The union representing Haggen’s employees says it will fight to keep its contract as the company reorganizes after filing for Chapter 11 bankruptcy.
In a letter sent to Haggen employees Wednesday night, Sept. 9, UFCW 21 President Todd Crosby said the union is coordinating effors for all the local chapters up and down the West Coast in order to have a focused response and keeping a united front. The letter was also critical of Haggen’s handling of the Tuesday announcement of its Chapter 11 filing.
“It is simply wrong for all of our hard-working Haggen employees to have learned about this bankruptcy filing on the local news,” Crosby said in the letter.
While it is unclear at this early stage how much influence the union will have on Haggen’s reorganization plans, it does represent a majority of Haggen’s current workforce. According to court documents, about 80 percent — or around 8,770 employees — are union members.
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The union, also known as the United Food and Commercial Workers, will be walking a fine line during Haggen’s bankruptcy proceedings. Courts have allowed companies to cancel bargaining agreements with unions, but usually only under certain circumstances, according to coursework document from the National Paralegal College. Those circumstances include the company proposing modifications to help alleviate the need for bankruptcy and the company acting in good faith with the union.
Haggen did not immediately respond to a request to comment on the union letter.
In the letter, Crosby said the union’s legal team is analyzing the bankruptcy filing to see what it means to the employees.
“We want to be very clear, our union contracts are still intact. We expect Haggen to honor them and we will fight to make sure they do,” Crosby said.
HAGGEN GETS INITIAL COURT APPROVAL TO PAY BILLS, WAGES
Haggen received interim court approval Thursday, Sept. 10 to get financing to cover payroll and other expenses.
U.S. Bankruptcy Judge Kevin Gross approved several orders geared toward allowing the Bellingham-based grocer to continue operating its stores while pursuing Chapter 11 bankruptcy reorganization.
Haggen said it had received commitments for up to $215 million in debtor-in-possession financing from its existing lenders to maintain operations.
According to court documents, the struggling grocer owes its creditors more than $55 million.