Today's News and Commentary – October 15

Published October 15th, 2013 -  - 10.15.13


As the United States Government moves closer to the Thursday deadline to avert a default on its debts, the New York Times reports that Senate leaders have nearly reached a deal to avert the crisis. The Hill reports that one part of the tentative deal involves a delay in the Affordable Care Act’s reinsurance tax. The tax would raise costs for all group insurance plans, including those provided by unions.  The AFL-CIO criticized the tax in a resolution passed at its convention last month.

Running up against another deadline,  the Los Angeles Times reports that Bay Area Rapid Transit (BART) and its two major unions,  the Service Employees International Union Local 1021 and Amalgamated Transit Union Local 1555, agreed to extend talks on a new contract amid talks with a federal mediator – meaning that trains will run on time today in the Bay Area.

We have covered major legal challenges to unions’ abilities to organize and collect dues, and one more appears imminent. In the L.A. Times, Steve Forbes applauds Gov. Scott Walker’s efforts to combat public sector unions and highlights a lawsuit brought by the Center for Individual Rights that claims that agency shop laws violate the 1st Amendment by forcing teachers to pay annual union fees to cover the costs of collective bargaining even when they are not members and disagree strongly with the union’s negotiating positions.

The Wall Street Journal reports on another governor making news on the labor front, noting that Tennessee Gov. Bill Haslam expressed concern yesterday that auto-related investments in the state could be chilled if the United Auto Workers union is successful in organizing workers at Volkswagen’s Chattanooga assembly plant. Haslam said, “I am not anti-union,” but argued “[o]ur job is to be upfront to what the downside is.”

Bloomberg Businessweek reports that the United Mine Workers of America and Peabody Energy Corp. and Patriot Coal Corp. have reached a $400 million agreement “that settles a bitter dispute over health care funding for retirees in the wake of Patriot’s bankruptcy.” Patriot and Peabody, its former corporate parent, will fund a health care trust for four years beginning in 2014 to pay for health care benefits for thousands of retired miners. In return, the mine workers union agreed to give up “virtually all” of its 35 percent equity stake in the reorganized Patriot Coal — a key part of an earlier retiree health care funding agreement between the union and the company.

In Washington, D.C., the Washington City Paper reports that after Mayor Vince Gray’s recent veto of a bill that would have required retailers with corporate sales of $1 billion or more operating D.C. locations of at least 75,000 square feet to pay their employees no less than $12.50 an hour in wages and benefits, Walmart opened new hiring centers for their planned locations in the city and received more than 11,000 applications in their first week of operation.

In a bit of a contrast, the New York Times reports that the New York State attorney general’s office is investigating about a dozen employment agencies that may have cheated or exploited job seekers by taking fees in exchange for jobs that never materialized or paid below the minimum wage, refusing to give refunds, charging fees in excess of the permitted amount, or violating civil rights law by referring clients to jobs based on their nationality or gender. The agencies under examination are in northern Queens and serve mostly Spanish-speaking immigrants.

Finally, the Wall Street Journal reports that a union-affiliated trust fund set up to pay medical expenses for Chrysler Group LLC retirees said its ownership stake in the U.S. auto maker was worth $3.6 billion at the end of 2012, according to a recent federal filing. The current value of the trust’s 41.5% stake in Chrysler are at the heart of a continuing battle between the fund’s managers and Chrysler majority owner Fiat SpA over how much the stake is worth. Fiat, which owns 58.5% of Chrysler, is negotiating to buy the trust’s stake in a private deal, but the two sides haven’t been able to agree on a price.

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