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Labor Report

Alt-Fuel Company Declares Interest in Buying, Converting Idled Philadelphia Refinery

Philadelphia Energy Solutions has laid off hundreds of unionized employees as part of the shutdown of its 1,300-acre South Philly refinery, but a city-based alternative fuel company may be positioning itself to buy the facility, which is the oldest and largest of its kind of the East Coast.

Reuters reported on August 22 that S.G. Preston Co. has declared its interest in purchasing the refinery as PES pursues Chapter 11 bankruptcy reorganization. Details are few about the potential offer, but the biofuels producer would convert at least a portion of the facility to make renewable diesel and jet fuels from locally sourced fats, oils, and grease. Reuters cited unnamed sources who have knowledge of meetings involving the companies, trade groups, labor officials, and city officials.

In a statement to the news agency, S.G. Preston Chief Executive Randy LeTang said, “We can use the existing equipment, labor and regional waste streams to show the rest of the country how to bring back our jobs and industries.”
Most of PES’ 1,100 employees have already been dismissed in advance of a previously announced August 25 layoff date. Workers were provided no severance and are to lose employer-sponsored healthcare coverage.

On August 19, federal, state, and local elected officials joined labor leaders and other worker advocates at Steamfitters Local 420 in Northeast Philadelphia where they called upon PES to ensure the safety of the refinery and preserve its future viability. Labor leaders said that union members should be retained on staff because they are uniquely skilled and experienced to serve as effective caretakers. PES has said it plans to employ non-union workers and managers to shut down the facility.

The City of Philadelphia has created the Refinery Advisory Group with members representing the government, business, labor/employment, and academic/environmental sectors, along with neighbors of the community surrounding the facility. The committee will consider how the closure will affect the community and region, share ideas about how the site can be reused, and gather feedback from the public and stakeholders. A series of subcommittee meetings have been scheduled at a local school.

Healthcare Costs Rising Twice as Fast as Wages for Workers on Employer Plans

A new study by the Kaiser Family Foundation has found that average health-related spending by workers with employer-sponsored health plans has increased twice as fast as their wages over the last decade, largely due to rising deductibles.

The Foundation analyzed a sample of health benefit claims from the IBM MarketScan Commercial Claims and Encounters as well as the Foundation’s Employer Health Benefits Survey.

Excluding employer contributions, the average family spent $4,706 on premiums and $3,020 on out-of-pocket costs for a combined cost of $7,726 in 2018. That figure represents an 18% increase over five years, a rate that exceeds the 8% rate of inflation and 12% increase in workers’ wages over the same period.

Over the last 10 years, average family spending has increased by 67%, including a 55% increase in premiums and a 70% increase on cost-sharing expenditures. Average wages have increased by 26% during the decade. Annual employer healthcare spending on behalf of workers and their families has increased by 51% from $10,008 to $15,159 on average.

The Foundation’s new analysis is consistent with earlier studies and reports documenting the rising cost of healthcare relative to wages and other economic indicators. In May, another Kaiser study found that average deductibles have grown 212% over the last decade for workers who are enrolled in employer-sponsored health plans. The same research concluded that about 23.6 million Americans with employer health plans spent at least 10 percent of their income on premiums and/or out-of-pocket expenses. About 150 million Americans under age 65 have coverage through an employer.

The Pennsylvania Health Access Network and Altarum last year reported that half of adults residing in the Commonwealth struggle with health-care affordability, while one in three has difficulty paying medical bills, according to the Inquirer.

‘No-Poach’ Agreements on Trial as Western PA Firms Take Contract Fight to Supreme Court

The Pennsylvania Supreme Court has agreed to hear the latest appeal in a three-year legal battle between two Western Pennsylvania freight transport companies in a case that could have a lasting impact on the exposure of workers to non-compete and “no-poach” agreements entered by their employers.

Cranberry-based Pittsburgh Logistics Systems Inc. sued BeeMac Trucking of Ambridge in 2016 claiming that BeeMac violated a 2010 non-compete agreement between the firms by hiring four employees away from PLS, according to the Post-Gazette.

“Pittsburgh Logistics arranged the movement of freight throughout the U.S. by matching customers’ hauling needs with BeeMac’s trucking capabilities, giving some Pittsburgh Logistics’ employees access to customer receipts, fuel charges, customer lists, shipping routes and other proprietary information,” the newspaper reported.

By hiring the former PLS employees, BeeMac was able to “replicate PLS’s services, thereby cutting PLS out of the business,” PLS stated in its complaint.
The Beaver County Common Pleas Court and PA Superior Court each found that the no-poach agreement is unenforceable.

