The Republic Windows and Doors factory occupation
Workers owed unpaid wages and benefits from Republic Windows and Doors have seized its physical plant as a forfeitable asset of the deadbeat company.
There is no problem with this under an honest application of libertarian property rights theory. You will notice several libertarians denouncing the occupation as a violation of the property rights of the company, though, while conveniently neglecting the issue of the property rights of the unpaid workers. They do this because there is an economic incentive to misapply libertarian theory in ways that suit ones donors in the non-profit world. The resulting attitudes then leach out into the broader movement, getting adopted for reasons of tribalism and unthinking social conformity even by those who have no such economic incentive.
That’s all that’s going on here.
UPDATE: My choice of words was influenced by a more recent story I neglected to include a link to…
Republic Sit-In: Leaders Vow To Never Give Up
Pertinent material from same…
Hundreds of employees have occupied the Republic Windows & Doors factory since last Friday when the company shut down. Their plight to win severance and vacation pay owed to them made them a national symbol of the economy.
And…
Share ThisThe laid-off workers continue to guard the assets inside their Goose Island plant in around the clock shifts to make sure the items are not removed. They say the remaining doors, windows, and machinery are the only collateral they have left in their fight to get what they feel they are owed.
I said this to Kinsella on the other side, but I think it’s worth repeating to ALLies as well: who is right and who is wrong WRT the Republic Windows and Doors occupation depends entirely on the contract in question. We as outsiders are not really in a position to judge who is in the wrong, having limited knowledge of the situation.
However, with that disclaimer, if the details are in line with how they have been presented, the workers appear to have a legitimate claim against the company, and cannot be faulted for taking that which belongs to them.
Very astute of you to note, Mike. Yes, I’m just offering my opinion as an outside (and indirect, via media proxy) observer to the dispute.
Brad,
“Workers owed unpaid wages and benefits from Republic Windows and Doors have seized its physical plant as a forfeitable asset of the deadbeat company.”
I see no evidence that this is true. The headline says the workers are protesting layoffs. A layoff does not violate your rights.
The story says, “Robles, a husband and father of three children, says Republic’s abrupt closing means no more health insurance for his family. He and other members of the unionized, largely Hispanic workforce have been told that they should not expect any severance or vacation pay they say they’ve already earned.”
Well, you are not entitled to a job, nor to the health insurance benefits that are a perq of employment. The workers *say* they have “earned” severance and vacation pay–not “wages” as you state above. If they were being stiffed wages for hours worked, I’d agree they have a claim (but even here, that does not give them the right to act like a loan shark or mob and just seize the property; hell, even if they are owed money, it could be that secured creditors or lienholders have a prior claim to the property). But in most companies there is no contractual right to vacation pay or severance–that can be terminated at the discretion of the company.
The article also reports: “Employees say they got the news only four days ago. Illinois law requires a 75-day notification if a company the size of Republic intends to close its doors. ‘And what that does is, it allows workers to go into the collective bargaining agreement, to renegotiate terms of the contract to make sure they get everything that’s entitled to them,’ DePaul Univ. Labor Educator Cynthia Martinez.”
As for the 75 day period allegedly required by law–well, that’s not libertarian, is it. So giving 4 days termination notice instead of 75 is not a violation of libertarian rights (any more than the workers’ quitting with no notice is a violation of the employer’s rights–to prohibit or penalize this would be rightly criticized as a type of slavery–it’s no different the other way). As for their right to use pro-union laws to force a renegotiation of the terms of a contract, well, these laws are not libertarian either.
So I see nothing in the story to show that these people have any kind of legitimate contractual claim against the employer, or an ownership claim on its property. Do you know something I don’t?
nskinsella-
How about this from the LA Times (http://www.latimes.com/news/nationworld/nation/la-na-worker-sit-in9-2008dec09,0,7863346.story)
>>
When they heard the news, some workers were furious. Others cried. Rangel panicked. His wife had been sick for weeks and had recently seen the family physician.
