By The Star Staff
The Electrical Industry and Irrigation Workers Union (UTIER by its Spanish initials), which represents Puerto Rico Electric Power Authority (PREPA) workers, asked the court this week to reject the Financial Oversight and Management Board’s (FOMB) petition to eliminate a pair of collective bargaining agreements (CBAs).
The oversight board earlier this month said PREPA has two remaining CBAs -- one with UTIER, with approximately 139 active members remaining, and one with the Union of Independent Professional Employees, with some three active members remaining.
Since the oversight board’s arrival, the plan to dismantle PREPA has been accelerated, the union argued.
“The plan was conceived in no small part for the express purpose of ridding PREPA of its unions, in particular UTIER,” the union said. “Looking at the facts, there can be no doubts about this. The Oversight Board and PREPA have attacked UTIER from every angle.”
UTIER added that the public-private partnership agreements with LUMA Energy and Genera PR were used to hinder the unions.
“Now, the FOMB wants to deprive UTIER of its collective bargaining agreement,” the union said. “The document that so many fought long and hard for to establish a fair and equitable labor relation with PREPA. Moreover, the Oversight Board expects to take down the Retirement System with it.”
The oversight board argues that the rejection of UTIER’s collective bargaining agreement (CBA) is the only viable path for PREPA’s reorganization.
“However, the Oversight Board has not demonstrated the quantum of proof necessary to justify the rejection of the CBA,” the union said. “Furthermore, it has failed to engage in the required good faith negotiations that could potentially lead to a reasonable solution for all parties involved. Therefore, UTIER respectfully requests that the Court deny the Oversight Board’s request for CBA rejection.”
Under the Bankruptcy Code, “the trustee, subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor. Generally, the only issue before a court is whether assumption or rejection is based on business judgment. Thus, to satisfy the business judgment test, the debtor must show that the proposed course of action will be advantageous to the estate and the decision is based on sound business judgment.”
In a separate motion filed Jan. 9, the PREPA retirement system said the utility couldn’t modify its pension obligations by rejecting its contract with its union.
The retirement system, known as the Sistema de Retiro de los Empleados de la Autoridad de Energía Eléctrica, argued that it was a creditor, and its governance can’t be changed by the debt plan.