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Unions Mobilize to Press for Worker Focus in Virus-Relief Bill

March 20, 2020, 8:08 PM

Labor leaders said Senate Republicans’ $1.3 trillion stimulus package to aid businesses reeling from the coronavirus pandemic would face heavy opposition from unions because there’s no guarantee money would flow to workers.

AFL-CIO President Richard Trumka, head of the country’s largest federation of labor unions, called the proposal “an utter disgrace.”

“It gives free money to corporations, ignores the health crisis and does nothing to keep people working or help the unemployed,” Trumka said on Twitter Thursday evening, before congressional negotiators began hashing out the Senate majority’s proposal on Friday. “The labor movement will oppose this Main St bailout of Wall St with everything we have.”

Other labor leaders have become increasingly vocal over the past week in making the point that any additional economic stimulus for American businesses must include provisions forbidding layoffs, requiring an uninterrupted flow of paychecks, and a prohibition on using government funds for stock buybacks. Senate Republicans’ proposal does none of those things.

Labor’s determined stance, coupled with Democratic pushback on the proposal’s paid and family leave provisions, suggests negotiators could face a tough road to reaching a quick compromise.

President Donald Trump on Friday also expressed support for limiting the amount of government aid being used for stock buybacks. “I want that money to be used for the workers,” the president said during a press conference.

The worsening economic repercussions of the pandemic are taking an ever greater toll on businesses and workers alike, with airlines cutting service, restaurants shuttering amid local “shelter in place” orders, and an increasing number of employees facing layoffs. The U.S. Department of Labor reported Thursday that unemployment claims rose by about 70,000 since last week.

The Senate Republican plan offers up to $208 billion in loans or guaranteed loans to businesses, including up to $50 billion for passenger airlines and up to $8 billion for cargo air carriers. A draft released Thursday also would place restrictions on compensation for some executives, limiting it to 2019 levels for two years and limiting any executive severance pay.

Union leaders in the aviation, hospitality, and food service industry are among those speaking out against using taxpayer dollars to cushion the economic blow for shareholders rather than workers.

“No layoffs, no wage cuts, no benefit cuts, no busting of union contracts, no stock buybacks, no bonuses,” Trumka said during a Facebook Live update Thursday. “No way, no how, no more. These are the conditions that we’re insisting on.”

Senate Majority Leader Mitch McConnell (R- Ky.) said in remarks on the Senate floor today that in-depth bipartisan talks are underway to tweak the bill and advance it to the House of Representatives by Monday. He added that the package provides targeted loans, not bailouts to troubled industries.

Sen. Elizabeth Warren (D-Mass.) released an eight-point plan that calls for conditions on any bailout, including an oversight body with subpoena power to enforce the terms.

“We’re not doing no-strings-attached bailouts that enrich shareholders or pay CEO bonuses,” the senator tweeted March 17.

Jonathan Hurtarte/Bloomberg Law

Hospitality Worker Concerns

The economic pain has been especially pronounced in the hospitality industry, and union membership in the sector has taken a commensurate hit.

UNITE HERE, which normally represents more than 300,000 hospitality workers in the U.S. and Canada, has experienced a roughly 90% decline in its membership due to the outbreak, according to union President D. Taylor. Hotel and casino workers are being laid off or put on zero-hour work schedules as travel demand dries up, he said, and those workers need help from lawmakers on Capitol Hill.

The union’s Chicago-based Local 1 saw its membership drop from 16,000 workers to about 3,000 to 4,000 workers in a matter of weeks, Local 1 President Karen Kent said.

The hotel and casino industry will be advocating for worker sick leave, faster processing of unemployment benefits, and expanded health care, Taylor said on a call with reporters Wednesday.

New SEIU Campaign

The Service Employees International Union, which has more than 2 million members including food service and hospital workers, is calling for a cross-industry bailout of workers.

This week the union launched a “Protect All Workers” campaign that featured a full-page advertisement in Thursday’s Wall Street Journal laying out conditions for industry and government action. It also debuted a new website calling for “immediate, sweeping action” to be taken across industries.

“Uniting together in our unions, we have a powerful voice to ensure our families and communities are protected,” SEIU President Mary Kay Henry said. “We vow to make our voices heard loud and clear so that our nation’s response to this crisis builds a stronger, more resilient American future.”

The union is asking that Capitol Hill and the White House prioritize health care and financial support for working families over over executive pay and profits for shareholders.

No Bonuses for Execs

Up to 90% of aviation workers could soon be out of work as a result of coronavirus-related service cuts, according to Association of Flight Attendants-CWA President Sara Nelson. Airline unions say they strongly support what they call an “investment” in the airline industry, but that the package now being negotiated on Capitol Hill shouldn’t allow bonuses for executives.

Any sacrifices—and rewards, when the airline industry becomes profitable again—should be shared equally, said Lori Bassani, president of the Association of Professional Flight Attendants, which represents about 28,000 flight attendants at American Airlines.

Airline executives after the 9/11 terrorist attacks were able to earn bonuses once air travel picked up again, but airline unions had agreed to concessions during post-9/11 bargaining that they weren’t able to take back, Bassani said.

There must be “strict rules” for any stimulus funds from Congress, including restrictions on CEO bonuses and a ban on the use of federal funds for airlines that block union organizing efforts or break union contracts by declaring bankruptcy, Nelson said in a video update.

Delta Air Lines criticized her comments, saying she suggested that the Atlanta-based carrier should be excluded from potential aid. The AFA is seeking to organize flight attendants at the airline.

U.S. airlines and unions representing a broad range of airline employees sent a joint letter to Congress Thursday in favor of the proposal to pump new cash into the economy.

The package should ensure that all airline employees “can provide for themselves and their families,” said Dennis Tajer, a spokesman for the Allied Pilots Association who’s also a pilot at American. The APA represents about 15,000 pilots at American. The package shouldn’t allow for bonuses for airline executives, Tajer said, adding that there appears to be wide agreement among airline stakeholders on this issue.

“Any federal aid must keep employees on payroll, protect labor rights and come with statutory guarantees that the money will go to the frontline workforce,” a separate letter from aviation unions, also sent to members of Congress on Thursday, said.

American is taking care of its employees and has reached deals with several employee groups that will allow them to take voluntary unpaid leaves of absence and—for those eligible—early retirement, said Joshua Freed, a spokesman for the airline. The airline and the APA said earlier this week that they had reached an agreement to protect pilots during the novel coronavirus crisis that includes unpaid leave, leaves of absence, and early retirement options.

To contact the reporters on this story: Andrew Wallender in Washington at awallender@bloomberglaw.com; Louis C. LaBrecque in Washington at llabrecque@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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