Sudden plant closure forces Chicago Teamsters local to sue Pepsi

Pepsi soft drinks in plastic bottles are on sale at a grocery store in New York on Nov. 15, 2023. | Ted Shaffrey/AP

CHICAGO —Sudden closure of the Pepsi bottling plant in Chicago’s Back of the Yards neighborhood on the South Side with no notice has left the workers in shock and forced their union, Teamsters Local 727, to sue the firm in U.S. District Court for violating the federal plant-closing law.

The October 28 closure of the plant, on West 51st Street and South Lowe Ave., left one supervisor in tears and local Secretary-Treasurer John Coll Jr. and other union officers upset at Pepsi’s deception.

That’s because during tense negotiations over a new contract, just six months before, Pepsi said not a word about the plant’s impending demise, or why the beverage giant planned to shut it down.

The Teamsters represent at least 100 of the workers and Electrical Workers Local 134 represents four more. The Pepsi plant employs around 200 workers. The plant closing law applies to plants with at least 75 workers.

During the contract bargaining, to give a shove to plant bosses, 95% of voting workers authorized a strike. Pay, and Pepsi refusal to provide better health care, were key sticking points in the talks.

The November 4 closure devastated the workers, some of whom had toiled at the bottling and distribution plant for decades, local media reported. The union leaders received a company e-mail the afternoon before the shutdown, with no chance to tell their members.

Veteran forklift operator Daryl Smith told Block Club Chicago he was driving home after his night shift when his supervisor called and asked him to return to work because of “a situation.”

“I get to the job and I asked the plant director, joking, ‘What’s going on? Are they about to close the plant down?’ She started crying. I was shocked. I saw grown men actually break down and cry.”

Learned of closing in last minute

Scrub machine operator Tony Gardner arrived at the plant to work the first shift and learned it was closing an hour after he clocked in. “It’s devastating. We have a family, we have a life. It’s rough. My immediate reaction was shock and thinking, ‘I’ll have to go home and tell my wife,’” he said.

“No notice, none of that, blindsided,” 21-year truck driver Eric Gadson told WLS-TV. “I’m the sole provider in my household. My wife has MS. My daughter’s about to go to college next year. I can’t put into words what I feel right now.”

State officials got no notice, either. But plant managers warned the Chicago police a week in advance, just in case, one media outlet reported. They didn’t tell the union until the afternoon before, by email.

“PepsiCo’s behavior is so egregious it is unimaginable,” Local 727 Secretary-Treasurer John Coli, Jr., told the parent union in a statement.

“To the press, they said the building was 60 years old and not worth repairing. In our meeting, they told us the company is ‘over capacity,’ whatever that means. When pressed why they didn’t raise a potential closure in negotiations that ended less than six months ago. management had no answer.

“Chicagoland is one of the biggest markets for PepsiCo Beverages. Not having a production facility just doesn’t make sense. It’s hard not to believe that this is retaliation for their Teamsters workers’ strength and solidarity in getting the contract that they deserved. We will continue to pursue any and all legal remedies to make sure our members are taken care of.”

The lawsuit asserts Pepsi violated the WARN (Worker Adjustment and Retraining Notification) Act, also called the plant-closing law. That law mandates 60 days advance notice to both workers and local elected officials of a plant closure or major layoffs.

The advance notice gives workers, if they’re unionized, time to bargain over effects of closing and gives local officials time to seek alternative ways to keep the affected plant open.

Pepsi broke the WARN Act this time by not including overtime, premium pay, holiday pay, and other benefits in the calculation of the payments mandated by the WARN Act, local Business Manager Caleen Carter-Patten added. The local also filed labor law-breaking—formally called unfair labor practices—charges with the National Labor Relations Board’s Chicago regional office.

The local said Pepsi’s executives bargained in bad faith, retaliated against the union, and failed to provide legally mandated information about the plant’s finances so the union could bargain effectively.

Pepsi countered the workers were notified, and that it’ll obey the law by paying them for the WARN Act’s mandated 60 days. But the plant itself has shut, Pepsi said.

In 1988, after the sudden closure of a Ling-Temco-Vought plant in Cleveland left hundreds of workers there without pay, pensions or health care, organized labor convinced the Democratic-run Congress to enact the WARN Act. Republican President Ronald Reagan let it become law without his signature or his veto, to keep its fate—and that of the workers–out of that year’s presidential election campaign.

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CONTRIBUTOR

Press Associates

Press Associates Inc. (PAI), is a union news service in Washington D.C. Mark Gruenberg is the editor.