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Tuesday, December 16, 2008

The Republic Sit-Down Strike: A Response to Richard Ensberg

Sure, I could have left this in the comments to Richard’s post, but since I’m a guest-blogger too, I’ll make a separate post. Plus, I’ve always wanted to be a part of some "A Response To . . ." debate.

Richard writes:

Neither BOA nor any other bank can survive by making, not merely a poor - but an insane "loan" in response to political pressure. In a free economy, businesses fail and various stakeholders - shareholders, employees and creditors - will be hurt by it. We can't expect banks - even those who have had an influx of federal capital - to insure against it.

The Republic employees acted boldly and certainly benefited from being from the President-elect's hometown. Maybe (although I would oppose it) the government should guarantee obligations under the plant closing laws. But shifting the costs to a firm's lender based upon who can and cannot exert the requisite political pressure seems irrational and even dangerous.

One response to his post questioned whether the loan was indeed "insane," given that this seems to be in part a "run-away shop" issue.

More broadly, though, I don’t think this should be seen primarily as a "make a bank lend money" protest. The workers were protesting that the employer did not pay benefits the workers felt they were owed under the WARN Act and under their union contract. When the employer argued it couldn’t pay these benefits because it didn’t get a loan, the workers then focused on the bank. That was smart, practically and politically. But the protest was first and foremost about rights the workers had or reasonably believed they should have under an employment law and their contract with their employer.

Now, perhaps under the law as currently written, the employer’s financial plight would have allowed it to avoid these obligations. WARN is famously riddled with exceptions and is problematically toothless. Also, as debates over the auto industry’s fate remind us, bankruptcy courts can be part of a process in which labor contracts are rewritten. So, perhaps the legal claims by the workers would have failed. And of course even if the workers had good legal claims, it’s not legal to occupy the employer’s property.

Still, many of us remember with some sympathy a history of workers asserting their conceptions of rights against employers – rights that the law did not at the time recognize, but later did. As I cautioned in my initial post, I wouldn’t over-read this incident as being the harbinger of a new New Deal’s worth of labor militancy. But if workers want to press the point, by peaceful, disciplined protest, that they deserve a better deal when companies go under (or are claiming to go under), I’m for it. And if they succeed in their protest, yeah, I’ll celebrate it.

Posted by JosephSlater on December 16, 2008 at 03:09 PM in Workplace Law | Permalink

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