The March 2011 labor agreement between RG Steel and The United Steelworkers Union will be terminated Thursday and immediately replaced by a modified labor agreement if a motion filed late Friday with the bankruptcy court gets judicial approval at a hearing set for 10 a.m. Thursday.
The contract represents nearly 4,000 employees of the bankrupt steel company. RG Steel's Warren operation employs about 1,200 workers.
Company and union officials are calling the motion consensual, and the basis for the company extending some health benefits through the end of the month that might have otherwise stopped.
The motion proposes a flat wage of $20 per hour be enacted.
Approval of the motion will bring a number of other benefits to an immediate stop as the basic labor agreement of March 2011 is almost immediately expected to be replaced by the proposed modified labor agreement.
If the motion is approved, some benefits will be seen as having stopped retroactively to Aug. 10, something local union presidents say they were only alerted to late Friday after having been told previously to tell members their benefits were still completely intact at least through Aug. 15.
Among the benefits to be stopped with the modified labor agreement include RG Steel's obligations to contribute to the Steelworkers' Pension Trust, and all active and retiree benefit programs described in the basic labor agreement will be considered terminated effective Aug. 31.
"As a consequence of the imminent curtailment of continued funding, the company has advised the USW of its pressing need to terminate the 2011 BLA in all respects, except as specifically provided in this MLA.
"Accordingly, the company has advised the USW of its intention to seek court approval under section 1113 and 1114 of the Bankruptcy Code to terminate the 2011 BLA and all retiree welfare benefit programs sponsored by the debtors," the proposed motion states.
The debtors are to place into escrow $6.5 million from the proceeds of the assets sales "which will be used for the purpose of paying medical and prescription drug claims incurred on or before Aug. 31, and received on or after Aug. 11."
Objections to the motion can be filed with the court no later than noon Wednesday.
According to documents placed on record late Friday with the court, the action is being supported at the top levels of both company and union.
The motion filing includes a copy of a summary of what is identified as a "settlement and modified labor agreement.''
An exhibit attached to the proposed motion includes communications from David Pryzbylski, RG steel's chief administrative officer to USW District 1 Director David McCall dated Thursday, Aug. 16.
Local union presidents say they were told to expect a filing of a motion requesting the contract be terminated and replaced by a proposed modified labor agreement sometime next week, not Friday.
Kim Loccisano is a staff writer for the Belmont County Times Leader