[Congressional Record (Bound Edition), Volume 150 (2004), Part 2]
[House]
[Pages 1632-1633]
[From the U.S. Government Publishing Office, www.gpo.gov]




          SAFEGUARDING ASSETS FOR EMPLOYEES IN BANKRUPTCY ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Illinois (Mr. Gutierrez) is recognized for 5 minutes.
  Mr. GUTIERREZ. Mr. Speaker, today I rise to introduce the 
Safeguarding Assets for Employees in Bankruptcy Act, along with my 
colleagues, the gentlewoman from Illinois (Ms. Schakowsky), the 
gentleman from Illinois (Mr. Davis), the gentleman from Illinois (Mr. 
Lipinski), the gentleman from Illinois (Mr. Costello), the gentleman 
from Illinois (Mr. Rush), the gentleman from Illinois (Mr. Jackson), 
and the gentleman from Illinois (Mr. Emanuel).

[[Page 1633]]

  The SAFE in Bankruptcy language is designed to protect workers' 
claims when their employer files for bankruptcy.
  My bill would create a priority for claims arising under the Worker 
Adjustment and Retraining Notification, or what is commonly known as 
the WARN Act. The WARN Act requires an employer to provide 60-days 
notice to workers before closing its doors. If a company fails to 
comply with the law and gives fewer than 60-days notice, workers are 
entitled to salary and benefits, according to the Federal legislation, 
for up to 60 days. My legislation provides a priority for those claims 
of 60 days in bankruptcy court.
  When a company closes its doors and files for bankruptcy, the effects 
on the employees and the community are often devastating. A number of 
my constituents have lost their jobs at the Fannie May Candy Company in 
Chicago, which has closed its doors and filed for bankruptcy. These 
employees, many of whom had loyally served the company for decades, up 
to 37 years, were provided with only 10 days notice before they lost 
their jobs.
  Too often, companies hope to duck their responsibilities of 60 days 
of pay under the WARN Act by filing for bankruptcy, assuming that the 
claims for the workers would be paid last and only if there is any 
money left to all the others owed in the estate. My legislation makes 
these claims a priority, ensuring that companies will think twice 
before ignoring their responsibilities to employees under Federal law.
  In addition, my legislation provides a long overdue increase in the 
wage cap for employees from $4,000 to $20,000 and eliminates the 
lookback periods for these claims. The current lookback period limits 
the recovery of benefits to those earned within the last 90 days, which 
unfairly penalizes employees whose benefits have accrued over a longer 
period.
  As in the case of Fannie May, the contract said for every year of 
employment they would get one week of severance pay. Well, we have 
employees that were there for 37 years, and they are getting nothing.
  These small reforms are designed to soften the blow to employees who 
have had the rug pulled out from under them without warning. 
Unfortunately, in the current economy, this problem is not limited to 
my constituents but is occurring in every district.
  I urge all of my colleagues to join me in supporting these needed 
reforms for the loyal workers of Fannie May and other hard-working 
employees across the country. I think it is important, Mr. Speaker, 
that when a company closes its doors and does not even follow Federal 
law under the WARN Act and gives them the 60 days, they simply walk 
into court and say, we filed bankruptcy, now we do not have to pay them 
the 60 days, that those employees that were owed 60 days are properly 
adjusted in bankruptcy court.
  That is what my legislation wishes to do to honor the work of hard-
working Americans.
  With that, I will bring this up to the desk and introduce this 
legislation.

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