Number one blog for finding anything that has to do with the law. Read up on the law and know your rights. Labor Laws, Wage Laws, Contract Laws, and anything else that has to deal with justice and rights.
Monday, September 9, 2013
Reworking Labor: A.F.L.-C.I.O. Has Plan to Add Millions of Nonunion Members
Thursday, August 8, 2013
In Germany, Union Culture Clashes With Amazon’s Labor Practices
Monday, November 19, 2012
Ikea Admits Use of Forced Labor in the 1980s
Nicholas Kulish reported from Berlin, and Julia Werdigier from London. Chris Cottrell contributed reporting from Berlin.
Sunday, November 18, 2012
DealBook: As Labor Talks Collapse, Hostess Turns Out Lights
What might be the last Twinkie in America — at least for a while — rolled off a factory line Friday morning. It was just like the millions that had come before it, golden, cream-filled empty calories, a monument to classic American junk food.
But it is likely to be the last under the current management. After not one but two bankruptcies, Hostess Brands, the beleaguered purveyor of Twinkies, Ho Hos, Sno Balls and Wonder bread, announced plans to wind down operations and sell off its brands.
Since filing for Chapter 11 bankruptcy protection in January, Hostess has been trying to renegotiate its labor contracts in a bid to cut costs. But the talks fell apart, and last week one union went on strike.
The so-called liquidation will probably spell the end of Hostess, an 82-year-old company that has endured wars, countless diet fads and even an earlier Chapter 11 filing. Although the company could theoretically negotiate a last-minute deal with the union, Hostess is moving to shut factories and lay off a large majority of its 18,500 employees.
But Twinkies and the other well-known brands could eventually find new life under a different owner. As part of the process, Hostess is looking to auction off its assets, and suitors could find value in the portfolio.
“The potential loss of iconic brands is difficult,” said the company’s chief executive, Gregory F. Rayburn. “But it’s overshadowed by the 18,500 families that are out of work.”
The company’s current problems stem, in part, from the legacy of its past.
An amalgam of brands and businesses, the company has evolved over the years through acquisitions. In the 1960s and 1970s, the company, then called Interstate, bought more than a dozen regional bakeries scattered across the country. A couple of decades later, it paid $330 million for the Continental Baking Company, picking up a portfolio of brands like Wonder and Hostess.
As the national appetite for junk food waned, the company fell on hard times, struggling against rising labor and commodity costs. In 2004, it filed for bankruptcy for the first time.
Five years later, the company emerged from Chapter 11 as Hostess Brands, so named after its most prominent division. With America’s new health-conscious attitude, it sought to reshape the business to changing times, introducing new products like 100-calorie Twinkie Bites.
But the new private equity backers loaded the company with debt, making it difficult to invest in new equipment. Earlier this year, Hostess had more than $860 million of debt.
The labor costs, too, proved insurmountable, a situation that has been complicated by years of deal-making. The bulk of the work force belongs to 12 unions, including the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.
The combination of debt and labor costs has hurt profits. The company posted revenue of $2.5 billion in the fiscal year 2011, the last available data. But it reported a net loss of $341 million.
With profits eroding, the company filed for Chapter 11 in January. It originally hoped to reorganize its finances, seeking lower labor costs, including an immediate 8 percent pay cut.
The negotiations have been contentious.
The Teamsters, which has 6,700 members at Hostess, said it played an instrumental role in ousting Hostess’s previous chief executive, Brian J. Driscoll, this year after the board tripled his compensation to $2.55 million. The union also hired a financial consultant, Harry J. Wilson, who had worked on the General Motors restructuring.
While highly critical of management missteps, the Teamsters agreed in September to major concessions, including cuts in wages and company contributions to health care. As part of the deal, the union was to receive a 25 percent share of the company’s stock and a $100 million claim in bankruptcy.
“The objective was to preserve jobs,” said Ken Hall, the Teamsters’ general secretary-treasurer. “When you have a company that’s in the financial situation that Hostess is, it’s just not possible to maintain everything you have.”
But Hostess reached an impasse with the bakery union. Frank Hurt, the union’s president, seemed to lose patience with Hostess’s management, upset that it was in bankruptcy for the second time despite $100 million in labor concessions. He saw little promise that management would turn things around.
“Our members decided they were not going to take any more abuse from a company they have given so much to for so many years,” said Mr. Hurt. “They decided that they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and ‘restructuring specialists’ walk away with untold millions of dollars.”
About a month ago, Mr. Rayburn said, the bakers union stopped returning the company’s phone calls altogether. For its part, the bakery union said the company had taken an overly aggressive approach. David Durkee, the union’s secretary-treasurer, said Hostess had given an ultimatum. “They said, ‘If you do not ratify this, we are going to liquidate based on your vote.’ ”
With the company standing firm, the bakery union struck last week, affecting nearly two-thirds of the company’s factories across the country. The Teamsters drivers honored the picket line, further shutting down the operations. The company gave union members until 5 p.m. on Thursday to return to work.
Mr. Rayburn said the financial strain of the strike was too much for the company, which had already reached the limits of its bankruptcy financing. Over the last week, Hostess lost tens of millions of dollars as many customers’ orders went unfilled. And its lenders would not open their wallets one more time.