“I got a call from the doctors. The insurance company said they won’t pay because the company canceled all our policies and didn’t tell us,” Rangel said. “I have a mortgage. I have a child. What do we do if he gets sick?” <<
Breaking contracts isn’t libertarian either.
Yeah, it should come as no surprise that media statists wouldn’t draw a distinction between “what was owed to them contractually” vs. “what was owed to them according to the government.”
An earlier article I read said they were owed unpaid overtime and vacation pay. And, if their severance pay was contractually guaranteed, they would have a claim on it. Typically unions get everything in writing, but I have no idea in this case.
“(but even here, that does not give them the right to act like a loan shark or mob and just seize the property; hell, even if they are owed money, it could be that secured creditors or lienholders have a prior claim to the property).”
Well, this is purely speculative. But if they are in fact owed money by the company, contractually, I see no problem with them seizing the company’s assets due to a refusal to pay. If, as you hypothesize, the factory does not actually belong to the company, well then, yes, they would be in the wrong, but I see no reason to assume that is the case.
Refer to update added above.
Re: wages vs. contractually guaranteed pay, Kinsella is grasping at straws there.
Brad,
The new link says that the money was “owed to them” but doesn’t specify whether that was contractual or merely legislative (of course, legislative obligations are likely to be taken for granted by contract negotiators, but as consistent libertarians we can’t really fault anyone for that).
I assume that Kinsella was assuming that the severance and vacation pay were not contractually guaranteed, but there is really no reason for him to do so.
It’s a union shop. I’m confident that severance and vacation pay are going to be part of the explicit written contract. For that matter, Kinsella ought to know that’s likely to be the case. With time, you’ll find he just likes to make a fuss and makes use of his legal training to say things with a straight face that he’s way to intelligent to actually believe.
Brad: the original piece you posted only says they “say” they’ve “earned” it–people can say anything. It does not report as a fact that it was wages (which I grant you is owed). The other piece you post talks about money the employees “feel” they are owed.
Even if they are “owed” it, it’s not a crime to go bankrupt; these workers may not be first in line for what they are owed (and the property may be mortgaged or encumbered by secured creditors); and in any event you don’t just seize the factory.
I’ve only advised private companies so you may be right, that union shops stipulate vacation, severance etc. are as contractually owed as wages. I do not know–and from what I can tell, the articles do not make it clear. It’s just the allegations of the workers.
From rev lentil: “When they heard the news, some workers were furious. Others cried. Rangel panicked. His wife had been sick for weeks and had recently seen the family physician.
“I got a call from the doctors. The insurance company said they won’t pay because the company canceled all our policies and didn’t tell us,” Rangel said. “I have a mortgage. I have a child. What do we do if he gets sick?”
“Breaking contracts isn’t libertarian either.”
Well, it’s not clear that it was a breaching a contract. And even if it was, it does not mean they just inherit title to the property. And further, breach of contract is not unlibertarian at all, per Rothbard’s title transfer view of contract.
MikeD: “it should come as no surprise that media statists wouldn’t draw a distinction between “what was owed to them contractually” vs. “what was owed to them according to the government.”
An earlier article I read said they were owed unpaid overtime and vacation pay. And, if their severance pay was contractually guaranteed, they would have a claim on it. Typically unions get everything in writing, but I have no idea in this case.
“(but even here, that does not give them the right to act like a loan shark or mob and just seize the property; hell, even if they are owed money, it could be that secured creditors or lienholders have a prior claim to the property).”
Well, this is purely speculative. But if they are in fact owed money by the company, contractually, I see no problem with them seizing the company’s assets due to a refusal to pay.”
Well, how about that it’s mob rule; it’s unilateral; and it assumes that there are no outstaning liens on the equpiment etc. I guarantee you that if this company went bankrupt, then they were mortgaged to the yin-yang.
” If, as you hypothesize, the factory does not actually belong to the company, well then, yes, they would be in the wrong, but I see no reason to assume that is the case.”
You think this company went bankrupt all of a sudden? You don’ think they got all the credit they could? You don’t think creditors would have insisted on security?
Brad: “Re: wages vs. contractually guaranteed pay, Kinsella is grasing at straws there.”
