The U.S. Bankruptcy Court for the District of New Jersey granted a motion Monday that allows five Connecticut health care centers to implement temporary modifications to their collective bargaining agreements, thereby avoiding what otherwise would have been the imminent closure of the facilities, the Centers announced.
The Court order allows the Centers to temporarily implement virtually the same terms and conditions of employment for Union-represented employees that have applied to non-union employees since Oct. 31, 2011. The Centers’ union workforces are represented by the New England Health Care Employees Union, District 1199, SEIU (Union).
Without approval of the motion, the Centers would have suffered substantial monthly losses as a result of the terms of the Union labor agreements. The losses would have prevented the Centers from obtaining debtor-in-possession financing and forced them to close and liquidate.
The Centers filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Feb. 24 in order to implement plans to create competitive and durable cost structures. The Centers’ plans include gaining relief from unsustainable Union pension and medical benefits costs and other restrictive provisions in the Union labor agreements that hamstring the Centers’ flexibility and competitiveness.