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Star Tribune sues drivers' union after failure to reach pensions deal
The Star Tribune has sued its Teamsters drivers in an effort to void their contract.
Mpls Star Tribune
Monday, May 18, 2009

As it continues to try to extricate itself from bankruptcy, the Star Tribune on Sunday filed suit against Teamsters Local 638 in an attempt to cancel its fleet drivers' contract and stop funding their pension plan.

The company and the union have been negotiating for almost a year on a new collective bargaining agreement. The company said the two sides had reached agreement on almost $4 million in savings but stalled over management's effort to withdraw from the Teamsters' Central States pension plan.

In a redacted copy of its filing with the U.S. Bankruptcy Court in New York, the company said that withdrawing from the pension would save another $1 million per year. Under the plan's regulations, such a withdrawal would trigger a $20 million liability, which the company is asking the court to cancel.

The company said its lenders, who are owed about $400 million, would not agree to exchange their debt for equity if the company faces such pension liabilities. The company also has sought and obtained pension payment relief from its other unions by freezing or withdrawing from their plans. It has already reached labor agreements with its other major unions. Talks continue with several smaller unions.

An official of the union, which represents about 90 full-time Star Tribune drivers, said Sunday the union had no comment regarding the filing.

Publisher Chris Harte said in a statement the company no longer can afford what he termed the skyrocketing cost and the liabilities of the pension. "Over the past few months, we have attempted to reach agreement with the fleet," he said. "We have made substantial progress but are unable to agree on pension related issues. We are now seeking the help of the bankruptcy court to resolve these issues."

Heron Marquez Estrada • 612-673-4280