How a union sank a mom and pop company overnight

This is a sad story out of Connecticut brought to us this week by the Washington Free Beacon. It involves J-Con Woodworking, located in Thomaston. Hilary and Mark Converse own the business and it’s been in operation there for more than three decades. Now, however, the formerly successful operation is shuttered and the owners are left with nothing. It happened in rapid fashion after eight union carpenters working for them decided to withdraw from the Carpenters Union. That triggered a demand for pension fund payments from the union which essentially bankrupted the family.

J-Con Woodworking in Thomaston, Conn., closed its doors after 34 years in operation in order to cover $633,667.80 in retirement and health benefits as part of a multiemployer pension system maintained by the Carpenters Union. The mass payout was triggered after the company’s eight union carpenters decided to withdraw from the union in a unanimous vote, according to reporter Marc Fitch.

“They wiped us out,” Hilary Converse, who owns the business with her husband Mark, said in an article posted at the Yankee Institute for Public Policy. “We basically have nothing left.”

The Converse family liquidated all of its assets and sold off its machinery to cover expenses resulting from a suit brought by the Carpenters Labor-Management Pension Fund. Multiemployer pension funds were developed for union laborers who fulfill numerous contracts for different companies over the course of their careers. Participating employers pool their resources together to cover the retirement costs and provide defined benefit plans to the workers in the same manner that an automotive or manufacturing worker does from his lifelong employer.

Just as we’ve seen with public employee unions in Washington and around the nation, the culprit at the bottom of all this is the system of lucrative pension plans which the unions negotiate for. They promise the moon in terms of retirement plans and pension payments unavailable to most private-sector workers today, and the cost of these systems swells over the years until the pension costs devour the host they are feeding on. In the case of the Converse family, they had no say in whether or not their eight carpenters stayed in their union and the unions refuses to disclose how they arrived at the whopping figure of well over a half million dollars as being their “share” of the bill for the pension plan.

All of this happens with the blessing of both the state and federal government. The unions have long been so fully in control of politics, primarily through the Democratic Party, that they’ve been able to write their own rules. This essentially translates into the ability to write your own meal ticket. Then, when poor management of the systems and a failure to anticipate long-term costs begins to bring them down, rather than curbing the pension benefits to allow the system to remain solvent, they make increasingly steep demands on the employers. Eventually, the system proves unsustainable and, in cases like that of J-Con Woodworking, the employer folds and nobody has any jobs.

There are union reforms underway today in DC and some of the states, but it’s going to take a massive amount of effort to make any headway. The unions are weaker than they were a few decades ago but they still have tremendous clout and will tie up any reform efforts in court for years.