going to do anything about it," she said.
Company officials allowed union members to remain in the plant if they promised to keep the equipment safe and clean. Since then, 30 to 40 workers at a time have remained inside, while supporters from other unions and the public have milled around the factory's lobby and sidewalk.
New York lawyer Hanan Kolko, who represents various unions, said that because Republic did not file for bankruptcy before it closed, the workers' claims will be considered preexisting debts, with low priority in any bankruptcy proceedings.
"If Bank of America acts like a typical secured creditor, when someone says, 'Gee, these workers should get their WARN Act money,' Bank of America will say, 'Hell no, they shouldn't get a nickel, because that will diminish what we get,' " he said. "If the effect of the bailout is that banks do okay and these people who were making $28,000 a year are denied their WARN Act money and then disappear into the miasma, then something is not right."