April 2, 2007: Commercial movers from Teamster Local 814 in New York City have been hit with healthcare cuts—following a concessionary contract that diverted millions of dollars in contributions from their health and welfare fund into their pension plan.

Under the terms of the 2005 contract, the $3.96 per hour contribution that was supposed to go into members’ health and welfare fund went into the Pension Fund instead.

Poison Pill
“We said at the time that we were robbing Peter to pay Paul and that if we did not defeat these concessions we were going to be hit with healthcare cuts,” said Local 814 Teamster Eddie Freyta. “Unfortunately, we were right.”

Teamsters everywhere need to be on the lookout for this false fix to pension problems. It’s a poison pill,” Freyta said.

The cuts hiked members’ annual deductible and increased co-pays by more than double. Members will also be charged $100 for every emergency room visit

Employers have reportedly agreed to increase their contributions to the Health and Welfare Fund by $1.04 and hour. But Local 814 officials were unable to tell members if that increase was temporary or permanent.

For years, New York City moving companies shortchanged the Local 814 pension fund. They created tiers of casuals without benefits. They ignored contract language that required them to hire a certain ratio of casual employees (“industry men”) who receive contributions. They opened up nonunion operations.

Funds Diverted
Local 814 officials failed to crack down on these schemes. The employers profited by not paying pension contributions. After the stock market fell following September 11th, the pension fund faced a shortfall of tens of millions of dollars.

That’s when employers and Local 814 officials negotiated a deal to divert members’ health and welfare and annuity contributions into the pension fund to make up for the shortfall.

Members initially voted down the deal after a campaign by a rank-and-file committee Members for a Strong Contract. But the givebacks were ultimately ratified after a twenty day strike in which officials offered no plan to win.

“It was incredibly reckless what they did—and now members are paying the price,” said Walter Taylor, one of the movers who led the rank-and-file campaign to reject the contract. “We need to rebuild our local’s power—start to enforce our contracts, stand up to the employers, and organize the nonunion competition. Otherwise the cycle of givebacks is just going to continue.”