Brad, I was not pettifogging on this. I was doubting whether it was established that there were contratually guaranteed pay (severance, vacation), since your attack on me seemed to rest on it.
MikeD: “The new link says that the money was “owed to them” but doesn’t specify whether that was contractual or merely legislative (of course, legislative obligations are likely to be taken for granted by contract negotiators, but as consistent libertarians we can’t really fault anyone for that).
I assume that Kinsella was assuming that the severance and vacation pay were not contractually guaranteed, but there is really no reason for him to do so.”
No: it’s the other way around. Spangler asserted that the company was basically stealing from them by refusing to pay them what it owed them. I was pointing out that the article he cited as proof does not establish this at all. I still think this is the case.
Brad Spangler:
“It’s a union shop. I’m confident that severance and vacation pay are going to be part of the explicit written contract. For that matter, Kinsella ought to know that’s likely to be the case. With time, you’ll find he just likes to make a fuss and makes use of his legal training to say things with a straight face that he’s way to intelligent to actually believe.”
This is unfair and uncharitable, Brad. You may have a point here–but the article does not establihs it. You may be “confident” of it, but it remains to be shown. In any event, default on a debt does not justify a sit-in, esp. if the property is encumbered by third parties. When someone is bankrupt, they are bankrupt. It happens to people all the time. They go bankrupt and can’t pay bills.
So while we agree that the State is a criminal gang, and therefore not fit to make law(correct ?), you contend that the state’s laws are inferior to libertarian theory when the state’s laws might prove a net benefit to workers in a dispute, but all of a sudden the state’s bankruptcy laws (not bankruptcy per se, but the state’s bankruptcy laws) trump libertarian property rights theory when the workers in a dispute have a valid property claim?
Get thee behind me, Satan.
Well, it’s not clear that it was a breaching a contract. And even if it was, it does not mean they just inherit title to the property. And further, breach of contract is not unlibertarian at all, per Rothbard’s title transfer view of contract.<<<<
So it’s ok for a company to cancel an employee’s health insurance without notification? Generally health insurance is written into a contract as a benefit. Thus canceling a health insurance plan would be akin to cutting a wage without notification. Is that libertarian as well? Please tell me how the vast majority of the population will be converted to libertarianism when this is what they have to look forward to. . .please do.
Also, the workers were not attempting to inherit title to the property. Their demands were quite modest.
Workers are creditors, too. If I have unpaid credit card debt, and the repo man comes along and takes my car, I can’t say “Wait! You can’t take that! I owe a lot of other people money too!” If someone else had a lien on the car that was established before I went into debt, then maybe, but if I put up my car as collateral on another loan when I knew I already owed money to the credit card company, it’s not as clear. I think a case could be made that the loan agreement was fraudulent, and the earlier debt takes precedence. In this case, that may or may not be the union contract.
In any case, if the repo man takes my car without realizing it was contractually owed to someone else, it was an honest mistake, and should be corrected, but this alone does not forgive my debt to the credit card company. Whether the union is acting “unilaterally” seems irrelevant to me.
Um, yeah. Italics were meant to end at some point. You get the idea. I was very passionate about the last 2/3rds of my post!
No problem on the italics. I edited it just now to add a slash mark to your closing tag. Well, then I edited it again to change the deprecated “i” to a semantically significant and web-accessibility standards compliant “em”. But, anyway…
You bastard.
Brad: “So while we agree that the State is a criminal gang, and therefore not fit to make law(correct ?),”
Yes.
“you contend that the state’s laws are inferior to libertarian theory when the state’s laws might prove a net benefit to workers in a dispute, but all of a sudden the state’s bankruptcy laws (not bankruptcy per se, but the state’s bankruptcy laws) trump libertarian property rights theory when the workers in a dispute have a valid property claim?”
I’m not talking about state bankruptcy law. I’m just talking about a practical inability to pay debts–insolvency.
rev lentil: “”Well, it’s not clear that it was a breaching a contract. And even if it was, it does not mean they just inherit title to the property. And further, breach of contract is not unlibertarian at all, per Rothbard’s title transfer view of contract.<<<<
“So it’s ok for a company to cancel an employee’s health insurance without notification? Generally health insurance is written into a contract as a benefit.”
