The House Judiciary Committee Subcommittee on Administrative and Commercial Law reported favorably Wednesday on H.R. 4677, the Protecting Employees and Retirees in Business Bankruptcy Act of 2010. This legislation will give all workers the help that has been sorely missing if an employer files for Chapter 11 bankruptcy.

Too many U.S. workers in all industries have experienced the inequality and unfairness of the current bankruptcy laws. ALPA and other AFL-CIO affiliates used our unfortunate experience with these injustices to provide valuable input to Capitol Hill as they drafted H.R. 4677.

H.R. 4677 would increase the wage priority from $10,000 to $20,000 and separate other benefits such as health-care costs from this number. It would increase the priority for claims made by employees, seek to curb the rampant executive bonuses that have recently been given while workers have made severe sacrifices in bankruptcies, and undertake a significant overhaul of the Section 1113 process, by which collective bargaining agreements can be modified in the bankruptcy process, to provide bankruptcy courts with the tools they need to restore balance and fairness in the bankruptcy process.

H.R. 4677 seeks to restore collective bargaining as the primary process to determine whether concessions are truly needed and to negotiate fair but necessary adjustments to binding labor agreements. The bill would also restore to workers, under the Railway Labor Act, the right to strike that was wrongly taken away in court decisions, a critical right that is needed to keep the concessionary bargaining process fair and honest.

Two amendments were offered during the markup. The first, offered by ranking member Trent Franks (R-AZ), would essentially replace the entire reform bill in favor of a study regarding the effects of bankruptcy and the needs of the companies. The amendment failed along party lines, with all Democrats opposing and all Republicans supporting.

The second amendment was offered by Congressman Dan Maffei (D-NY). His amendment would extend the existing exemption for rail collective bargaining agreements from the Section 1113 process to airline labor agreements and thereby create a “lockbox approach” for collective bargaining agreements entered into by aviation workers. In this scenario, if an airline filed for bankruptcy, a bankruptcy court could not modify the collective bargaining agreement, which could only be changed under the normal bargaining procedures of the Railway Labor Act. It passed along party lines, with all Democrats supporting and all Republicans opposing.

ALPA has been working for several years to initiate the critically needed reforms set forth in H.R. 4677. Your union has teamed up with other unions representing workers from all sectors of our economy to push this comprehensive reform legislation, which would help all workers. H.R. 4677 must still pass the full Judiciary Committee if it is to come to a vote on the floor of the House of Representatives. ALPA and the other AFL-CIO affiliates are also continuing to work with our allies in the Senate to move the companion legislation through that chamber.