Whether or not to restore the pension and health benefits of more than 1,000 casino workers at the Trump Taj Mahal in Atlantic City is the decision the Supreme Court is being asked to make in the ongoing bankruptcy dispute.
The issue at hand is a conflict between bankruptcy laws and labor laws, with the former allowing a business to be reorganized and remain in operation, while the latter calls for the preservation of collective bargaining agreements. General Counsel for Unite Here, Richard G. McCraken, said, “This is about how a bankruptcy was used to transfer value from working people to the super-rich,” according to the Los Angeles Times, United Here, is the casino and hotel workers’ union that appealed to the high court.
After filing for bankruptcy in 2014, the casino, which was founded by Donald Trump, was purchased by billionaire business magnate Carl Icahn.
In January, the 3rd Circuit Court of Appeals said that Trump’s “plan of reorganization was contingent on the rejection of the collective bargaining agreement,” with the union. A “capital infusion of $100 million” to keep the casino in operation,” was promised by Icahn, but “only if the CBA and tax relief contingencies are achieved.” Based on that understanding, an order by a bankruptcy judge canceling the pension contributions and health insurance benefits called for in the union’s contract were upheld by the Philadelphia-based appeals court. Judge Jane Roth wrote, “It is preferable to preserve jobs through a rejection of a CBA, as opposed to losing the positions permanently.”
The Supreme Court is being urged by the union to review and reverse Judge Roth’s ruling, making the argument that even if the labor laws expire during a bankruptcy, they still call for preserving collective bargaining agreements. The National Labor Relations Board agreed with that assertion and when the case was before the 3rd Circuit filed a brief supporting the casino workers union. The argument in the appeal petition in Unite Here Local 54 vs. Trump Entertainment Resorts asserts that casino management was wrongly permitted to bypass the union by the bankruptcy judge.
Trump’s representatives and union officials met on two occasions to discuss a new contract but failed to reach an agreement. Then on October 17, 2014, the bankruptcy judge granted Trump’s motion. The union said, “Trump immediately implemented the changes in terms and conditions of employment that the Union had rejected. It ceased making contributions to the pension, health and welfare, and severance funds that provided benefits to Trump’s employees. It expanded its own authority to consolidate positions, assign work and subcontract, which resulted in layoffs and loss of pay.”
The casino emerged from bankruptcy in February, a short time after the ruling by the appeals court. While Trump’s name hasn’t been removed from the property’s marquee, Icahn is the casino’s new owner.
On Thursday, the justices met to vote on dozens of appeals that are pending, including United Here’s case against Trump Entertainment Resorts. Orders will be issued by the court on Tuesday morning and at that time could announce whether it will hear the case.