Five Connecticut nursing homes in a heated labor dispute with striking union workers filed for bankruptcy Sunday, claiming the cost of union pensions and health benefits forced them to take this step.
HealthBridge, a New Jersey company, operates a number of nursing homes in Connecticut, including the five where members of the Service Employees International Union District 1199 are currently on strike.
The company previously filed a RICO suit against SEIU in October, claiming the union’s sabotage and political activities amounted to “a shake-down by a lawless enterprise.”
HealthBridge itself is not going bankrupt, just the individual entities that own the five nursing homes.
The company estimates the homes would lose $1.3 million a month if they continue to pay employees according to the existing collective bargaining agreement.
Costs at the five HealthBridge homes exceed those at other Connecticut nursing homes by nearly 50 percent, according to the company, and they exceed other unionized nursing homes by 20 percent.
According to the company, pension benefits for their Connecticut employees cost more than twice the average cost for other nursing-home employees here.
HealthBridge wants to stop contributing 8.5 percent of pay into the pension fund. Instead the company has proposed a one-time raise and the establishment of 401(k) plans.
The SEIU 1199 pension plan is underfunded according to one measure used by the Internal Revenue Service. The union favors measures that show the plan is adequately funded.
According to HealthBridge, SEIU 1199 has organized employees at about a quarter of Connecticut’s nursing homes, but the union represented nearly three quarters of nursing homes that have closed since 2007.
“There is no getting around the fact that SEIU, District 1199, labor agreements are the leading reason for nursing home closures in Connecticut. That’s bad for patients, employees, physicians and the communities they serve” said Lisa Crutchfield, senior vice president for labor relations at HealthBridge. “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.”
Correction: This article previously misidentified HealthBridge as the company losing money. The individual nursing homes are expected to run a combined deficit of $1.3 million a month.