Tuesday, May 12, 2009

PA company settles with workers on pensions after closing plant with large number of workers near retirement

Emily Sachar has an entry in her column “The Law” on p. 30 of the May 1, 2009 AARP Bulletin, “Shutting Down to Avoid Paying Pensions: The issue: Can a company shut down a plant in order to avoid paying workers their pensions?”

The company at issue is Freight Car America (FCA). About 75 workers sued the company for closing a plant in Johnston, PA , claiming that the plant had been singled out for closing because of the preponderance of older workers approaching retirement. Eventually, the workers collected pension rights that they would have earned had the plant remained open through October 2009.

The Chrysler bankruptcy and likely GM reorganization must be watched carefully to make sure that these kinds of closures do not happen or deprive workers of pensions that they would have collected.

Picture: Johnston PA flood site, May, 2007.

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