“We believe these types of no-hire contracts should be void against public policy because they essentially force a non-compete agreement on employees of companies without their consent, or even knowledge, in some cases,” the Superior Court ruled, according to the Post-Gazette. “We believe that if an employer wishes to limit its employees from future competition, this matter should be addressed directly between the employer and the employee, not between competing businesses.”

That finding seemed to contradict a historical trend in which “Pennsylvania courts have generally found non-compete agreements to be enforceable,” the newspaper reported.

Last year, a Western PA railroad industry manufacturer was a party in a landmark no-poach complaint and settlement announced by the Antitrust Division of the U.S. Department of Justice. In that case, Westinghouse Airbrakes Technology Corp. of Wilmerding and Knorr/Bremse AG of Germany illegally restricted competition for U.S. rail industry workers from 2009 to 2015. Affected workers later sued the companies to recover earnings they lost as a result of the no-poach agreement.

Large Employers Must File Pay Data by September 30 Despite White House Protests

The White House has renewed its effort to repeal an Equal Employment Opportunity Commission regulation requiring large employers to report payroll data classified by gender, race, and ethnic background.

Politico reported that the administration filed a legal brief on August 19 arguing that “advocacy groups do not have standing to sue over its move to cancel the collection of pay data from large employers that show how they compensate their employees based on race, gender, and ethnicity.”

In 2016, the EEOC introduced the new reporting requirement to track pay disparities and equal pay compliance. Companies with at least 100 employees are required to file EEO-1 Component 2 data form, which calls for information about employee hours and pay. The deadline for 2017 and 2018 forms is September 30.

The administration’s Office of Management and Budget stayed the requirement, but the National Women’s Law Center and Democracy Forward sued to reinstate it. A federal judge ruled in favor of the plaintiffs in March. In an appeal of that ruling, the administration is arguing that the advocacy groups don’t have standing in the issue.

The White House “doesn’t even try to claim that its actions were lawful, yet it's still fighting the court's ruling on technicalities," Democracy Forward stated in response to the filing, according to Politico. "The Trump administration is determined to let wage discrimination go unchecked, but we will press on in our legal fight to hold it accountable.”

Business News Daily has reported that companies have complained about the burden of additional reporting, and the difficulty of gathering dated information about their workers.

“While the Equal Employment Opportunity Commission (EEOC) is on the verge of receiving an avalanche of pay data forms from many American employers, many companies are scrambling to locate, organize, and submit the newly prescribed data regarding the gender, ethnicity, and job category of its workforce,” the Daily wrote.

Minor League Ballplayers Earn a Win in Fight for Fair Wages from Billion-Dollar Industry

The average Major League Baseball salary is $4.36 million a year, but financial prospects are a lot dimmer for those ballplayers who toil just one or two steps below the elite level, those who lie on the verge of making “The Show.”

A new federal court ruling has given those thousands of minor leaguers a glimmer of hope that they may someday be able to collect more than poverty wages as they pursue their elusive professional dreams. The L.A. Times reported that California’s Ninth Circuit has upheld a 2014 class action suit claiming that Major League teams fail to comply with minimum wage laws when paying their developmental players.

“They should be complying with those laws just like Walmart is complying with those laws,” said Garrett Broshuis, an attorney for the minor league players, according to the newspaper.

Pay disparities between the major and minor leagues are immense, although Major League franchises own the minor league teams and player contracts. The minimum annual salary for a Major League player is $555,000. For 2019, the highest paid individual will make $38.3 million. Before the 2019 season, Millville, N.J., native Mike Trout of the L.A. Angels signed a 12-year contract worth $430 million in guaranteed earnings, the richest in sports history.

According to Forbes, salaries at the Class AAA level (including the Lehigh Valley IronPigs and Scranton/Wilkes-Barre RailRiders) range from $2,150 to $2,700 per month for a 5.5-month season (about $12,000 to $15,000 per year) depending on the player’s tenure. Players at Class AA level (such as the Reading Phils, Harrisburg Senators, and Altoona Curve) earn about $1,700 per month while in-season. That’s less than $10,000 a year.

Major League Baseball set a record with $10.3 billion in revenue in 2018, while the average MLB team is valued at $1.78 billon.

“I would play hungry, and I would go to bed hungry,” one minor league player told PennLive for an article published last month. “I played in front of 10,000 people a night, and I wouldn't have food to eat after a game, and I wouldn’t have enough money to go get food.”