Advocates for Labor and Progressive Institutions

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Bankruptcy Court Rules in Union’s Favor, Denying Employer’s Attempt to Reject Expired Collective Bargaining Agreements

April 2012

The U.S. Bankruptcy Court for the Southern District of New York recently dismissed an effort by Hostess Brands, Inc., filed under Section 1113 of the Bankruptcy Code, to reject its collective bargaining agreements with several local unions affiliated with the Bakery Confectionery Tobacco Workers and Grain Millers International Union. 

The BCTGM, with the assistance of Bredhoff & Kaiser, successfully argued that the Bankruptcy Court does not have jurisdiction to authorize Hostess to reject the terms of agreements that remain in effect under the NLRA after the collective bargaining agreements have expired.  As a consequence of this ruling, Hostess must continue those terms and conditions while bargaining with the local unions over new contracts, and cannot use the bankruptcy proceeding to immunize itself from obligations created by the NLRA.