Liz Feitl (center), AFL-CIO Community Services Liaison, discusses the Visteon situation with Sen. Vi Simpson and Rep. Matt Pierce in the White River Central Labor Council office.
Local Visteon workers were handed a nasty surprise last fall.
The plant in Bedford is scheduled to close by the end of June 2008. In an "effects bargaining session," Visteon management and IUE-CWA Local 907 crafted language they thought would ensure that laid-off workers would receive state unemployment insurance (UI) benefits immediately after the plant closing. The language was based on language used for more than a decade in other plant closures in Indiana.
To their chagrin, they learned that the Indiana Department of Workforce Development (DWD), headed by Commissioner Teresa L. Voors, a Mitch Daniels appointee, had begun "interpreting" effects-bargaining language in a way that departed from past practice.
At issue in the Visteon case were retention bonus payments workers had received from the company as a condition for not quitting before the plant closes. DWD wanted to delay UI payments by the number of months equal to the retention bonus divided by the monthly UI payment a worker would be due.
Visteon workers joined IUE-CWA 907, Indiana State AFL-CIO, local AFL-CIO Community Services Liaison Liz Feitl and a number of state legislators and senators to investigate the DWD decision and lobby for its reversal. Their efforts were rewarded in mid-November when DWD backed down.
In a communication sent to Rep. Eric Koch (R-Bedford), dated Nov. 19, 2007, Voors stated, "In the present circumstance. . . , we are well aware of the perceived injustice resulting from this administrative error. Thus, I am instructing DWD's unemployment staff to treat the payments offered as part of the Buyout Agreement as non-deductible income due to administrative error."
Feitl underlines the point of that victory: "Visteon workers who normally would have received UI benefits right away after the plant closing will in fact do so."
Rep. Matt Pierce (D-Bloomington) said DWD's attempted "interpretation" in the Visteon case could have reflected a desire to keep payouts from the UI fund as low as possible.
"Indiana Manufacturers Association, for one, routinely opposes any move that might increase its members' payments to the Unemployment Insurance fund," he said. Pierce noted that a lack of clarity about "bonus," "buyout settlement" and "severance package" provided DWD with the opportunity to reinterpret the law in a way that lowers payments from the fund.
A Jan. 29 Indianapolis Star story provides part of the larger context for the DWD action: "a shortfall . . . has developed in the unemployment compensation fund. That's because Indiana raised benefit levels available to laid-off workers to a maximum of $390 a week in 2000, from $288 a week. But the tax paid by businesses into the fund was not increased. One result: the fund now contains about $302 million, down from $350 million in October and $1.6 billion in 2000."
Despite the win for Visteon workers, a big problem remained. In her Nov. 19 communication to Koch, Voors also wrote, "This action is limited to this particular circumstance of administrative error and does not constitute a statement of DWD policy for interpretation of such payments in the future. ... DWD will soon issue an official agency policy regarding the interpretation of various buyout agreements."
To ensure the timely payment of UI benefits, Koch joined Democratic legislators Dennis Tyler, Terri Austin and Russ Stillwell to co-author House Bill 1219, titled "Unemployment Insurance." It passed the Indiana House 56-41 in January but was gutted in Senate committee.
The gutted language, with elaborations, was restored in Conference Committee. That reversal happened, explains Indiana AFL-CIO executive director Nancy Guyotte, because House sponsors of the bill met with Gov. Daniels and talked through the issues. Daniels signed the bill into law.
"At the end of this process, what's important," said Guyotte, "is the bipartisan consensus that prevailed. That's a good thing for the stability of this interpretation of UI benefits."
John Clower can be reached at jclower2@yahoo.com.