Betrayal Without Remedy: The Case Of The
Missing Wages
By Thomas Riggins
By Thomas Riggins
15 December, 2012
Countercurrents.org
Countercurrents.org
Monday's Wall Street Journal tell's
the story of how Hostess Brands, Inc., took its workers wages and used them to
cover its own expenses ("Hostess Maneuver Deprived Pension" WSJ 12-10-12).
Hostess Brands (famous for Twinkies and Wonder Bread) has gone
out of business after a lengthy bankruptcy process. During this process
information has come out about how corporations can break their contracts with
and steal from, their workers and yet escape prosecution for their actions. It
is an object lesson on how the laws are written to benefit private property and
capitalists at the expense of working people who are often denied equal
protection.
Here is what Hostess did. It signed contracts with workers in
which it was agreed that part of their wages would be diverted from their
paychecks and be invested in their pensions. This was a contribution made by the
workers independently of the contractual payments made to the pension funds by
the company.
In 2011, due to the company's financial problems, Hostess
announced that it would end payments to the pension funds. OK, that is one
problem for the unions to deal with. But what happened to the worker's wages
that Hostess was supposed to be putting into the funds? These wages were not
payments coming out of the pockets of Hostess per se.
Well, Hostess did not start to include these payments in the
worker's paychecks. Instead they just kept their wages for the company and used
them to pay for their own expenses. During an interview the new CEO, brought in
to oversee the liquidation of the company, said this was "terrible" but , "I
think it's like a lot of things in this case. It's not a good situation to
have." As to getting the money back-- C'est la vie.
The WSJ reports that "experts" say that since the money didn't
come "directly" from the workers [?] no federal laws were violated ("probably").
Huh! The company says they will put the wages I earned into X and they divert it
to Z and since I didn't have it listed as "deducted" from my paycheck it didn't
come "directly" from me therefore it is really theirs!
The WSJ quoted a lawyer not involved in the case who said, "It's
what lawyers call betrayal without remedy. It's sad, but that stuff does happen,
unfortunately." Why then would any union sign contracts with companies to
co-contribute to their pension funds and allow the companies to oversee the
payments if they can just keep them and the workers are "without remedy." Is
this gaping hole in federal law being addressed?
This betrayal only affected one of two major unions at Hostess:
the Bakery, Confectionery, Tobacco and Grain Millers International Union. The
Teamsters did not have this kind of arrangement with the company. The baker's
union did because "This local was very aggressive about saving for the future,"
according to a union officer. This is just another example of the truth of the
socialist adage that any future for workers under capitalism is problematic.
Update 1: The Kansas City Star reported on 12-10-12 that the
National Labor Relations Board has found "that Hostess had failed to bargain
collectively and in good faith with a union."
Update 2: Hostess Brands issued the following statement on
12-11-12: “At no time were these pension contributions paid as wages, so no
funds were ever ‘deducted from paychecks,’ as one news outlet erroneously
reported. Hostess Brands has at all times continued to pay its union employees'
current wages in full compliance with its collective bargaining
agreements.''
This statement from Hostess is a new low in the metaphysics of
mendacity: since the wages were not first paid then deducted but went directly
to the pension funds they were not wages. Caveat faber.
Thomas Riggins is the associate editor of Political Affairs and
also writes for People's World, both online.
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