Pacific Steel Casting owes approximately $1M in severance to former workers

Nicholas Chun/File

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After West Berkeley’s Pacific Steel Casting, or PSC, closed in September, 500 workers lost their jobs. As per their collective bargaining agreement, these workers are entitled to severance payments, but these payments have not yet been made.

According to attorneys representing both parties participating in negotiations, PSC is claiming it cannot afford to pay the estimated $1 million in severance, as first reported by Berkeleyside, and is reportedly attempting to negotiate the payments with the union representing the workers, CMTA-Glass, Molders, Pottery, Plastics and Allied Workers Local 164B.

“The collective bargaining agreement requires that severance payments be made to workers,” said Conchita Lozano-Batista, an attorney representing the union. As far as the union is concerned and the workers are concerned, they owe the money, and they’re going to pay it.”

Richard Hill, an attorney representing PSC, said it is not a question of what the company “wants” to do, but rather of its ability to make the payments.

Hill said the severance payments are a contractual obligation of the company and that the company is looking to fulfill all contractual obligations to the fullest possible extent. According to Hill, the company is attempting to determine the amount of money available to pay the employees as severance, but he estimates that it will be less than 50 percent of the estimated $1 million owed.

“There isn’t money there to pay it. It’s not as if the money is there and they’re making the decision to spend it on something else,” Hill said. “The money just isn’t there, and that’s pretty clear.”

Lozano-Batista, however, alleged that Speyside Equity — the private equity firm that purchased PSC in 2014 — put PSC in a “precarious financial situation.” She said that if PSC is unable to pay the workers, then Speyside Equity should, as it is the parent company of PSC.

According to Lozano-Batista, the union is also still awaiting documentation that PSC had allegedly promised. She added that the company has claimed imminent bankruptcy in the past.

In terms of the progress of the negotiations, Hill said he expects the company will tell the union what it is able to pay in severance in the next week or week and a half. Hill noted that if the union does not reach an agreement with the company, it has the ability to file a grievance under the collective bargaining agreement, but he also stated that if the money is not there, “it’s like trying to get blood out of a turnip.”

The union’s position in negotiations, according to Lozano-Batista, remains that the money is “owed, and it will be paid.” She reasserted her position that not paying the workers is “unconscionable,” citing alleged inflated salaries of corporate officers and dedication on the part of workers.

“It’s important that they pay these workers what the workers are owed,” Lozano-Batista said. “The company ran because workers gave their blood, sweat and tears.”

Contact Alex Teodorescu at [email protected] and follow him on Twitter at @AlexTeodorescu8.