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AFL-CIO Enters WorldCom Fray

Sep 10, 2002 | The Clarion-Ledger

Former WorldCom employees who are getting financial and organizational aid from the AFL-CIO to request health care benefits, unpaid commissions and wages as severance payments are benefiting from organized labor's activism.

The AFL-CIO filed a motion Monday with the U.S. Bankruptcy Court for the Southern District of New York on behalf of more than 40 WorldCom employees from Connecticut to Oklahoma who were summarily laid off with unpaid severance and medical benefits of as much as $50,000 each.

Under federal bankruptcy law, nonunion workers without contractually guaranteed severance benefits are limited to individual payments of $4,650 each unless the judge rules otherwise.

"We're in the business of organizing workers and we see ourselves as representing the victims of corporate malfeasance," said Ron Blackwell, the AFL-CIO's director of corporate affairs. "We've always seen ourselves as representing all American workers whether they are members of unions or not."

The judge in WorldCom's bankruptcy case is not expected to rule on the AFL-CIO's motion until Oct. 1. WorldCom filed a motion last week seeking to give former workers more than $4,650 each. A spokeswoman had declined comment on the AFL-CIO's involvement, but defended the company's severance motion as comprehensive.

Lobbying by the AFL-CIO on behalf of Enron workers this year helped increase their severance to $13,500. The breakthrough came by lobbying members of the Enron creditors committee, which included major banks such as Citicorp and J.P. Morgan.

The AFL-CIO, a 66-member umbrella group for 13 million American workers, also has taken on other corporate giants in recent years.

IBM Corp. became a target three years ago when its nonunion, largely professional work force learned that its traditional pension plan was being converted into a "cash balance" plan with less lucrative benefits for long-serving employees.

Some IBM workers in Vermont even went so far as to try organizing a union. That effort failed, but the AFL-CIO's help in highlighting the pension issue led the Internal Revenue Service to order a moratorium on new conversions of traditional pension plans to the cash balance version.

Blackwell said organized labor's role in WorldCom, Enron and IBM as high visibility national examples of what it does all the time.

Every time a textile mill closes in a small town, the local union organizes a similar effort to help unemployed workers, whether they are union members or not, Blackwell said.

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