Really?
“Thus canceling a health insurance plan would be akin to cutting a wage without notification.”
Waht’s wrong with cutting a wage?
While the standards and protocols of the arbitration market in a stateless society MAY develop a stateless law analogue to the bankruptcy provisions in statist law, it would be a secondary/derivative legal construct and not an aspect of core natural law doctrine. A owes both B and C. If A defaults on the debt to B, B is NOT somehow compelled by the non-aggression principle or property rights as conventionally understood to make sure to leave “enough and as good” for C to collect. That WOULD have a “whiff of Georgism about it”, wouldn’t it? I eagerly anticipate your pointing out my error on this point so as to further refine my thinking. Pending THAT, we can say that pending the development of such a derivative bankruptcy analogue by a mature system of stateless law, your argument about rival collections doesn’t apply in this case.
‘
“Waht’s wrong with cutting a wage?”
What’s wrong with changing the terms of a contract without notification?
“If A defaults on the debt to B, B is NOT somehow compelled by the non-aggression principle or property rights as conventionally understood to make sure to leave “enough and as good” for C to collect.”
Well, I’m not sure. He might be. But in any case, the onus is on C to prove this. It is not up to B to merely assume such.
“Waht’s wrong with cutting a wage?”
Without notification? It’s tacit to fraud.
Nothing is wrong with cutting a wage unless it is breaking a contract. Every year I see an increase in my health insurance. Every year my employer notifies me that, if I continue to enroll in the employee health plan, my payment will increase. I have personal complaints with this, but none that are philosophical. That is, they have every right to raise the amount that I pay.
And sure, the company can lower my wage. Afterall, in a libertarian society I would work for an agreed upon wage. However the agreement would be broken if my wage was lowered without a) the employer telling me and b) me agreeing to work for that wage.
My objection is that Republic cut the health insurance without telling the employers. You don’t see a problem with that? WOuld you see a problem with the wages being cut without notification (in breach of contract)?
You see, Stephan, this is the problem. You take a positive position based on libertarian moral theory, but you don’t even bother to read anything but the headline before applying that theory. It’s great to be a libertarian, but if you don’t apply that libertarianism to the actual facts of the caseand, instead, blithely stammer about things not being clear to you, you’re not doing libertarianism any favors.
Well, no, but there’s a lot of things about the economy that aren’t libertarian (as Carson and Long have been arguing repeatedly). So how do we resolve this? You say, get government courts involved - but is that really libertarian either?
Both sides are breaking “the law”. The libertarian thing to do is not to decide who’s breaking the law (although maybe that’s the lawyerly thing to do, which is why you guys are so popular). The libertarian thing to do is to decide whose actions are justified according to libertarian theory and whose are not.
What we’re seeing is that libertarian theory and application is contested territory. Keep advancing rebuttals about how our arguments “sound” and make you “feel” and it won’t be contested for very long.
Yes, because the context of corporate and financial law have nothing to do with whether capitalists enter into contracts they don’t really intend to keep.
I don’t really have a problem with breaking contracts, Stephan - happens all the time. We’ll see who wins in a world where contracts are consistently broken: corporations, who are nothing but contracts, and human beings, who exist in the physical world. I’d love to have a demonstration of what element of the business world has more primacy than the other.
Brad: “While the standards and protocols of the arbitration market in a stateless society MAY develop a stateless law analogue to the bankruptcy provisions in statist law, it would be a secondary/derivative legal construct and not an aspect of core natural law doctrine. A owes both B and C. If A defaults on the debt to B, B is NOT somehow compelled by the non-aggression principle or property rights as conventionally understood to make sure to leave “enough and as good” for C to collect. That WOULD have a “whiff of Georgism about it”, wouldn’t it? I eagerly anticipate your pointing out my error on this point so as to further refine my thinking. Pending THAT, we can say that pending the development of such a derivative bankruptcy analogue by a mature system of stateless law, your argument about rival collections doesn’t apply in this case.”