By Thursday morning, Hostess’s executives were ensconced in the company’s headquarters in Irving, Tex., still hoping that enough employees would return to work to resume production. A small number of workers had already crossed the picket lines that had sprung up at most of the baker’s factories, but more than 10 plants remained well below their necessary capacity.
Mr. Rayburn’s deadline of 5 p.m. passed without either side backing down. Soon after, executives asked the company’s legal advisers to finish the court motions that would begin the liquidation. Papers had been drawn up well before that afternoon.
Around 7 p.m., Mr. Rayburn had his final discussions with the company’s board and his senior managers and made the call to begin winding down.
“We were trying to focus on where people were having success, but I had to make a call,” Mr. Rayburn said.
Monday, November 5, 2012
NFL Tries to Frame Concussion Litigation As Labor Dispute
Sunday, October 28, 2012
In Midwest, Labor Presses for a Vote to Lock In Union Rights
Sunday, October 7, 2012
Economix: How Bureau of Labor Statistics Tames Volatile Raw Data for Jobs Reports
7:32 p.m. | Updated
Dollars to doughnuts.The unemployment rate fell to 7.8 percent in September, its lowest level since President Obama took office. With just a month to go before the election, the news seemed too good to be true, at least for some Mitt Romney supporters.
Almost immediately some conservative pundits began accusing the Labor Department, which released the jobs numbers on Friday, of cooking the books. After all, the household survey — the survey that the unemployment rate comes from — showed that the number of people with jobs rose 873,000 in September, though the gain had averaged 164,000 each month earlier this year.
These numbers are always tremendously volatile, but the reasons are statistical, not political. The numbers come from a tiny survey with a margin of error of 400,000. Every month there are wild swings, and no one takes them at face value. The swings usually attract less attention, though, because the political stakes are usually lower.
Look how noisy these numbers are, and always have been!The numbers, by the way, are especially imprecise (and prone to revision) when the economy is making a turn, or when regular seasonal patterns start to change. And there is reason to believe that one particular seasonal pattern — the start of the college school year — may be partly responsible for the big swing in September.
One of the biggest sources of volatility in the last couple of months (and one of the major contributors to the big bump in job-getters in September) was the group of workers between 20 and 24 years old.
Historically, the employment levels for that group have dropped sharply in September, probably because many people in their early 20s are leaving summer jobs and going back to school.
For each year since 1948, the average level of employment for this group has fallen by 398,000 from August to September. In fact, before this year, employment for this age group had risen just two times in that period: 1954 (a gain of 5,000), and 1961 (a gain of 22,000).
This year was the third time on record that the number of people in this age group gained jobs in September, and the gain was big: 101,000.
Source: Bureau of Labor Statistics. Numbers are not adjusted for seasonality.How to explain this major deviation from the historical trend, other than conspiracy theories?
If you look back at August, an unusually high share of this age group stopped working, compared with past employment patterns in August. From 1948 to 2011, the number of those 20 to 24 who had jobs fell by an average of 98,000 from July to August. This past August, it fell by 530,000, the biggest loss on record.
Over the last couple of decades, in fact, the job losses for this age group have been growing each August, suggesting that over time young people have been leaving their summer jobs earlier and earlier.
Source: Bureau of Labor Statistics. Numbers are not adjusted for seasonality.In other words, seasonal patterns might be evolving — people starting school and leaving their summer jobs earlier in the summer — which has big implications for how the Labor Department digests and reports the monthly employment data.
The Bureau of Labor Statistics adjusts its raw survey data to correct for seasonal patterns, and since a decline in employment is expected for those 20 to 24, the economists at the bureau increased the level of employment for this group in the seasonally adjusted numbers.
Changes in seasonal patterns like this one can introduce more error into the headline numbers, and can at least partly explain why the overall change in household employment looked so much bigger in September than seems plausible. After seasonal adjustment, the increase in employment among those 20 to 24 was given as 368,000. That’s about 42 percent of the overall increase in employment growth for people of all ages. (After making seasonal adjustments on the August figures, the employment level for 20- to 24-year-olds was reported as declining by 250,000.)
All of which is to say the bureau aims to release the most informative numbers it can. But it is seeking to measure the state of the American job market quickly, based on surveys that are inherently incomplete — and the adjustments that are meant to fill in the gaps have their own shortcomings, particularly when seasonal trends change.
In case you still believe that the models the bureau uses are being manipulated to put President Obama in a better light, note that there are no political appointees currently serving in the Bureau of Labor Statistics. The employees are all career civil servants who have worked under both Republican and Democratic administrations. (The commissioner of the bureau is supposed to be a political appointee, but that position is vacant. The acting commissioner, John M. Galvin, has held the position since January, and he is a career civil servant.)
Economists at the Bureau of Labor Statistics regularly adjust the models they use to account for factors like seasonality and the number of new companies entering the economy, and the revisions are often very large.
Economists outside the bureau have been weighing in, too, both on how the latest numbers should be adjusted and what the next few months of jobs reports should look like. A paper presented last month as part of the Brookings Papers on Economic Activity series, for example, incorporated data on people flowing into and out of unemployment to forecast that the unemployment rate would most likely stagnate for a few months to come.