Former Enron workers reach severance agreement with bankrupt corporation

HOUSTON, June 13, 2002 — Former Enron workers and the court- appointed Employee Committee, supported by the AFL-CIO and the Rainbow/PUSH Coalition recently announced an historic agreement on severance with Enron Corp. and its Creditors’ Committee.

The agreement provides severance payments of more than what employees have already received with the possibility of tens of millions more to 4,200 Enron workers who were laid-off as a result of the company’s collapse. This means that the efforts of the workers and their supporters will have resulted in at least $34 million more in severance.

The agreement gives Enron workers who wish to accept the settlement their entire severance owed under the Enron severance plan up to a cap of $13,500. Former Enron workers who do not want to accept this deal can opt out and pursue their own claim individually. Before the workers’ campaign began severance had been capped at $4,500. The Enron severance plan entitled individual workers to payments based on their length of employment and their salary. The agreement will be filed with the United States Bankruptcy Court of Southern New York recently.

In addition, the agreement gives the court-appointed Employee Committee the right to claw back more than $80 million in so-called retention bonuses paid to Enron executives on the eve of bankruptcy. Any money recaptured will go to workers whose severance and other benefits were frozen when Enron declared bankruptcy.

“This is an important milestone for former Enron workers,” commented former Enron employee Dennis Vegas. “Many families have had a difficult time meeting their financial obligations and if the agreement is approved, it will provide much needed relief. The process has not been easy and we owe a great deal of gratitude to many for reaching this accord, but in particular, the AFL CIO for their leadership and willingness to cover the legal fees.”

“The AFL-CIO is pleased the former Enron workers have emerged victorious in a difficult and lengthy fight to win severance payments,” said John Sweeney, president of the AFL-CIO, which represents 13 million American working men and women and their unions.

The AFL-CIO spearheaded a campaign among union members to push for a fair severance package for the workers and hired attorneys to represent the former workers at no cost to them. In February, the laid-off workers received a $5 million emergency severance payment. Recently’s settlement brings the total severance amount to three times the level it was at when the campaign began in February.

“Unions exist to improve the lives of working families,” said Linda Chavez-Thompson, executive vice president of the AFL-CIO. “When we learned that Enron workers lost hundreds of thousands of dollars in their retirement savings, we knew we could help.”

As a part of the severance campaign, the AFL-CIO engaged its membership nationwide. Union members leafleted creditor committee banks in cities across the country and sent more than 55,000 faxes and phone calls to members of the creditors committee and Enron executives to support a fair severance package for the former employees.

Corporate abuse and mismanagement of workers’ retirement savings have affected working families across the nation. To push for change, the AFL- CIO’s Executive Council passed a resolution that called on the Bush administration and federal regulators “to enact and enforce broad, specific reforms to strengthen and protect workers’ retirement security to hold corporate executives and directors to higher standards in governing corporations’ affairs, and to make them accountable for their malfeasance and breach of trust.”

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