If all creditors are unsecured, I presume any free society would have a mechanism for them to all fight over the corpus and take a pro-rata share. But sure, unless there is an established mechanism I supose it’s first-come first-serve. But the main thing is that the property is probably already mortgaged so that it’s not reall owend by the employer–but by some secured creditors. The union workers are very likely trespassing then against the third party’s property.
rev lentil:
“My objection is that Republic cut the health insurance without telling the employers. You don’t see a problem with that? WOuld you see a problem with the wages being cut without notification (in breach of contract)?”
I am not sure what you mean. Of course people aer “told” when their wages are cut. “Hey, gus, I was paying you $12/hour, but starting tomorrow, it’ll be $10/hour. Hard times.”
What’s the big deal?
jeremy:
“‘I see no evidence that this is true. The headline says the workers are protesting layoffs. A layoff does not violate your rights.’
“You see, Stephan, this is the problem. You take a positive position based on libertarian moral theory, but you don’t even bother to read anything but the headline before applying that theory.”
I did read beyond it, and in neither article is it made clear or establisehd that there is any contratual claim.
jeremy: “I don’t really have a problem with breaking contracts, Stephan - happens all the time. We’ll see who wins in a world where contracts are consistently broken: corporations, who are nothing but contracts, and human beings, who exist in the physical world. I’d love to have a demonstration of what element of the business world has more primacy than the other.”
You guys really have some weird loathing for business and commerce and “corporations” don’t you. What did it for you–the movie Wall Street?
It’s consistent opposition to the state, as opposed to selective opposition. It’s only weird because you haven’t followed the implications of libertarianism to their logical conclusion.
Don’t get me wrong: you’re entitled to your cultural preferences. In the end, this debate about the viability of corporations in a genuinely free society is about preferences and subjective predictions, not libertarianism per se. You just don’t have a libertarian case when you base your politics on statist institutions like the corporate charter rather than on opposition to privilege and the state.
Actually, Quasibill’s debate with you over limited liability and the corporate identity did a lot to move me in this direction. I sincerely wish you would advance actual arguments in favor of your position rather than simply calling things “leftoid” and remarking about how left libertarian arguments “sound” to you.
Jeremy,
“It’s consistent opposition to the state, as opposed to selective opposition. It’s only weird because you haven’t followed the implications of libertarianism to their logical conclusion.”
I am opposed ot the state. I am opposed to state subsidies. I am not in favor of the state handing out incorporation charters. I’d be fine with the state staying out of it.
My main disagreement is in the characterization of the corporation as inherently illegtimate.
“Don’t get me wrong: you’re entitled to your cultural preferences. In the end, this debate about the viability of corporations in a genuinely free society is about preferences and subjective predictions, not libertarianism per se. You just don’t have a libertarian case when you base your politics on statist institutions like the corporate charter rather than on opposition to privilege and the state.”
I am not in favor of the “corporate charter”; I just think arguments against “the corporation” based on the idea of limited liability are confused and wrongheaded.
re: “…I just think arguments against “the corporation” based on the idea of limited liability are confused and wrongheaded.”
Only because you insist on conflating contractually limited liability (which left-Rothbardians don’t oppose) with limited tort liability granted by the state incorporation charters you claim to oppose.
regarding: “But the main thing is that the property is probably already mortgaged so that it’s not reall owend by the employer–but by some secured creditors.”
Then let this hypothetical creditor materialize and press their alleged claim so it can be compared to that of the workers. The union showed up for multi-lateral talks that included the company’s principal banker. It was the company management that didn’t show up.
Meanwhile, the workers continue to guard the collateral — because the company management have reportedly already started a different window company under a different name, bought a plant in a new town, hired temps there and were carting off equipment to the new plant from the old before the closing of the old one was even announced. Fat lot of good that equipment would do your hypothetical claimants if it had already been swiped by the management team charged with a fiduciary duty to manage it as operating capital.
BTW, the union has also been working with Chase Capital, which had a 40% owership share in Republic, to sort things out.
