August 03, 2018
To curb leveraged buyouts, laid-off Toys “R” Us employees are asking Congress to pass private equity-related legislation that could include new worker protections, leverage limits, and profit clawbacks.
Besides broader industry legislation, the former employees and workers’ rights groups asked lawmakers to urge creditors and buyout firms to contribute to a hardship fund for the laid-off toy store workers.
Critics of the U.S. bankruptcy process say the system offers little to rank-and-file employees in contrast to rich payouts to the executives, lawyers and advisers in charge of dismantling a company.
Senators call for action: Sen. Kirsten Gillibrand (D-NY) said, “We need to fight for all workers who are being treated like the Toys ‘R’ Us employees, who are bearing the personal economic costs of corporate greed run amok.” Sen. Cory Booker (D-NJ) noted, “I deeply believe that some of these practices are immoral and we need to get a more conscious capitalism, a more moral economy back in the U.S.”
Why it matters: The group of workers met with potential presidential candidates which could escalate this issue next year and into 2020, especially if Democrats gain control of the House in November.