By Zach Church, Staff writer
Eagle-Tribune – March 14, 2007

LAWRENCE - The benefits are far from ideal, but at least it's a job.  Just two weeks ago, a Malden Mills union voted 47-15 to reject a contract offer from their new employer, Chrysalis Capital Partners, essentially getting them fired in the process. 

Now facing the reality of unemployment, especially as many of the workers near retirement age, members of the Area Trades Council are coming back.  Most of them have taken Chrysalis' offer to apply for their old jobs. 

"It is the same deal that they voted down, but they more or less decided that they weren't ready to face unemployment and the uncertainty of that," said Richard Monks, an organizer for the union.  "Some people who swore they wouldn't go back are."

The members, mechanics at Malden Mills' Lawrence plant, rejected the contract offer because they felt it hit them too hard on health-insurance costs, wage freezes and the loss of paid sick time, among other gripes.  Their vote was in contrast to the one held by the 500 Malden Mills members of Local 311, which voted nearly 2-1 to accept the contract. 

Workers were guaranteed their jobs if they accepted the contract.  Since the Area Trades Council turned the deal down, they are scheduled to be fired when Malden Mills ceases to exist and becomes Polartec LLC.  That will likely happen today. 

But Malden Mills CEO Michael Spillane said any Area Trades Council member who applies will be offered his or her job back.  There has also been interest in the jobs from outside the company, Spillane said.

"If people want to work here, we're offering an attractive package," he said. 

Monks said a handful of Area Trades Council members who are not returning to work are concerned that the company will ditch their continuing health-coverage benefits, handled under the federal Consolidated Omnibus Budget Reconciliation Act, or COBRA. 

Malden Mills is planning to convert to Chapter 7 bankruptcy with the blessing of a federal judge.  If that happens, the company is liquidated and ceases to exist.  A company that doesn't exist can't pay COBRA health benefits, Spillane said. 

"There's no intention here to deny people COBRA," he said.  "It's just the facility has to exist to provide it."

Monks said that isn't so and pointed to U.S. Department of Labor regulations that state, in an asset sale like Malden's, the new owner is responsible to pay COBRA benefits to employees not rehired.  Those who do stay on with the new company would not be qualified for COBRA under the new health plan. "There are people who did not go back, and COBRA will be an issue for them," Monks said.  ###