Bank Says It Will Consider Loan to Pay Workers in Factory Sit-In
http://www.nytimes.com/2008/12/10/us/10factory.html?ref=us
Republic Windows owner linked to Iowa plant purchase
http://www.chitowndailynews.org/Chicago_news/Republic_Windows_owner_linked_to_Iowa_plant_purchase,19712
Brad Spangler: “re: “…I just think arguments against “the corporation” based on the idea of limited liability are confused and wrongheaded.”
“Only because you insist on conflating contractually limited liability (which left-Rothbardians don’t oppose) with limited tort liability granted by the state incorporation charters you claim to oppose.”
I am not conflating them. It’s the other way around: when you guys oppose corporations based on their limited liability features, your argumetns woudl apply equally to a free market version of it. That’s why they are flawed.
“regarding: “But the main thing is that the property is probably already mortgaged so that it’s not reall owend by the employer–but by some secured creditors.”
“Then let this hypothetical creditor materialize and press their alleged claim so it can be compared to that of the workers. The union showed up for multi-lateral talks that included the company’s principal banker. It was the company management that didn’t show up.”
Uh, okay. Look, here is the bottom line. 1. The workers were squatting on property they didn’t own. 2. There is not even any proof they have a contractual claim. If they do, they shoudl be paid–out of any unencumbered assets. 3. The property is probably owned by another creditor.
“Meanwhile, the workers continue to guard the collateral ”
Better than breaking windowz, I guess.
Brad Spangler: “re: “…I just think arguments against “the corporation” based on the idea of limited liability are confused and wrongheaded.”
“Only because you insist on conflating contractually limited liability (which left-Rothbardians don’t oppose) with limited tort liability granted by the state incorporation charters you claim to oppose.”
I am not conflating them. It’s the other way around: when you guys oppose corporations based on their limited liability features, your argumetns woudl apply equally to a free market version of it. That’s why they are flawed.
“regarding: “But the main thing is that the property is probably already mortgaged so that it’s not reall owend by the employer–but by some secured creditors.”
“Then let this hypothetical creditor materialize and press their alleged claim so it can be compared to that of the workers. The union showed up for multi-lateral talks that included the company’s principal banker. It was the company management that didn’t show up.”
Uh, okay. Look, here is the bottom line. 1. The workers were squatting on property they didn’t own. 2. There is not even any proof they have a contractual claim. If they do, they shoudl be paid–out of any unencumbered assets. 3. The property is probably owned by another creditor.
“Meanwhile, the workers continue to guard the collateral ”
Better than breaking windowz, I guess.
rev lentil:
“My objection is that Republic cut the health insurance without telling the employers. You don’t see a problem with that? WOuld you see a problem with the wages being cut without notification (in breach of contract)?”
I am not sure what you mean. Of course people aer “told” when their wages are cut. “Hey, gus, I was paying you $12/hour, but starting tomorrow, it’ll be $10/hour. Hard times.”
What’s the big deal?<<<
nskinsella: Do you ignore always ignore elements of a discussion you don’t like? I specifically brought up that Republic’s employees health insurance was canceled without notification. Is this ok? Would you support this in your ideal society?
This just in. I looks like Bank of America has agreed to extend credit so that Republic can pay off it’s debts, and the workers are getting their severance and vacation pay. Nothing’s finalized yet, but it looks like the workers are going to reopen the factory. (http://www.commondreams.org/headline/2008/12/10-2)
rev lentil: “nskinsella: Do you ignore always ignore elements of a discussion you don’t like? I specifically brought up that Republic’s employees health insurance was canceled without notification. Is this ok? Would you support this in your ideal society?”
I am not sure what it means to do this. You ahve to specify more.
I just want to point out another blind spot that folks like kinsella have: security interests. Could they arise in a free market, without a state enforced centralized title recording agency? Possibly. But I haven’t seen anyone make a decent argument to that effect. And, the burden is on them, given the clearly statist nature of the current system, to establish how a contract between A and B can affect the rights of C to collect on his claims against B.
It won’t take my post so I put it here for now. http://www.stephankinsella.com/archive/2008_12_01_archive.php#468656573962617613#468656573962617613