Current Events — HabitableZone

Current Events

Jesse Jackson Filing Suit Against ENRON

Jesse Jackson is trying to get severance pay for Enron's laid-off workers:

Former Enron Employees, Rev. Jessie Jackson, AFL-CIO Take Court Action to Obtain Severance Pay for Desperate Laid Off Workers
From the AFL-CIO
February 14, 2002

Manhattan, NY-Former Enron employees, joined by the Reverend Jesse Jackson and attorneys for the AFL-CIO, filed a motion today with the United States Bankruptcy Court for the Southern District of New York to obtain severance pay for desperate laid off Enron employees. A hearing has been set for the motion for February 27, 2002.

"We are here because many laid off Enron employees simply cannot make ends meet," said Debra Johnson, a former Enron employee. "While a few executives got midnight wire transfers of more than a million dollars, thousands of us cannot afford healthcare and face eviction from our apartments."

The Enron personnel manual includes a severance formula for workers laid off due to business reorganization. Enron has paid $4,500 to some employees and nothing to several hundred others, and is not paying any more severance to its laid off employees. The motion filed by the former employees requests the court to order Enron to immediately pay each individual's severance up to $30,000-according to the personnel manual formula. Any employees owed more than $30,000 under the severance formula can pursue the remaining severance in court.

In a significant victory yesterday, Enron's new management responded to an appeal from former employees and acknowledged it had the authority to pay $4,500 to the more than 200 laid off employees who had not yet received any severance. Enron promised that those employees would receive $4,500, minus taxes, in the next ten days. Enron also vowed that the company would not oppose today's motion by former Enron employees.

"Yesterday, Enron took a step forward in recognizing what its former workers are going through and how crucial it is that the company fulfill its obligations. Now we are calling on J.P. Morgan, Chase, Citigroup and the other members of the Creditors Committee to understand the situation we are in and the implications of our situation for those continuing to work at Enron and for the company's ability to successfully reorganize" explained Louis Allen, another former Enron employee.

This decision followed a campaign by AFL-CIO and Rainbow/PUSH that resulted in thousands of union members faxing Enron to urge the company to pay severance to all its laid off employees.

On the eve of filing for bankruptcy, Enron made two sets of bonus payments totaling $105 million. The timing of those payments ensured they would not be reviewed by the bankruptcy court, while the timing of Enron's mass layoff the day after the bankruptcy ensured thousands of loyal employees' would not receive their promised severance money without bankruptcy court intervention.

The AFL-CIO and Rainbow PUSH will file a joint amicus brief with the court in support of the former employees' petition

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