Union sues over benefits for Esskay retirees

April 15, 1993|By Kim Clark | Kim Clark,Staff Writer

The union representing Esskay Inc. workers in Baltimore filed suit in U.S. District Court yesterday in an attempt to force the company to keep contributing to local retirees' health insurance fund.

Last week, Esskay announced it would close its East Baltimore plant by May 15 and stop contributing by May 31 to the fund that helps pay for the health benefits of about 380 local retirees.

Esskay officials said the cutoff of retiree benefits would save the company $1 million a year and cost each of the retirees, who now pay $30 a month for health insurance, an additional $127 a month.

Leslie Stellman, Esskay's attorney, said the decision to make the cuts was "painful" but was forced by the financial difficulties of its parent company, Smithfield Foods Inc.

In its suit, filed in Baltimore's federal court, the United Food and Commercial Workers Union Local 27 asked the court to order the company to take the dispute over the pensioners' health benefits to an arbitrator.

The union has argued that its contract with Esskay, which calls for health insurance payments for retirees, runs through February 1994. Consequently, said the union local president, Thomas Russow, the company has a "contractual and moral obligation" to pay for the benefits at least through February.

The contract calls for all disputes over terms to go to arbitration. But Mr. Stellman said Esskay has refused to arbitrate the health benefits dispute because the company believes that the contract lapses when the ham plant on East Baltimore Street closes and the last of the 50 unionized workers are laid off.

The union "is legally incorrect," Mr. Stellman said.

Joel Smith, an attorney for the union, said he does not expect a hearing on the matter before next month. But he said the union would fight to make sure the company makes the payments for pensioners until the dispute is resolved.

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