In an effort to make sure that workers are protected when their employers declare bankruptcy, U.S. Sen. Al Franken (D-Minn.) today introduced legislation to ensure that employees and retirees receive their fair share of earnings and retirement savings when their employer goes into bankruptcy.
"When a company enters bankruptcy, it's just plain wrong that employees are left to fight for what they are duly owed while executives get to walk off with huge bonuses." said Sen. Franken. "We've seen workers lose out too many times when a company reorganizes, especially on the Iron Range. Preserving jobs, pensions, and retiree health care benefits must be a priority-especially in this challenging economic climate-which is why I will fight to get this bill passed."
The Protecting Employees and Retirees in Business Bankruptcies Act will make changes to Chapter 11 bankruptcy law to do the following, among other things:
Improve Employees' and Retirees' Ability to Recover Benefits by doubling the maximum wage claim for each worker to $20,000 and allowing a second claim of up to $20,000 for contributions to employee benefit plans;
Reduce Employees' and Retirees' Losses by restricting the situations in which collective bargaining agreements can be rejected or amended;
Restrict Executive Compensation Programs by requiring disclosure and court approval of executive compensation for firms in bankruptcy and restricting bonuses for other top officials.
The Protecting Employees and Retirees in Business Bankruptcies Act was introduced by Sen. Dick Durbin (D-Ill.) and was cosponsored by Sen. Franken and Sens. Tom Harkin (D-Iowa) and Jack Reed (D-R.I.). A companion bill was introduced in the House of Representatives by Rep. John Conyers (D-Mich.).