$12 million dollar settlement will help thousands of families

(Kannapolis, NC) – In July, 2003, Pillowtex closed its doors and stopped producing the towels, bed linens, pillows and other home furnishings they had been making for 116 years. More than 6,000 people in 11 states lost their jobs, with little or no notice or compensation. Families were devastated by the setback, and the lack of retraining and good employment options means most are still struggling. With the settlement announced today, former Pillowtex workers will get some long overdue compensation to help them rebuild their lives and communities.

“While this is a day for celebration, we must also remember that we owe more to these workers and their families than what they will receive through this settlement,” says Governor Mike Easley. “We still have more than 80,000 jobs in the textile and apparel industries here in North Carolina though we have lost more than 45,000 in the past 5 years. As elected officials, we must continue to fight the unfair federal trade policies that continue to put our state’s manufacturers, businesses and workers at a competitive disadvantage with low-cost producers around the world.”

The settlement will provide workers compensation for 24 ½ days of pay, at an average of $2000 per worker. The approximately 6000 workers live in North Carolina, South Carolina, Virginia, Florida, Alabama, Georgia, California, Pennsylvania, Mississippi, Texas and Illinois. The settlement will be filed with the Bankruptcy Court shortly and the Court is expected to review the settlement at a mid March hearing, and hopefully approve it shortly thereafter. After the Court’s approval, eligible workers will receive a mailing asking them to approve of the settlement. They will have 60 days to reply, and once 80% of eligible workers have approved the settlement payments will be disbursed. It is all parties’ hope and expectation that the funds will be distributed by June of this year.

“We are very proud of the settlement we have achieved on behalf of our members,” says Harris Raynor, Southern Regional Director of UNITE HERE. Mr. Raynor also served as the co-chair of all the unsecured creditors in the bankruptcy proceedings. “But in so many ways, it is too little too late. The bankruptcy process is stacked against workers. They suffer the most when a business closes, yet they stand behind the financial institutions that are secured creditors in priority. In a case like this their medical benefits and vacation pay – things they had already earned and counted on were placed in jeopardy unlike the financial institutions which got 100 cents on the dollar for what they were owed.”

UNITE HERE and others have been helping workers who have tried to find new jobs since Pillowtex closed. But the recovery has been difficult for many families, as lack of good job opportunities and the loss of seniority based benefits like vacation, retirement and affordable medical coverage as well as the pay levels associated with manufacturing means that most families are earning less than they made before losing their Pillowtex jobs.

“We are more than willing to work, but the opportunities just aren’t there. Most of the available jobs are in retail or other services, and they don’t provide the kinds of wages and benefits that can support a family,” says Gloria Craven, a long time Pillowtex employee.

“This settlement shows that UNITE HERE is committed to its members and workers in the South, but that commitment doesn’t end with the textile industry,” explains Mr. Raynor. “We are partnering with workers in airports, hotels, and laundries who are trying to improve their working conditions. It is our goal to make these service sector jobs the entrance to the middle class that manufacturing jobs have represented in the past. But that will only happen through collective bargaining. Workers in industries that can’t move offshore need affordable medical care, secure retirement, decent wages and job security. We have been able to provide that in unionized workplaces and will repeat that success here. Eventually the jobs that will stay in the area will be as good as the jobs we are losing.”

For more information, please contact Harris Raynor 770-306-8856 (office) or 678-296-6170 (cell).