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Judge backs deal for ex-Enron workers

By ERIC BERGER

NEW YORK -- A U.S. bankruptcy judge gave preliminary approval Monday to a deal that would pay former Enron Corp. workers an additional $28.8 million to end their severance claims against the company. The pact, a product of four months of negotiations between lawyers for the former employees, Enron and its creditors, will quiet some of Enron's most vocal and public critics: the 4,500 former workers and others who took up their cause, including the AFL-CIO and activist Jesse Jackson. "We're extremely pleased with the judge's preliminary approval," said Damon Silvers, the AFL-CIO's general counsel. "As a result of today's hearing, people will be receiving money in a matter of months." Lawyers could have been arguing the issue for months and ex-workers might not have received anything beyond the $5,600 they have already been paid until Enron's final reorganization is approved, which will take years. By then, there could be no money left. Enron will now mail information about the settlement to former employees by July 3. Upon returning the form, they will receive checks for $2,000, probably within about 10 days, lawyers said. After final approval of the plan at a hearing Aug. 12, employees will receive the balance of the severance they are due, up to $13,500. The settlement is not yet final because former workers may also opt not to participate in it. They may appear in court Aug. 8 to have Judge Arthur Gonzalez estimate the value of their claims. One former employee, Florence Zoes, has already indicated she wants to pursue her severance claims separately. Gonzalez urged her to review the severance settlement. With a hard-fought settlement in hand it will be difficult for employees opting out to press their claims in court, bankruptcy experts said. They may do so because their severance package under Enron's plan, based on salary and months of service, could run into hundreds of thousands of dollars, or because of violations of the Civil Rights Act. There may be other motivations as well, said Nancy Rapoport, dean of the University of Houston Law Center and a bankruptcy expert. "The only reason to stay in there now is if you're really angry," she said. "Anger can be a powerful motivator." If more than a handful of former workers opt out, and Gonzalez tells creditors he believes there is a strong likelihood their claims will exceed what they would otherwise be paid under the settlement, Enron and its creditors could back out of the deal. Few expect that to happen. Should former employees opt out of the settlement they would also lose out on a chance of getting a share of the $83 million Enron paid key workers in retention bonuses in December. The creditors in the bankruptcy case gave up all rights to the $83 million -- an indication of their opinion about the possibility of recovering the money. The settlement is a bit of positive news for a beleaguered Enron. Current law does not require a bankrupt company to pay any severance at all. But the company and its creditors did so, because it moves the issue off the table and enables them to reorganize the company without distractions. Asked why the creditors had paid severance when not required to, their attorney, Susheel Kirpalani, said only, "There are no certainties in litigation." Asked if public relations might have something to do with it, he replied, "No comment" -- and winked.

OSHA targets downtown post office

Branch plans to contest five alleged safety violations, $149,000 in fines

By LAUREN BAYNE ANDERSON

The Occupational Safety and Health Administration on Tuesday cited the U.S. Postal Service's main office downtown, alleging five safety violations and proposing $149,000 in fines. At least two of the citations concerned issues that could cause death or serious physical harm, OSHA said. Under the agency's rules, all citations are considered allegations and all fines proposals until the matter is resolved. OSHA's so-called "serious violations" concerned the post office's alleged failure to maintain fixed ladders in a safe condition and to securely fasten machine guards to the frames of machines. But the most severe allegations concern what OSHA calls "willful violations," said Joe Reina, the agency's deputy regional administrator. A willful violation is one in which a company knows the rules but blatantly disregards them, he said. The post office on Franklin was cited twice for such alleged violations. The Postal Service has 15 working days to either agree to pay the fine, request an informal conference or file a notice of contest. In a written statement issued Tuesday, the post office said it disagreed with the citations and plans to fight them through the appeals process. "There are obvious differences of opinion," the Postal Service said in the statement. The Postal Service said it was not aware of any injuries caused by the alleged hazards, and it has taken precautions to ensure that no such hazards exist. OSHA officials said they could not comment on whether there were injuries until the issue is resolved. Linda Castillo, president of the Houston-area branch of the American Postal Workers Union, said she hopes the citations will encourage the post office to take safety more seriously. In the past, safety violations were reported, but nothing was done, Castillo said. "I think it will give the postal workers some hope that if they do report violations, they will be handled," Castillo said.

Copyright 2002 Houston Chronicle

Harris County labor leaders back local union

By Michael Clements

The Daily News

TEXAS CITY — The Harris County AFL-CIO Council bestowed a dubious award on two Texas City employers Friday afternoon.

Between 30 and 40 people came to Galveston County to declare “No Justice Here” at Sterling Chemicals and Dow Chemical in Texas City.

“We’re trying to teach them to be better citizens in this community,” said Richard Shaw, secretary-treasurer for the Harris County AFL-CIO.

Shaw said the group had started Friday morning on a bus tour to various spots in the Houston area.

In Texas City, Shaw told Jesse Sanchez, business manager of the Texas City Metal Trades Council, the group had been looking for justice for workers from the employers it had visited.

“It’s been real hard to find, I can tell you that,” Shaw said. The council has been negotiating labor contracts with both Dow and Sterling for the past several weeks.

Officials with each company have stood by their contract offers. They said they believe the offers were fair and competitive.

Earlier this month, the union workers voted down a contract proposal by Sterling. In return, the company went ahead with a promised lockout of its 215 union employees.

“They really don’t care if these guys come back or not,” Sanchez told the group as it assembled in front of the Sterling plant on Second Avenue.

The union and Sterling officials met this week and planned to meet again on Tuesday. According to a statement from the union, little progress was made during this week’s meetings.

Sanchez said Sterling management locked the workers out in an effort to apply financial pressure to them. He said company representatives had intensified the pressure by announcing that the locked out workers would lose their medical benefits on Monday and by contesting their eligibility for unemployment compensation.

Sanchez said the company had 14 days from the day of the lockout to contest the unemployment benefits. Sanchez said Friday was the last day, and that management chose that day to contest the benefits to drag the process out.

Shaw said his organization was upset because Sterling’s actions were hurting the workers’ families and the community.

Before it got to Sterling, the group had stopped at Dow Chemical where it tried to get company officials to accept the No Justice Here award on behalf of both companies. Shaw said he wasn’t surprised the company didn’t want the award.

While Shaw admitted the award was given tongue-in-cheek, he said it was meant to draw attention to serious problems.

Neither Shaw nor Harris County AFL-CIO Council president E. Dale Wortham were impressed by the fact that the National Labor Relations Board has dismissed complaints filed by the union against Dow.

Wortham pointed out that the board’s administrative law judges were political appointees. He said that if the union appealed the dismissal, his organization would stand behind the decision. “In our view, the charges are still valid,” he said.

Union officials would not comment on the board’s action saying they wanted to consult with their lawyers.