West River Health Care Center and four others managed by HealthBridge Management LLC have filed Chapter 11 bankruptcy papers in hope of implementing a new cost structure, a move a union representative said aims to avoid paying workers what they are due.
Healthcare staff, including CNAs, dietary, laundry and housekeeping employees at the five nursing homes have been on strike since last year as the management company and the union battle over health care costs and other benefits.
The bankruptcy filing comes at a time when HealthBridge has just been instructed to return striking workers to their nursing home jobs under earlier contracts as the union and company continue to negotiate new contracts.
A HealthBridge spokesman said the Chapter 11 filing plan “includes gaining relief from unsustainable union pension and medical benefits costs and other restrictive SEIU labor agreements that hamstring the centers’ flexibility and competitiveness.”
The Chapter 11 filing applies only to the five nursing homes that HealthBridge manages, not HealthBridge itself or other health care centers it manages: It also manages the Golden Hill Nursing Home in Milford.
HealthBridge spokesman Lance Ignon said the filing does not impact orders that employees return to work March 3.
“Each center intends to continue to fully comply with the District Court’s order,” Ignon said.
The Chapter 11 proceeding will probably have an impact on the labor agreements, however, because the process gives the facilities the ability to ask the Bankruptcy Court to impose modifications to contract agreements.
“The 1113 process will allow the centers to request court authority to implement first temporary and then permanent modifications to their 2004 collective bargaining agreements if the centers are unable to implement the modifications through good-faith collective bargaining with SEIU, District 1199,” the company said in a press release. “Although the bargaining agreements have expired, the centers are required to abide by their terms and conditions.”
The union representing the striking workers has charged that the company is using the bankruptcy filing to avoid its legal obligations to employees.
“Don’t be fooled,” said David Pickus, president of the New England Health Care Employees Union District 1199. “This bankruptcy filing is the latest in a long string of actions by HealthBridge aimed at avoiding their legal obligations to more than 600 hard-working nursing home caregivers across Connecticut and at chipping away at the quality of care for patients — a cynical evasion of responsibility to Connecticut working families and their communities.
“HealthBridge is currently under an injunction from a federal judge to reinstate striking workers until a final decision is reached in the National Labor Relations Board case against the company,” Pickus continued. “HealthBridge appealed for a stay of that injunction, which includes restoring benefits to workers from whom they were illegally stripped, all the way to the Supreme Court. Those appeals have all been denied.”
The company argues that the union is pushing for benefits that make it impossible to run a nursing home in today’s economy. HealthBridge spokesman Lisa Crutchfield also said that patient care is still a priority, despite the filing.
“The continued excellent care and safety of the centers’ residents remains paramount, and we wish to assure both the residents and their families that the five centers will continue to operate as normal under bankruptcy protection, with no interruption of services,” Crutchfield said. “It’s business as usual at the centers.”
The centers are in the process of negotiating debtor-in-possession financing and currently have sufficient cash to operate the facilities, including paying vendors for goods and services provided during the Chapter 11 process, without interruption.
Each of the five centers is a sub-acute and long-term nursing care facility for the elderly in Connecticut. The facilities are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center.
“The centers have a bright future if they can operate under labor agreements that reflect today’s financial realities,” Crutchfield said, “but the fact is the centers will not survive unless we have relief from the crushing burden of unsustainable labor costs, especially the spiraling costs of pension and health care obligations.”
Debate over a new contract, which workers say would force them to pay health care costs they hadn’t paid before and lose other benefits, led to a lockout and then a strike at the Milford facility more than a year ago.
“There is no getting around the fact that SEIU, District 1199, labor agreements are the leading reason for nursing home closures in Connecticut,” Crutchfield said. “That’s bad for patients, employees, physicians, and the communities they serve. In our case, the union’s collective bargaining agreements hobble the centers with labor costs that are well above state averages and which are simply unsustainable.”
The union counters those arguments, saying the company has been paying high management costs at HealthBridge rather than properly compensating nursing home staff.
“The company reported losses at non-union facilities in 2011 and 2012, at the same time that they were paying out high management costs to their related management company, HealthBridge Management,” the union said. “Those fees have nothing to do with compensation for union workers. The fact is that this is a company that would rather squander resources on exorbitant lawyer fees rather than treat its workers fairly and ensure patients have the high-quality care they deserve.”