Show-Me State Times

U.S. Senators Josh Hawley and Dick Durbin have introduced a bipartisan bill aimed at safeguarding employees of businesses that declare bankruptcy. The proposed legislation, known as the Protecting Employees and Retirees in Business Bankruptcies Act, seeks to prioritize employee claims over those of creditors during bankruptcy proceedings. This move is intended to help workers retain more of their wages, benefits, and retirement savings.

Current bankruptcy laws tend to favor creditors over employees, but this bill aims to change that dynamic by giving higher priority to employee claims and limiting executive compensation packages often referred to as "golden parachutes."

Senator Hawley emphasized the importance of prioritizing workers' claims in such situations: “When companies go bankrupt, workers—and not predatory creditors—should be taken care of first. This legislation would prioritize workers’ claims to wages, benefits, and retirement funds in bankruptcy proceedings, protecting compensation earned through years of hard work.”

Senator Durbin added that employees should not fear losing their earnings when their company files for bankruptcy: “Employees should not have to panic that they will lose their hard-earned wages, benefits, and retirement savings when their company files for bankruptcy. The Protecting Employees and Retirees in Business Bankruptcies Act would ensure that all employees, not just those at the top, receive the benefits they were promised.”

Teamsters General President Sean M. O’Brien expressed support for the bill: “America’s corporate bankruptcy laws put executives first and workers last. The system is broken and must be reversed,” he said. He praised the senators for their efforts: “The Teamsters Union applauds Sen. Durbin and Sen. Hawley for their bipartisan collaboration to protect working people.”

The legislation is co-sponsored by Senators Brian Schatz, Mazie Hirono, Tammy Duckworth, Sherrod Brown, Jeff Merkley, and Amy Klobuchar.

Senator Hawley has been actively involved in supporting workers' rights through various initiatives including co-sponsoring the Warehouse Worker Protection Act and advocating for postal service workers.