The “Protecting Employees and Retirees in Business Bankruptcies Act of 2024” outlines measures to improve financial recoveries and protections for employees and retirees during business bankruptcies. It includes enhancing wage priorities, protecting benefits, restricting executive compensation, and addressing collective bargaining and union claims to mitigate losses.

The section identifies that business bankruptcies have risen significantly and are affecting job security and retirement, while existing laws to protect workers in such situations are inadequate. It emphasizes the need for legal changes to better support employees and retirees, as management compensation plans often escape sufficient examination amid these bankruptcies.

The bill amends section 507(a) of title 11 of the United States Code to increase the priority cap for wages from $10,000 to $20,000 and specifies that severance pay is earned in full when an employee is laid off or terminated. It also changes the calculation for employee benefit plans, setting it at $20,000 per employee involved in such plans.

The proposed amendment to Title 11 of the United States Code allows individuals in defined contribution plans, like 401(k)s, to claim stock value losses if the stock was part of their plan and the company they work for has committed fraud or violated duties, causing the stock's value to drop. This protection is for employees who are not top executives or well-compensated insiders.

The text amends Section 503(b) of the United States Code to clarify that severance pay for employees of a bankrupt company, except for certain high-level executives and consultants, is considered fully earned when employees are laid off. It also ensures that contributions to employee benefit plans, due after a bankruptcy filing, are included as priorities in bankruptcy proceedings.

This section of the bill amends title 11 of the United States Code to ensure that a debtor's financial plan includes continuing the payment of retiree benefits and allows claims for changes to those benefits. Additionally, it requires plans to address financial returns or damages for the rejection of collective bargaining agreements, as negotiated between the debtor and authorized representatives.

The section amends the U.S. Bankruptcy Code to ensure that any back pay, civil penalty, or damages due to violations of Federal or State labor laws, including the WARN Act, are prioritized in the same way as wages and benefits in bankruptcy proceedings.

The section outlines rules for rejecting collective bargaining agreements in a bankruptcy case, stating that a debtor or trustee must negotiate in good faith with the labor organization and can only reject the agreement if certain conditions are met, such as proving it's necessary for financial reorganization. It also allows for temporary modifications during negotiations and provides some protections for workers, while ensuring the debtor can continue to operate and reorganize effectively.

The section outlines changes to the United States Code about how retiree benefits can be modified during a debtor's bankruptcy proceedings. It specifies the process for making modifications, the conditions under which a court can approve modifications, and emphasizes fair treatment of retirees while ensuring that changes help the debtor exit bankruptcy without unfair burdens on the retirees.

The section modifies the U.S. Bankruptcy Code to prioritize preserving employee jobs, maintaining employment terms, and matching pension and health benefits when selling or leasing a debtor's property. This means that if there are competing offers to buy or lease, the court must choose the one that best protects workers' interests.

The section amends the United States Code to allow a court to recognize claims by active or retired participants, or their labor organizations, in pension plans that have been terminated. It allows for claims related to shortfalls in defined benefit plans due to plan termination and sets guidelines for claims in defined contribution plans based on stock value changes.

The section amends existing law to require that if a debtor's employees have not been paid wages or other compensations like vacation or severance after filing for bankruptcy, these unpaid amounts are considered necessary costs for maintaining or selling assets. This means the trustee must collect these funds from the debtor to pay the employees or their benefit plans, even if any agreements suggest otherwise.

The proposed changes to Chapter 11 of the United States Code emphasize the importance of reorganizing businesses to maximize their value and maintain jobs. It requires that reorganization plans prioritize preserving business value and employment, with preference given to plans that best achieve these goals, especially those involving agreements with employee labor organizations.

A debtor filing a case under this chapter aims to reorganize its business to keep it running successfully by making the best use of its assets and protecting jobs that contribute to the economy.

The section amends the United States Code to state that there are certain situations where the standard 120-day or 180-day period for exclusive rights can be shortened. This includes cases where a motion is filed to reject a collective bargaining agreement if an alternative plan is likely to be accepted soon, or if a new plan from someone other than the debtor includes terms from a labor organization settlement and is also likely to be accepted soon.

The section amends existing law to specify that if a company withdraws from a multi-employer pension plan after starting a bankruptcy case, the company must pay an amount equal to the total pension benefits earned by their employees during the bankruptcy period up until the withdrawal.

The section modifies executive compensation rules for companies coming out of bankruptcy, ensuring that payments or benefits to top executives or highly paid employees are part of a program for all full-time employees and are not excessively higher than pay for non-management employees. Additionally, any compensation must be court-approved to be reasonable compared to similar roles in the industry and cannot be excessive given the company's financial situation.

The section amends U.S. bankruptcy law to add limitations on executive compensation enhancements for certain employees of a bankrupt company. It specifies that incentives, bonuses, and other compensation increases for top executives, managers, and consultants are subject to stringent conditions and court approval to ensure fair treatment for all employees.

In this section, it is stated that no financial plans or benefits for insiders, top executives, or certain other employees of a company will be approved if the company, within one year before filing for bankruptcy, has stopped or reduced severance pay for its non-management workers. Additionally, for specific transactions, the trustee must get court approval after notifying those involved and giving them a chance to be heard.

The section amends the United States Code to prohibit the assumption of deferred compensation arrangements and retiree benefit plans for high-level executives and highly compensated employees if certain employee benefit plans have been terminated or reduced.

The proposed amendment to the U.S. Bankruptcy Code would allow a court to require the return of part of executive compensation if a company reduces employee benefits or if a pension plan gets terminated before bankruptcy. If these conditions are met, the trustee or others may pursue reimbursement of any compensation given to key company executives shortly before bankruptcy to help pay the company's debts.

If a company's financial obligations are reduced due to changes in employee or retiree benefit plans, the court will determine how much these obligations have decreased. The company must then return a matching percentage of compensation paid to top executives or board members. If no one takes action to recover this money before a certain deadline, any interested party can seek court approval to do so. The company cannot give post-bankruptcy compensation to those executives or board members if it's meant to replace the money retrieved under this rule.

The bill proposes a change to allow a trustee to reclaim any transfer made within a year before a company files for bankruptcy if it benefits insiders, high-paid employees, or consultants related to the debtor. If the trustee or a committee fails to act, other interested parties can ask the court for permission to claim these transfers for the benefit of the estate.

Section 401 amends Section 501(a) of title 11 of the United States Code to explicitly include labor organizations in the definition of who can be considered a creditor.

The section modifies the United States bankruptcy law by adding an exception to the automatic stay rule. It allows grievance or arbitration proceedings related to a collective bargaining agreement to continue or start against someone who has filed for bankruptcy, and also permits the enforcement of an award or settlement from such proceedings.

The section states that in bankruptcy cases involving debtors under the Railway Labor Act, courts and trustees can't modify wages, working conditions, or retirement benefits defined by a collective bargaining agreement unless it's done following the specific rules of the Railway Labor Act.