Judge allows seniority bumping in A&P bankruptcy case
Judge allows seniority bumping in A&P bankruptcy case
A judge ruled Sept. 1 that A&P can place restrictions on seniority bumping rights for employees at 25 stores set to close in October, but also said workers at those stores should receive more severance than what the company wanted to pay.
While acknowledging the frustration A&P workers are experiencing due to the company not honoring its contract, U.S. Bankruptcy Judge Robert Drain said, “[B]ankruptcy as a whole is about broken promises.”
Drain gave union officials until Sept. 4 to come up with a plan for the approved bumping procedures that would place laid-off employees in other stores.
Regarding the severance payments, A&P initially proposed paying 25 percent of what they are owed, raising the offer to 50 percent with the provision that terminated workers not seek additional payments. Drain recommended a severance payment of 52 percent, with an additional 10 percent if sufficient funds are there upon completion of the bankruptcy. The increased amount must be approved by A&P’s secured creditors and lenders.
The ruling comes after A&P and the United Food & Commercial Workers locals failed to reach a settlement agreement by Drain’s deadline of Sept. 1.
A&P is looking to use some of the savings in severance payouts as part of a $5 million bonus package to retain 495 key executives during the transitional phase. Drain has scheduled a Sept. 11 hearing on that matter.
“I don't see any purpose in rewarding the same people who drove this company into bankruptcy,” John Niccollai of Local 464A was quoted as saying in the New York Post.
