Maritime Trades ALF CIO
Close this search box.



The MTD-affiliated Bakery, Confectionary, Tobacco Workers, and Grain Millers International Union (BCTGM) is fighting a legal battle with 95-year old Bethlehem, PA candy manufacturer Just Born Confections, makers of the Easter treat, Peeps. The aftershocks of this court fight could ripple across America, affecting the pension plans of 10 million workers in 1,300 multi-employer pension plans.

Two years ago, Just Born blocked new workers from joining its pension plan, diverting them into a new 401(k) plan. Just Born also refused to pay a legally required $60 million penalty to its multi-employer pension fund for taking this action.

In response to Just Born’s actions, the union voted to strike on September 7, 2016. But the company answered with a job fair that hired 150 replacement workers. As the union workers saw their jobs replaced, they began trickling back to work. Just Born broke the strike with its tactics. So, BCTGM took the next step and went to court to stop Just Born’s change in retirement plans.

As an increasing number of candy makers have left the country, Just Born claims it needed to take these actions to reduce costs and invest more in infrastructure to remain competitive in the market. But according to Candy Industry Magazine, Just Born net sales climbed from $222 million in 2014 to $231 million in 2016.

Just Born’s union employees participate in the BCTGM and Industrial International Pension Fund, which was flush with cash several years ago. Hostess Brands had accounted for 24 percent of the contributions to that pension fund but ceased contributing in 2011, and then filed for bankruptcy in 2012. Federal courts allowed it to escape paying the pension fund’s $1 billion in obligations due to the bankruptcy protection. The pension fund went from being one of the strongest in the country to one of the most at risk. It is now in a category known as the “red zone,” which means if changes are not made, it will become insolvent and beneficiaries might get pennies on the dollar. Other multi-employer funds are in worse shape.

To stabilize struggling multi-employer pension funds, Congress in February created a new commission as part of a new budget law. Meanwhile, Just Born and other companies are obligated to pay higher premiums to cover the shortfall from those companies that dropped out when they could no longer contribute.

Last year, a federal judge ruled against the company, saying it could not divert new members from the pension to a 401(k) without paying the penalty fee, and Just Born is now appealing that decision.

Subscribe to our Newsletter

Fill out the form below the get the latest updates

This field is for validation purposes and should be left unchanged.

Share this post