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Immigrant Refresco Workers Bring Concerns to PAI Partners Investors, Demand Their Private Equity-Owned Employer Halt Anti-Union Campaign as IPO looms

November 16, 2021

Workers from the Refresco bottling plant in Wharton, NJ, have testified to four public pension boards about the funds’ investments in a union-busting company owned by private equity firm PAI Partners. 

In June of this year, a majority of the 250 workers at the Refresco bottling plant in New Jersey voted to join the United Electrical, Radio, and Machine Workers of America union, also known as the UE. The mostly Latin American immigrant workforce started organizing with the union a year and a half ago to counter abusive treatment by supervisors, low wages, minimal benefits, unsafe working conditions, constant schedule changes, and an unforgiving attendance system that penalized workers for getting sick

Refresco hired a notorious union busting law firm which has a long history of trying to prevent workers from organizing. Workers were not intimidated by Refresco’s aggressive anti-union campaign, and a majority of the workers voted to unionize. Refresco, however, is refusing to recognize the union and contested the results of the election. 

Refresco workers have been reaching out directly to investors in Refresco’s parent company, beginning with the Teacher Retirement System of Texas (TRS) in September, and the Pennsylvania Public School Employees Retirement System (PSERS) in early October. The workers also addressed the board meeting of the Los Angeles County Employees Retirement Association (LACERA) on October 13 and submitted written testimony to the Washington State Investment Board ahead of its October 18 board meeting.

These are just some of the pension funds that invest in PAI Partners, meaning that the public-sector workers who are participants in those pension funds have invested in Refresco’s anti-union campaign.

At the Texas TRS board meeting on September 17, 2021, Anthony Sanchez, a machine operator at Refresco’s Wharton, NJ plant for 15 years, told the members of the pension board, “I would like to talk to you as investors about the conditions that we are working under there.  We are working in unsafe conditions, with low salaries. The health insurance is bad, with very high deductibles, and high co-pays. Refresco is refusing to sit down with us and negotiate a fair contract.”  

Anthony Sanchez also spoke at a recent forum held by the Private Equity Stakeholder Project on “Workers Challenging Private Equity to Create Good Jobs.”

Another Refresco Wharton employee, Machine Operator IV Diana Acevedo, told the trustees, “Refresco does not care about our well-being. They made us continue working during the pandemic with a lack of appropriate protection and sanitary supplies.  There is a lot of favoritism in the plant.  They change the schedules from morning to night at the last minute.  They force us to work while we are ill and have a fever and are clearly sick. We want what is in the best interest of the workers.  We want to be part of the union.”

In early October, the NJ bottling plant workers spoke at the board meeting of the Pennsylvania Public School Employees Retirement System about that pension fund’s investment in the union-busting Refresco.

“My company Refresco is owned by PAI Partners company, which this pension fund is invested in,” said Refresco worker Nelva Castellanos. “You should know that your company, my employer, is fighting the union that the workers voted for.”

Castellanos also described inadequate insurance and poor treatment by supervisors. “Every week I pay $150 for insurance for my husband and me; I can’t afford to put my kids on insurance because it’s no good and it’s too expensive, so my son and daughter are on NJ CHIP insurance.

“We are treated like animals. Our new supervisor doesn’t speak Spanish — and I hear supervisors now calling black people the N-word.”

Anthony Sanchez told board members, “I am able to join you today because I am currently out of work with an injury that was made a lot worse by Refresco. The company wouldn’t let me off work for medical care, so I had to keep working until I had enough Family Medical Leave Act time accumulated to take time off without losing my job. This took months, and the months I worked with an injury made everything so much worse and I had to get a more serious surgery.

It’s been almost four months since we had our union election, where we voted to form a union. Refresco ran an aggressive anti-union campaign to intimidate and try to silence us, and now is refusing to negotiate with our union.

Any investors of Refresco should send observers to focus on the management there. Right now the management is a mess.”

Refresco workers also delivered a letter from the executive board of UE Local 613, which represents teachers and other professionals who work at the Western Pennsylvania School for Blind Children, and whose members are PSERS participants. The letter states that “We do not want our retirement savings funding a fight against other workers,” and asks PSERS to discuss their concerns with PAI Partners and tell them to negotiate a union contract with the Refresco workers.

Refresco carried out an intense anti-union campaign prior to the National Labor Relations Board certification election on June 24 and 25, 2021, when a majority of the 250 workers at the plant voted to join the United Electrical, Radio and Machine Workers of America (UE). Since the election, Refresco has filed a series of legal appeals to stall bargaining.

PAI has not responded to questions about how it plans to address its mistreatment of Refresco workers.

This is not the first time PAI Partners has found itself embroiled in a labor dispute involving one of its portfolio companies. In 2019, another PAI Partners company, airport concession company Areas, was involved in a labor dispute with hospitality union UNITE HERE. Areas had taken over concessions at several airports and drew criticism from UNITE HERE for not rehiring long-time employees who had been laid off by the previous operator. Another labor dispute between Areas and UNITE HERE in 2020 led two board members of the Los Angeles County Employees Retirement Association (LACERA) to say that LACERA should not reinvest in PAI Partners until the labor dispute was resolved.

There have been recent news articles that PAI Partners is exploring its exit options of Refresco with Refresco to take advantage of current strong market valuations. PAI Partners purchased Refresco for about $3.9 billion in 2018, and Bloomberg News reported that the company could now be valued at about $6 billion if PAI Partners were to take Refresco public through an IPO or sell it.  This is all the more reason that PAI Partners should resolve its labor issues. 

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