Union Deal With Bankrupt Calif. City Thrown Out

Law360, New York (September 2, 2009, 3:10 PM EDT) -- A federal judge has ruled in favor of a motion to reject a collective bargaining agreement between the International Brotherhood of Electrical Workers union and the city of Vallejo, which is in Chapter 9 bankruptcy proceedings.

The city was able to prove that the labor contract was “burdensome” on its abilities to meet Chapter 9 bankruptcy requirements for solvency, Judge Michael McManus of the U.S. Bankruptcy Court for the Eastern District of California said in his Sept. 1 order.

“Unfortunately, in the months following the filing...
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