Posted on 12/27/2009 1:37:18 PM PST by Last Dakotan
Banta Tile & Marble closed this week after the bricklayers union won a $2.9 million judgment against it. The small Loop Road firm laid off its 25 workers Tuesday and filed for bankruptcy liquidation Wednesday.
"It's obviously devastating to all of our employees and their families, and to our customers," said Banta president Ken Morris.
Banta installed luxurious tile and stone surfaces at thousands of homes and companies across the region during its 80 years in operation. But it was forced to close after U.S. District Judge John Jones III in Harrisburg agreed with earlier rulings in a case that started in July 2007. The judge ruled Dec. 15 that Banta owes $2.9 million in interest, damages and back contributions to the union's pension and health-and-welfare funds.
Jones signed a writ of execution the same day, entitling the union to that sum, which was far more than what Banta had in the bank. Bankruptcy was the result.
"When they filed that writ of execution, at that point we were instantly done," said Morris. "Eighty years of serving the Lancaster community with the finest craftsmanship and service, and it's done, just like that."
According to Morris, the legal issue dates to the 1990s when Banta did a job in which it paid union wages and benefits. The job, installing tile at Philadelphia Electric Co. headquarters, had a contract with an "evergreen" clause. That meant those union wages and benefits would apply to future jobs in the Philadelphia area. Later, Banta had another union-scale job with a contract containing a "traveling contractors" clause. That meant the contract's requirements would apply to future jobs in other areas.
Morris said Banta cut ties to the union in 2006, severing its obligations to pay into the funds — or so it thought. But Local 5 of the Bricklayers & Allied Craftworkers challenged that notion, taking Banta to arbitration, then to federal court. Harrisburg-based Local 5 argued those clauses meant Banta still was obligated to contribute to the union funds based on the number of hours its employees worked.
Banta was unable to negotiate a settlement with Local 5, said Morris, because such a deal would have required the firm to resume paying union wages and benefits. "That wasn't a viable business decision. With that cost structure, we wouldn't have been able to compete," he said. Local 5's attorney, Chuck Johnston of Camp Hill, could not be reached for comment late Wednesday.
Banta was founded in 1929 by George Banta as Craftsman Art-Tile & Marble Co. Focused on residential work for its first three decades, the firm expanded into commercial and industrial markets in the 1960s. The firm sold and installed countertops, vanities, tub and whirlpool decks, floors, walls, showers, tabletops and islands, fireplace surrounds and hearths, and sinks.
Morris, of Landisville, became president and an owner in 2003. He had spent the prior 15 years there, rising to vice president of operations. The Ohio State University graduate took over a firm that had 50 employees and annual sales of about $5 million, according to newspaper files.
But with the recession slashing its business, Banta's work force had been cut in half. Annual sales recently were in the range of $2.5 million to $3 million, said Morris.
They signed a contract that included an "evergreen clause" that bound them to hire/pay union scale and benefits for all future jobs in that particular area. The judge ruled on that clause.
The contract job was in Philadelphia. Their home base was Lancaster. Would that not be a "different area"? Certainly, a different local (if there even is one in Lancaster).
I guess we need to know whether that $2.9 million was due the Philly contract workers (which I wouldn't understand) or their Lancaster non-union employees (which I wouldn't understand, either).
If the latter, I wonder how they feel about losing their jobs over the dispute...
From the story, "Later, Banta had another union-scale job with a contract containing a "traveling contractors" clause. That meant the contract's requirements would apply to future jobs in other areas."
Sounds to me like Banta signed a couple of stupid contracts, to which the union held them. The union was no help to the Banta employees, of course ... but the judge had to rule on the contracts, not the effects on Banta's employees -- not to mention the union laborers who will no longer get work from Banta.
The leadership of this union is clearly more interested in maintaining their piece of the pie, than they are in keeping their folks employed.... the union members should (but most likely won't) figure out that the union isn't actually helping them with lawsuits like this one.
Evil unions - destroying companies whenever they can. Or chasing great jobs to different states or countries. But they usually vote for Democrats, so they are mental midgets.
My question for the unions: if you do not like the way a company is run, start your own and run it the way you want. Then you can compete with those big, evil, greedy corporations that provides millions of jobs.
“...Banta signed a couple of stupid contracts, to which the union held them...”
It is important to have some legal contract expertise OR have a lawyer review all contracts before signing.
True, but clearly the union chose destroying the jobs of 25 people over setting a precedent of firms wiggling out of a contract.
“So the judge should have ignored the law and ruled to keep the jobs? How very Democratic of you. Judges should call balls and strikes regardless of the consequences.”
You may have a point, judging from other comments too. If so, sorry. But I don’t mind jumping to conclusions, as that is what the left does, and unless we start to play at their level, we’ll continue to be defeated.
Two questions:
1. Gotcha. But why is a contract with a "travelling clause" even legal? It evidently creates a union shop where none existed -- without benefit of a vote. Can an employer sign away the rights of his employees?
2. On whose behalf did Banta actually owe the $2.9 million in bennies? I can't imagine it's the contract labor from the nineties in Philly -- it has to be the company's regular staff. Doesn't it? Which brings us back to #1...
I think the "employees" were contractors hired to install Banta's tiles, and the contracts in question most likely covered the terms under which those guys were hired. If I read the article correctly, Banta later decided unilaterally to abrogate those terms, which led to the lawsuit.
And the $2.9 million would have been owed to the contractors ... and thereby also to the union.
I don't like the outcome here, but I think the judge probably ruled properly, based on contract law.
The comments following the original article are telling. I haven’t heard the term “scabs” in years.
I belonged to unions in the distant past. They are useless, and only benefited ‘the suits’, our supposed reps who looked out for our rights. Yeah, sure.
It isn’t the rank and file who are destroying businesses. They just want a paycheck, to feed their families and pay the bills. Destroying a business isn’t on THEIR agenda; it is the agenda of communists worldwide.
Businessman must be smarter and more aware than any union. Check out those contracts closely.
Makes me damn glad I don't run a business in the Northeast. That area is going to stay in recession a long while...
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