The Supreme Court on Tuesday rejected a case that a union brought against a former Donald Trump casino in Atlantic City, N.J.
{mosads}More than 1,000 workers of the Trump Taj Mahal casino said they lost their pensions, health coverage and other benefits when the casino’s parent company, Trump Entertainment Resorts, filed for bankruptcy in 2014.
The collective bargaining agreement (CBA) with Unite Here Local 54 expired five days after the company filed for bankruptcy. While negotiating a new agreement, the company filed a motion asking the bankruptcy court to abolish the terms of the agreement.
The company claimed it had to reject the CBA in order to reorganize.
On appeal, Unite Here Local 54 asked the justices to weigh whether a bankruptcy court could allow a company to stop paying the agreed-upon benefits when no collective bargaining agreement exists.
Under the National Labor Relations Act, they argued, Trump Entertainment Resorts was statutorily obligated to fulfill the terms and conditions of an expired CBA until the parties reach a new agreement or bargain to impasse.
But because CBA obligations continue even after a CBA agreement has expired, the 3rd Circuit Court of Appeals said a company filing for bankruptcy has the same need for relief pre- and post-expiration in order to reorganize.
“Under the policies of bankruptcy law, it is preferable to preserve jobs through a rejection of a CBA, as opposed to losing the positions permanently by requiring the debtor to comply with the continuing obligations set out by the CBA,” the court said.
— This story was updated at 11:21 a.m.