When workers at Republic Windows and Doors were informed in 2008 that the company was shutting its Goose Island plant, the resulting protest became a national rallying point that energized the labor movement and helped inspire the Occupy campaign.
Told they would not be paid severance or even the vacation pay they’d earned, the workers’ sit-in attracted the support of then President-elect Barack Obama and shamed the company’s lenders into ponying up a $1.75 million settlement package.
On Friday, another company, Sound Solutions Windows and Doors, finished closing down operations at its own factory at 4422 W. 46th St. near Midway Airport, leaving 200 people out of work who likewise will not receive any severance or payment for accrued vacation.
And as far as I can tell, that’s their tough luck because that’s just the way it’s going to be.
We’ve come a long way, baby.
The similarities between Republic Windows and Sound Solutions are many, starting with the fact Sound Solutions is owned by Ronald Spielman, who also had been an owner of Republic. Spielman sold his interest in Republic two years before its shutdown under circumstances that would later draw accusations from a federal bankruptcy trustee of improper self-dealing.
Sound Solutions would go on to become the recipient of millions of dollars in city contracts that previously had flowed to Republic to provide windows and doors to residents near O’Hare and Midway airports as part of the city’s noise abatement program.
But there is one big difference between the two closings.
The plant workers at Republic Windows were members of the United Electrical Workers (UW) union, while Sound Solutions workers were not unionized.
In fact, nearly three-fourths of those working at Sound Solutions were classified as “temps”— employed by a Cicero staffing agency and therefore not the legal responsibility of Sound Solutions at all, although many of them had worked full-time at the facility for years.
“Perma-temps” is what Carl Rosen, regional president of the United Electrical Workers, calls the arrangement. It’s a mechanism much in vogue with employers these days that allows them to pay low wages and no benefits while avoiding unionization. If workers try to organize, the company just gets itself another temp agency.
So, when Spielman announced June 5 that Sound Systems would be closing June 10 and liquidating its assets, there wasn’t any protest.
Company officials originally told the other 55 or so employees who were actually on the payroll of Sound Systems — mostly office workers — that they would be paid for any accrued vacation.
But when their final paycheck came, they learned they would not be paid for unused vacation from the previous year.
One employee told me this will cost him $3,000. Others were owed up to $6,000, he said.
Maybe that doesn’t sound like enough money to raise a stink, but I’m pretty sure it would look like a lot if you were out of work.
Remember, they’re not getting any severance.
Spielman declined to talk with me, referring questions to Tony Natale, who was brought in as Sound Systems’ chief restructuring officer in January after the company’s lenders became worried about protecting their investment.
Natale said he felt fortunate to be able to “cajole” those lenders — Signature Bank and Ridgestone Bank — to pay $75,000 of the $180,000 due the employees for vacation benefits.
“Legally, they don’t believe they have an obligation to pay that,” he said, noting that if the company were to go into bankruptcy, the secured claims of the lenders would be given priority.
Neither does Sound Systems believe it was obligated to pay employees severance under the state or federal WARN Acts, which generally require employers to give workers two months notice of a plant closing or mass layoff — or pay them for that period.
Natale said Sound Systems is exempt as a failing business that is being liquidated and was unable to raise capital.
He promised there will be no repeat of the situation in which Republic Windows’ former president, Rich Gillman, tried to move its equipment to Iowa despite having received a $10 million city tax subsidy to build the Goose Island plant. Gillman was sentenced in December to four years in prison.
“We’ll be holding an auction,” Natale said.
Another major difference at Republic Windows is that the closing came right after the big federal bank bailout, which allowed the Republic workers to adopt the slogan: “The banks got bailed out. We got sold out.”
At the time, that proved so politically unpalatable that the banks had to step in and do the right thing. Times change.
The guy who lost his vacation pay wanted to know who is going to stand up for him and his fellow workers. Sorry to say, that usually has to start with workers standing up for themselves.