Press Releases

Today, Congressman John Conyers, Jr. (D-Mich.) introduced H.R. 5133, the “Protecting Employees and Retirees in Municipal Bankruptcies Act of 2014,” along with Representatives Sheila Jackson Lee (D-Texas), Steve Cohen (D-Tenn.), and Henry C. “Hank” Johnson (D-Ga.). Specifically, this legislation amends chapter 9 of the Bankruptcy Code to strengthen protections for public employees and retirees in municipal bankruptcy cases by: clarifying the criteria that a municipality must meet before it can obtain chapter 9 bankruptcy relief, ensuring that the interests of employees and retirees are represented in the chapter 9 case, and imposing heightened standards that a municipality must meet before it may modify any collective bargaining agreement or retiree benefit. The “Protecting Employees and Retirees in Municipal Bankruptcies Act of 2014” is supported by both the American Federation of State, County and Municipal Employees (AFSCME) and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

Representative Conyers also introduced H.R. 5132, the “Preventing the Termination of Utility Service in Bankruptcy Act of 2014,” along with Representatives Zoe Lofgren (D-Calif.), Sheila Jackson Lee (D-Texas), Henry C. “Hank” Johnson (D-Ga.), and Eleanor Holmes Norton (D-DC). This legislation would ensure that a consumer who has filed for bankruptcy relief is not forced to pay security deposits to maintain water, electricity, and gas utility service simply because he or she has filed for bankruptcy. The “Preventing the Termination of Utility Service in Bankruptcy Act of 2014” is supported by the National Association of Consumer Bankruptcy Attorneys.

“As the City of Detroit continues to work through bankruptcy proceedings and recover from the aftershocks of the global financial crisis, I introduced today two pieces of legislation to safeguard the earned benefits of public employees as well as retirees, and to protect individuals’ access to vital utilities like water.

“When a city files for bankruptcy, its dedicated public employees - the policemen, firefighters, and workers who selflessly served their city for years - are at risk of having their hard-earned wages, pensions and health benefits reduced or even eliminated entirely. While the City of Detroit worked to limit the blow of bankruptcy-driven cuts to employee wages and retirees’ pensions, the financial security of Detroit’s public workers was placed in serious jeopardy, and the case set a potentially problematic precedent. Other cities facing these bankruptcy challenges may try to use current bankruptcy law to set aside collective bargaining agreements and worker protections. Today, I introduced the ‘Protecting Employees and Retirees in Municipal Bankruptcies Act of 2014’ to guard against this prospect, and provide guidelines on how to protect public employees in future bankruptcy cases. Specifically, my legislation requires a city to engage in meaningful, good faith negotiations with its employees and retirees before applying for chapter 9 bankruptcy relief, and ensures public employees and retirees have a say in any plan that would modify their benefits.

“In addition, I introduced legislation to defend the public’s right to utility services, and protect against unscrupulous demands from utility companies for water, gas and electricity. At times, individuals - through no fault of their own - struggle to pay for these services often in the face of devastating medical debt or job loss. Current law permits utility companies to force individuals going through bankruptcy, even if they are current on their bills, to pay hefty security deposits - typically two months or more of their average bill - in exchange for the utility continuing to supply service. I introduced the ‘Preventing Termination of Utility Services in Bankruptcy Act of 2014,’ to disallow this injustice. As water rates in some cities such as Detroit have skyrocketed in excess of 100% over the past decade, it is unconscionable to terminate a family’s access to such life-saving services that keeps the lights on, warms homes, and ensures families can bathe, hydrate and prepare meals.”

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